December looks
like it is going to be a tough month for both the President and Congress. Maybe
their lives will become a Frank Capra-like movie, where a hero or heroine
emerges, bringing peace and harmony to the chief executive and legislators, as
snow falls over the final credits. The trouble is that Washington is not that
kind of town. When the people who work there sing, “God rest ye, merry
gentlemen,” they are vocalising about undertakers. Goodwill is regarded by
working Washingtonians as a mere American charity, not a feeling of bonhomie.
The President has a major juggling act on his hands. If a
spending bill is not passed by Congress by midnight on 8th December,
the federal government will theoretically run out of money. Federal employees
will be laid off just before Christmas. That would not play well in Peoria or anywhere
else.
Usually, the political parties would agree another Continuing
Resolution to extend the date until after the Christmas Recess enjoyed by
legislators and I do not dismiss this as a possibility. However, the Senate
Democrats, as well as contrary Senate Republicans, have an opportunity to use
the situation to seek deals from a President who is currently unwilling to
agree what is wanted. The Donald tweeted earlier this week about a meeting with
Democrat leaders, Chuck Shumer and Nancy Pelosi:
“Meeting with “Chuck and Nancy” today
about keeping government open and working. Problem is they want illegal
immigrants flooding into our Country unchecked, are weak on Crime and want to
substantially RAISE Taxes. I don’t see a deal!”
Republicans
need at least eight Democrats in the Senate to meet the 60-vote threshold to
bring cloture (closure) to a filibuster and pass a bill, so serious compromises
by the President and the Congress majorities may well be the price to pay for a
spending bill. However, going back to Clinton’s incumbency, the ‘shutdown samba’
is a known process, with last minute deals being done. The card Mr Trump could
play is to recall Congress for a special session before Christmas. It’s fine if
you have a seat in Maryland; not so good if you are from the far west. The
President can tell the voters, “I’ve recalled Congress to do the business
required and demanded by the people they serve.”
The Democrats
have a lot of political leverage despite the fact they are in the minority. Their
Christmas wish list from the Republicans and the Administration is already long.
Here are some of the terms they are likely to demand:
·
First and foremost,
“clean” passage of the DREAM Act, permitting undocumented, illegal
immigrants the right to remain in USA if the latter comply with stated conditions.
Democrats are on record that they would agree to additional border security
enforcement but nothing approaching the current, stringent White House proposals
on the topic.
·
A health care deal
to stabilize the Affordable Care Act’s exchanges, funding key subsidies to
give the states more flexibility on Obamacare’s regulations. The proposal
already has overwhelming bipartisan support, but Speaker Ryan has taken a hard
line against it. Democrats may well use the spending deadline to force
Republicans to vote for the bill, thus maintaining Obamacare.
·
Extension of the
Children's Health Insurance Program, from which nine million children benefit, which
has expired. This program has widespread bipartisan support in the House but a
group of House Republicans want CHIP’s cost be offset by reducing funding for Medicare
and the Affordable Care Act.
Trump
is keenly aware that Congressional Republicans have not delivered a single
major legislative victory during his time in the White House. With Republicans
in control of both chambers as well as the White House, it will look weak and ineffectual
if they are unable to keep the federal government open at Christmas.
With
his right of veto, Mr Trump has the final say on the spending bill. He appears less
than concerned with the prospect of a government shutdown. Instead, he has
raised the stakes by throwing policy deadlines to Congress on immigration and
health care. If the federal government closes, who will be blamed? That’s hypothetical
and for another day.
What may well be the ultimate sticking point for all
parties is tax cuts and tax reform. In the good old days of Reagan and Bush W, a
big tax cut for the rich was packaged with a modest tax cut for the middle
class. President Trump and Congressional Republicans suggest they are following
precedent. Their proposals deliver an average tax cut of $700,000 to the nation’s
175,000 richest families and they say there are benefits for the middle
classes. However, concerned, expert observers say Trump’s plan does not cut
taxes for many middle-class families. It raises them. Unsurprisingly, recent
polls give the plan a 30% approval rating.
I do not propose to go into detail on the budget and tax cut
proposals. Undoubtedly they will change over time before agreement is reached.
It’s the politics that interests me. The 2018 mid-term elections are fast
approaching. How will voters respond if mammoth tax cuts are awarded to the
rich whilst benefits and services for the poor and middle classes are reduced
and eroded?
There are so many variables in this situation. It needs the
touch of FDR, the negotiating skills of LBJ, the charm of Reagan and the
political charisma of Clinton to get these deals done. It is an enormous test
of Trump and his self-vaunted negotiating skills, especially when he has
another problem with ‘Rocket Man’ and the inability of the Chinese to curb
their acolyte’s ambitions. The President may surprise all and be up to the job
but I would not bet much. By New Year, things may well be a lot clearer but the
beauty of politics means you can never be certain.
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