Shutdown Averted: After Historic Deal, Battles Loom Over Debt Ceiling, 2012 Budget

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With a last-minute budget deal, Congress averted a federal government shutdown Friday night. But the epic clash between Democrats and Republicans was just the first of a series of fiscal fights to come in this new era of divided government.

The next battles? The national debt ceiling and then the 2012 budget.

“We’re gonna have a fight in a couple of months over the debt ceiling. We’re gonna have a fight over the 2012 budget,” Rep. Adam Kinzinger, R-Ill, told Fox News Saturday. “This is not basically the last fight here. This is the first opening salvo in a real attempt to bring back the size of government and start living within our means.”

The Treasury Department has told Congress it will hit its $14.3 trillion borrowing limit no later than mid-May and Republicans hope to use the issue to force President Obama to accept long-term deficit-reduction measures.

“The president’s asked us to raise the debt ceiling and Senate Republicans and House Republicans, and I hope many Democrats as well, are going to say, Mr. President, in order to raise the debt ceiling, we need to do something significant about the debt,” Senate Republican Leader Mitch McConnell said on the Senate floor Friday night.

The White House has warned that not lifting the debt ceiling could lead to a default on the national debt and harm the economy, which appears to be picking up steam. If there is a stalemate, the Treasury could avoid defaulting for several weeks by using a number of tricks but it would eventually run out of options.

Lifting the debt ceiling is never easy and in this political environment, where Tea Party activists are pressuring Republican leaders to slash federal spending, a rough fight is all but guaranteed.

The fight over the 2012 budget won’t be a picnic either. The budget deal that Republicans and Democrats negotiated Friday night is for 2011 and funds the government through the end of September with $38.5 billion in spending cuts.

But House Republicans intend to pass a 2012 budget next week that would cut $6.2 trillion in spending over the next decade calls for sweeping changes in the Medicare and Medicaid health programs.

Democrats have already called House Budget Committee Chairman Paul Ryan’s plan an attack on the elderly and the poor.

But in the Republican radio address, Ryan warned of a coming crisis.

“Unless we act soon, government spending on health and retirement programs will crowd out spending on everything else, including national security. It will literally take every cent of every federal tax dollar just to pay for these programs,” Ryan said Saturday.

House Speaker John Boehner has said that the fight over the 2011 budget is likely to repeat itself in the next coming months.

“It’s taken us some time to get acquainted with each other and to work our way through this, because understand that this process that we’re in is likely to be repeated a number of times this year,” Boehner said.

(Source: Fox News)


2 COMMENTS

  1. You think the Socialist Democrat Workers Party was upset this time? They will be squealing like the chazayrim they are before the 2012 budget is passed.

  2. Unlike the usual partisan squabbles between politicians with big egos, this one is over genuine differences in policy. The Democrats sincerely believes that only the massive deficit spending is preventing a major depression similar to America in the early 1930s (based on their misreading of Lord Keynes, I believe, but that’s a different issue). The Republicans believe that the large federal deficit, financed by what amount to printing money, will lead to hypeinflation and an economic collapse similar to Germany in the early 1920s (based on doing the math and realizing that the Federal government is spending twice what it is taking in as tax revenue).

    At least it isn’t fighting over something stupid as it was in 1995.