Bleak fiscal outlook follows fruitful Democrat era

The challenge for Democrats is to maintain a fragile detente as the Republicans take power in the House, writes SHAILAGH MURRAY…

The challenge for Democrats is to maintain a fragile detente as the Republicans take power in the House, writes SHAILAGH MURRAYin Washington

THE DEMOCRAT party’s wish list for the 112th congress looks nothing like the bold liberal agenda the party pushed over the past two years.

Democrat leaders say they could take up the cause of deficit reduction, urge a free-trade agreement with South Korea and advocate for an overhaul of US immigration laws.

All of these issues have something in common: they will require support from lawmakers in both parties to have any hope of passing. Each of the measures had stalled during the previous congress, as Democrats used their majorities in the House and Senate to advance healthcare reform, Wall Street accountability and other priorities over the objections of Republicans. They no longer have that luxury.

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Democrats presided over one of the most productive congressional sessions in decades, but the brisk pace and their strategy of rolling over Republicans instead of engaging them came at a heavy cost. Many voters thought Democrats had overreached and were governing by fiat, and they responded in November by giving Republicans control of the House and narrowing the Democrats’ hold on the Senate.

Now, Democrats will try a different approach – attempting to recreate the unexpected co-operation of December’s lame-duck session, in which the parties got beyond their rhetoric to pass a tax-cut Bill, extend unemployment benefits and ratify a nuclear arms treaty with Russia.

Lawmakers approved more bipartisan legislation last month than at any other time in the long stretch since President Barack Obama took office.

The challenge for Democrats will be to persuade Republicans to maintain that fragile detente even as the emboldened Republican party takes power in the House and begins to pursue its own agenda – one that includes repealing the healthcare law and cutting government programmes.

Democrats are already acutely aware of their diminished position. While House Republicans are spending this week changing procedural rules, reading the constitution on the House floor and scheduling their first major vote, a January 12th showdown on whether to repeal the healthcare legislation, House Democrats tried to generate interest in a news conference to announce two low-level leadership appointments.

One urgent concern for lawmakers in both parties is the country’s bleak fiscal outlook, stemming from heavy government spending and ballooning retirement costs. House Republican leaders said that immediately after the healthcare vote they will debate spending cuts, targeting specific programmes such as public television. But bigger battles loom this spring, when temporary funding for virtually all domestic spending will expire on March 4th and congress is forced to raise the debt ceiling, or else risk default by the treasury – a pivotal moment that could arrive later in spring.

In the past, the House has approved the debt ceiling as part of the budget resolution – a vote that typically draws unanimous Republican opposition. But as part of rules changes proposed by GOP House leaders, raising the limit would have to be approved in the House as a standalone Bill.

Tea party activists have singled out this moment as a make-or-break show of solidarity against further deficit spending.

Democrats and some Republicans, including leaders in both chambers, are so concerned the debt-ceiling vote could fail, at least in the House, that some lawmakers considered adding it to the tax Bill that passed during the lame-duck session.

But Democrats also consider the issue a key test of conservative resolve, given the potential for default that could cripple world financial markets.

Another Democrat priority is immigration. One of the most powerful images of the lame-duck session was a Senate visitors’ gallery crowded with first-generation US college students, who held hands as lawmakers rejected the Dream Act. The Bill would have provided a path to citizenship for people who entered the country illegally with their parents before they turned 16.

Republicans complained about the timing of the Bill, but Democrats took note that Republican candidates lost closely contested Senate seats in California, Colorado and Nevada, all states where Hispanic voters are a potent force.

On the fiscal front in particular, the contrast between public rhetoric and behind-the-scenes negotiating is stark.

Some Republicans are talking with key Democrats about beginning a deficit-reduction effort that could define the next year and become one of the dominant themes of Obama’s re-election campaign.

Obama’s direct intervention was crucial to the success of the lame-duck session. Obama, along with vice-president Joe Biden, worked with Republicans on the tax-cut Bill and the nuclear arms treaty.

Democrats took note in recent weeks that the White House lured labour union support for the South Korea trade pact, potentially blunting Democrat opposition on Capitol Hill, although major unions such as the AFL-CIO and the United Steelworkers remain opposed to the agreement.

“When the President intervened and sought to negotiate directly with the other side in a way that they thought they were being negotiated with, as opposed to being humoured or tolerated, there’s hope that relationship can continue in the future,” said Nebraska Senator Ben Nelson, a moderate who is often a swing vote on major Bills.

“Minority and majority leaders have to negotiate and do all those things they can, but there are going to be those times when the president has to intervene.”

– (Washington Post)