Five Signs Pointing to a Continuing Resolution Deal Being Struck

Posted on April 5, 2011. Filed under: Uncategorized |

A government shutdown is the Damocles sword dangling above Capitol Hill lawmakers as time to reach an agreement on a Continuing Resolution to keep the government running through the end of the fiscal year is quickly drawing to a close.

Congressional Democrats say the spending cuts being demanded by the Tea Party wing of the GOP is a bridge too far. For their part, Tea Party Republicans say they aren’t backing down or backing away from their $61 billion in spending cuts and dozens of bill riders aimed at gutting the EPA and defunding National Public Radio, Health Reform and Planned Parenthood.

The latest news coming out of Washington has to be disheartening for those looking for a last minute agreement on a Continuing Resolution before the April 8th deadline. Still, according to our sources on the Hill there are least five reasons to hope a government shutdown can and will be avoided:

Reason No. 5—Republican and Democratic lawmakers making the rounds of this Sunday’s morning news shows, including Senators Harry Reid (D-Nevada) and Lindsey Graham (R-South Carolina), predicted that Congress would strike a deal this week that would avert a federal shutdown on Friday. It’s in no one’s best interest, including taxpayers, to allow even a partial shutdown. Shutdowns cost money with no productive output.

Reason No. 4—the two sides have already agreed on the $33 billion amount of spending cuts; $10 billion in cuts have already been decided; and, according to aides to lawmakers on both sides, the appropriations committees in the House and Senate are working hard to cut $23 billion more from the FY 2011 budget. As Vice President Joe Biden said last week—“We’re all working off the same number now.”

Reason No. 3— the economy is showing signs of recovery, but it is a weak and slow moving recovery. A shutdown will decrease spending by public employees, hurt businesses with federal contracts, and increase consumer unease. The domestic economic applecart could be tipped over or further slowed by a shutdown.

Reason No. 2—the Tea Party rally, meant to put pressure on lawmakers to make even deeper spending cuts, only drew a few hundred demonstrators to Capitol Hill last Thursday. Similar Tea Party rallies in the past attracted thousands. Could the movement be losing steam? In addition, while Republicans are convinced that Democrats would be blamed for any shutdown, polls don’t confirm this view. Polls show voters would blame both parties and the President, so a shutdown has a high risk factor for 2012 elections for all involved, including Republicans.

And, the Number One Reason to hold out hope that there won’t be a government shutdown on Friday—Sen. Paul Ryan (R-Wisconsin).

On Tuesday, Ryan, the House budget committee chairman, unveiled details of the Republican 2012 budget plan that over the next 10 years would slash government spending by as much as $6.2 trillion in part by cutting spending on entitlement programs; specifically Medicare and Medicaid.

Speaker Boehner believes by revealing Ryan’s plan he will be able to convince reluctant Republicans, including the Tea Party, to accept the $33 billion budget compromise for 2011 by arguing that they will have the opportunity for even deeper spending cuts in the 2012 budget. Legislative efforts related to FY 2012 and the debt ceiling are where the bigger results rest and hence, more deficit reduction for fiscal conservatives. A federal shutdown makes those deals harder to achieve.

Likewise, this “you will have additional opportunities to take another bite of the apple” approach being employed by Boehner to his members, is what we at Turner GPA are advising to clients and potential clients. Although budget cutting fever on the Hill is running high, there are opportunities that can be mined to influence legislation and protect specific federal funding, but that window is closing fast.

Can a budget compromise be reached in time to avoid a shutdown? Or will lawmakers buy more time with a GOP proposed one-week CR? And if that is the case, will President Obama veto a stop gap CR as he has already indicated he would?

It is a soap opera, and at this point it’s anyone’s guess what will happen. The only thing that is sure is in the event that compromise can’t be reached and there’s a government shutdown, you can point the finger of blame in one direction—at the freshman House Republican lawmakers. As one of Turner’s top operatives on the Hill correctly notes: “Clearly, it’s the Tea Party tail that is wagging the Republican dog.”

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One Response to “Five Signs Pointing to a Continuing Resolution Deal Being Struck”

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Sir, I am curious about the widget you are using. Thank you sir forgive my english.

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