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Power Play: Budget Battles Matter, Forget the Rest

“88 days”

-- Time remaining on a stopgap law funding the federal government.

So, about that immigration bill…

Whether it’s that or anything else sought from Congress by activists, lobbyists or anyone, it’s not happening anytime soon.

After two-and-a-half years of hellacious fiscal fighting in Washington, we are getting ready for the biggest, baddest battle of them all. A deeply divided federal government has rather remarkably avoided a shutdown, but that improbable streak looks very near its end.

The “sequestration” reductions to automatic increases in federal spending were once imagined by Obama Democrats as a sort of soft shutdown – a way to start grinding on conservatives members of Congress ahead of the real thing.

That didn’t work out since, aside from being bipartisan and conceived by the president’s top advisers, the relatively small reductions were too subjective. President Obama could hardly keep up his sequestration sermonizing about vital programs losing money and then host a lavish party for dignitaries or spend tens of millions of dollars on a goodwill tour of Africa.

(Allowing the White House to be closed to public tours stands as the one of the most striking political miscalculations of recent years. The president’s senior staff had that stumble around the same time as they tried to sit on the IRS targeting scandal., another massive miscalculation. The second-term substitutions have not been off to a rollicking start.)

The president was looking for a way to increase his advantage ahead of two looming deadlines.

First, the federal government is about out of borrowing authority. Eager to avoid another dangerous fiscal fight, House Republicans agreed at the start of the year to push the debt limit as high as necessary to allow the Treasury to keep borrowing until May. Some accounting gimmickry and a cash-dump from freshly flush government mortgage firms pushed that back by a few months. But at some point soon, likely next month, Treasury Secretary Jack Lew will announce that the executive branch has exhausted its debt authority.

Because of the incoherence of federal budgeting, borrowing and spending for the past six year, the debt ceiling is out of synch with spending. Democrats, most notably Reid and then-Senator Obama, were the first to use the stand-alone debt votes for political points – Obama famously calling such borrowing a “failure of leadership.” But Republicans have made the most of the debt votes since then.

Republicans, though, view these measures not as opportunities for cheap shots, like Reid and Obama, but as actual leverage in fiscal fights. This is because, as Obama has complained, they are actually sincere. Quite a few on the right dream of the chance to force Uncle Sam to balance his books by cutting up his charge cards.

After winning several spending cuts (or reductions to scheduled increases) by means of debt votes, though, Republican leaders are having trouble convincing rank-and-file members of the necessity of negotiations and avoiding the debt breach.

Having seen Obama stumble through his sequestration gambit, many congressional conservatives are feeling emboldened. If they won the messaging fight over sequestration, many think they can do the same if the government suddenly has to reduce its outlays by more than a third.

It was going to be easier, many thought, because borrowing and spending were finally getting back on the same track. After several punts, temporary lifts and stopgap spending plans, everything was tracking for the end of the federal fiscal year: Sept. 30. One more temporary debt limit lift and then everyone would be ready for the big budget summit in which “everything is on the table.”

But however the Off Broadway launch of shutdown theatrics went, the real thing is ready to debut. And because of an error by Senate Majority Leader Harry Reid, opening night is going to be even uglier.

Senate rules set a lower vote threshold for budget matters: the reconciliation process made notorious during final passage of the president’s 2010 health insurance law. The purpose of the rules is to make it easier to sort out differences between House and Senate budget blueprints.

For the Senate to reconcile something, then, it has to originate in the other chamber. Reid was supposed to take up the House-passed budget plan, but instead took up the Senate version for consideration under the reconciliation process. That whoopsie is easily fixed – if the Senate unanimously agrees to give Reid a do-over.

But Senate conservatives aren’t in a conciliatory mood with the gentleman from Nevada. Looking to maximize leverage in the larger fiscal fight, conservatives like Sens. Ted Cruz, Rand Paul and Mike Lee are refusing to let Reid recover. In exchange for letting Reid get back to 50 votes on the budget, they want to pull out the debt limit and retain a 60-vote threshold for that.

Conservatives worried about what happens with borrowing and spending once the budget gets into conference. Rather than the dollar-for-dollar deals that have ended debt limit standoffs since 2011, conservatives in Congress fear that with trillions of dollars and a decade of time with which to work, Republican conferees will take a liberal spending deal and kick it back to both parties for bipartisan bare-majority votes.

Conservatives want the debt limit to remain a separate bargaining point. And Cruz, Paul and Lee, thanks to Reid’s blunder, are helping House conservatives do so.  

But Obama is empowered, too. Not worried about short-term economic consequences as he was before, the president may now be willing to go nuclear. Rather than trading some cuts for another short-term borrowing patch, Obama may opt to sound some scary sirens.

“Dear Social Security beneficiary, as a result of Republican hatred for the needy and aged, your benefits will be interrupted…”

Obama didn’t have enough latitude inside sequestration and ended up looking foolish, but he and Lew have total control and broad latitude when it comes to a breached debt limit. Republicans can scream all they want about their alternate plans for sequencing obligations, but Team Obama can make this one really hurt.

The Democratic hope is that by late September, the public is so freaked out and fed up with Republicans blockading the debt limit hike that the House leadership becomes willing to do almost anything to avoid a double shutdown on October 1.

Without the confidence of their conference, though, whatever Speaker John Boehner and Majority Leader Eric Cantor say are good deals or necessary deals aren’t likely to be seen as such inside the Republican majority.  

Of course, Obama isn’t what he used to be, either. Scandals and a series of missteps have left him without the credibility he needs with voters to deliver maximum pressure on Republicans. Yes, his numbers are higher than theirs. But this is a dire time for a president to be undergoing a crisis of confidence.

His struggle with Republicans has been all about money all along. And while liberal Democrats have groused that he has not taken a firmer stance against the right, the president has kept the faith and confidence of the electorate. With that confidence waning for other reasons, plus the sequester stumbles, it’s not a great time for brinksmanship or nuclear strikes.

Washington is talking endlessly about immigration, farm subsidies and other elective or ancillary fights in Congress. Conservative pundits are urging Republicans on to all kinds of initiatives, symbolic legislation and new inquests. Liberal pundits are demanding all manner of action from the administration and Senate Democrats.

But don’t be fooled. The fiscal fights of the next 88 days will not only push everything else aside, but irrevocably change the dynamics of power in a divided Washington. Grab your helmets. The first barrage will be starting soon.

 

Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30amET  at  http:live.foxnews.com.

 

Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as digital politics editor based in Washington, D.C.  Additionally, he authors the daily "Fox News First” political news note and hosts “Power Play,” a feature video series, on FoxNews.com. Stirewalt makes frequent appearances on the network, including "The Kelly File," "Special Report with Bret Baier," and "Fox News Sunday with Chris Wallace.”  He also provides expert political analysis for Fox News coverage of state, congressional and presidential elections.