Trump faces his first budgetary cliff

Story highlights

  • Congress knows budget battles to the brink all too well
  • Republicans wary of blame for another shutdown

Washington (CNN)Everyone knows that Washington was built on a swamp. But in recent years it's felt more like the capital is teetering on the edge of a cliff.

The political system seems constantly in danger of tipping over the edge and the next close encounter with disaster is fast approaching. After Friday, the government will close down unless Congress can agree to a deal on future funding -- or at least push off the climax by a week or two.
It's the first such showdown of the new Trump administration, but just the latest in a long string of fiscal cliffs, speed bumps, sequesters, government shutdown threats and eleventh hour brinkmanship that has come to define the way the American government in the 21st Century struggles to do business.
    Whether it's due to political polarization, dysfunction or administrative malpractice, it's almost impossible to get anything done, without the prospect of something so awful -- like the US government defaulting on its debts for the first time in history -- to prod politicians into action.
    And it's not normal.

    Governing by crisis

    Congress has often fumbled and ground to a halt. But there are few precedents for such a prolonged period of government by crisis.
    "Yes, Congress has become habitually dysfunctional. For it to be habitually dysfunctional is new," said Daniel Feller, a University of Tennessee professor who specializes in Jacksonian politics and the 19th Century.
    "The one case that you can look back to where Congress had been equally and even more dysfunctional is the 1850s and of course that is not encouraging because of what happened at the end of that," Feller said, referring to the Civil War period.
    Sometimes in modern Washington, even the threat of a terrible price to pay cannot shake the capital out of its inertia.
    Four years ago, a sinister-sounding process called sequestration came into effect, triggering automatic spending cuts that scythed social and defense spending beloved by Democrats and Republican lawmakers.
    The idea arose out of a previous showdown over lifting the federal debt ceiling. Its purpose was to store up such an appalling set of consequences that even feuding Washington politicians on a so-called supercommittee would agree to over $1 trillion in cuts to reduce the deficit.
    Some hope.
    The prospect of political pain also failed to defuse a bitter political standoff over a Republican attempt to defund Obamacare in 2013 when the government closed for 16 days in the first such shutdown for nearly 20 years.
    But then-President Barack Obama rejected the attempt to dent his proudest domestic achievement by linking it to government funding.
    "You don't get to extract a ransom for doing your job," he told GOP lawmakers during a White House press conference at the time.
    Budget dysfunction did not start in this decade, but the most celebrated example of congressional brinkmanship in recent years may have been the original fiscal cliff.
    The looming disaster was first identified by then-Federal Reserve Chair Ben Bernanke in February 2012 when he warned that "there's going to be a massive fiscal cliff of large spending cuts and tax increases" at the end of that year.
    The problem was the end of multiple tax cuts, pending spending cuts and an alternative minimum tax patch that threatened to hammer consumers and throw the markets and the economy into a tailspin.
    Bernanke expressed the somewhat naive hope that Congress could figure out ways to defuse the fiscal time bomb before the end of the year.
    Yet it took until the dying hours of 2012 -- after Obama broke off his vacation in Hawaii to come back to Washington and divisions tore deep into the Republican ranks -- for a deal to be reached that brought the economy back from the edge.

    What happens now

    Trump's first budget showdown is not as severe. But no one knows yet whether it will end with government workers being furloughed and museums shuttered and national parks putting up "closed" signs.
    It would be clumsy at best for the Trump administration to face a government shutdown -- with all the accusations of incompetence that it could bring on the day before the President hits the symbolic milestone of 100 days in office.
    But over the weekend, the administration appeared to throw a wrench in negotiations on the Hill, calling on lawmakers to include money for the proposed wall on the Mexican border that Trump made a centerpiece of his 2016 campaign.
    That's a non-starter for Democrats who find themselves in the unusual position of being able to thwart a Republican president on a major agenda item because Trump needs at least eight of them to vote with him in the Senate.
    For eight years, the boot was on the other foot, with Republican lawmakers seeking to wring concessions from a Democratic president, usually involving tax and spending cuts linked to government funding or deals to lift the debt ceiling.
    The thinking behind the White House gambit, delivered by Homeland Security Secretary John Kelly and others on the Sunday talk shows, seemed to reflect an administration keen to rack up progress towards a central campaign promise after a somewhat threadbare first 100 days in office.
    If that makes Democrats running for re-election in Trump country in 2018 vulnerable to accusations that they were soft on reinforcing the border, then all the better.
    Four days out, it seems that neither side in the current showdown is yet ready to go to the brink.
    Democrats have left open the possibility of more money for border security to avoid a standoff over the wall. The White House has not yet said the Trump would veto a bill that did not include border funding.
    One White House official signaled on Monday that the Trump won't insist on funding for the wall in a spending bill to keep the government running past Friday.
    "Politics is the art of compromise," the official said.

    The electoral calculus

    But it's also clear that both sides are taking part in the normal process of calculating the potential damage that a government shutdown would wreak and which side would pay the most heavy price.
    Democrats clearly believe that they have the advantage and can make Trump back down — putting off the wall fight for another day.
    "Instead of risking government shutdown by shoving this wall down Congress' and American peoples' throats, the president ought to just let us come to an agreement," the Senate's minority leader, Chuck Schumer of New York, said Monday.
    "We're happy to debate this wall in regular order down the road once he has a plan," Schumer said, referring to the President.
    Republican senators, mindful that the GOP has often been blamed for the government shutdown in 2013 -- and absorbed a serious political blow after then-Speaker Newt Gingrich's conservative call-to-arms shut down the government during the Clinton administration 20 years prior -- seem ready to get Friday's deadline behind them.
    "I'm not in the business of saying what's a good idea or a bad idea. I just don't want it to go down the road to yet another government shutdown. Those are always counterproductive," Republican Sen. Pat Roberts of Kansas said.

    Deal or no deal

    If no deal can be done by Friday, there's always an opening for another staple of the cliff-prone process: the stop-gap deal to put off a government funding showdown for another day.
    Congress could pass a short term funding deal, known as a continuing resolution (CR) in legislative speak, to keep the government open for a week or more and then carry on talking -- possibly in pursuit of another longer term patch that does little to tackle underlying budgetary issues.
    "I think a CR is always possible," Republican Sen. Richard Shelby of Alabama said, warning that shutting down the government would be "totally irresponsible" and asserting, "We can kick the can a week."
    That would be a familiar scenario. After all, there have been years of budget deals, debt ceiling showdowns and government shutdown dramas that all eventually got resolved -- but in a manner that did little to tackle underlying budgetary problems -- including long-term government debt, insufficient revenues and putting entitlement social programs on a more secure footing.
    There are many theories as to why Congress can't get big things done. The loss of earmarks that enabled party leaders to funnel cash to lawmakers in return for votes has made legislating tougher. Partisan acrimony is also to blame and the fact that many lawmakers in safe districts now fear a primary challenger more than a general election opponent has also helped to squelch compromise.
    Even if the White House, Democrats and Republicans do manage to defuse this week's standoff, it is simply an appetizer for much bigger fights to come.
    Treasury Secretary Steven Mnuchin has already warned that he is taking extraordinary budgetary measures after the government reached the limit of its borrowing authority.
    But the running room is expected to run out sometime this fall, requiring Congress to pass a bill raising the government's federal borrowing limit -- a process it did grudgingly several times during the Obama administration -- and without incident for many decades before that.
    If Congress does not act, the US government could default on its debt, tipping the domestic and even global economy into an unprecedented crisis.
    That is unlikely to happen, but, given the tenuous control of GOP leaders over the party on Capitol Hill, there are no guarantees.
    That means government by crisis may be here to stay.