The release last week of new deficit and debt figures for the federal government confirmed what most analysts expected, but not what many Members of Congress anticipated.
The Congressional Budget Office projection of $1.5 trillion in deficit for the current fiscal year, FY11, and forecasts of $1 trillion for FY12 put the Republican House, especially, in a bind.
Simple arithmetic has already revealed to even the most ardent of deficit warriors that the $100 billion in cuts they want in the current fiscal year cannot occur. The fact that leadership has had to deliver this message means that Speaker John Boehner and House Budget Committee Chairman Paul Ryan have to offer a plan of truly large spending cuts in the near future in order to keep their caucus from fracture.
At stake, of course, is passage of the necessary increase in the federal debt ceiling. That ceiling is now $14.29 trillion, a number that surely will require a vote by spring. Without a concrete plan to save $100 billion this year, House leadership must concoct a combination of “process reforms” and spending cutbacks.
The House intends to take up the current fiscal year continuing resolution Feb. 14, two weeks ahead of the scheduled expiration of the CR, although what an early vote accomplishes is unclear. The Senate will hum and haw before it passes the CR and a conference between the competing visions of the House Republican conferees and the Senate Democratic conferees fundamentally conflict.
Rumblings of a government shutdown over the CR, or over an increase in the debt ceiling grow louder. Among budget analysts, a growing consensus anticipates no concrete deficit/debt plan during the next 2 years, in large part because the president has so far been unwilling to outline even the sketch of a multi-year approach.
Criticism of the president from the editorial and economics writers of the Washington Post, New York, Times, Financial Times, and The Economist falls on deaf ears. After all, the folks who read those publications comprise a tiny minority of voters–most of whom consider job creation much more imperative than deficit reduction.
Thus a classic confrontation develops–the two great four-letter words in Washington, D.C., “jobs” and “debt” battle it out. History shows conclusively that jobs almost always wins.
If that is the outcome of the battle this time, then congressional Republicans, and Tea Party grassroots activists’ anger will explode in a form not yet predictable.