Opinion -- What’s Ahead in Congress This Year

By Lee H. Hamilton

 

Earlier this year, it seemed there might be some hope for Capitol Hill when Congress dealt easily with raising the debt ceiling. But don’t let that single episode fool you. As President Obama and House Republicans circle each other over the forthcoming budget cuts known as the “sequester,” it’s a reminder that Congress and the White House have a complicated legislative agenda ahead — and that none of the items on it will come easily.

 

We’ll get to the specifics in a moment, but two things need to be said up front. The first is that despite President Obama’s exhortations in his State of the Union speech, major policy changes will be difficult to make. The Democrats may have increased their margin in the Senate, but the Republicans still control the House. The ideological polarization and apparently incompatible views that marked dealings between the two bodies show no sign of abating. Significant policy initiatives are not impossible, but it’s safest to have subdued expectations.

 

Second, although rank-and-file members seem more willing than in the recent past to part with their caucuses on high-profile votes, power will continue to rest with the leadership. Over the year ahead, the dynamic to watch will involve the caucus leaders in both houses — ordinary members may have some impact on the margins, but they won’t be the center of the action.

 

The big issue, of course, will continue to be the budget and fiscal affairs. The major questions are: Can we get our fiscal house in order? Can we revive economic growth and make the investments we need in human and physical capital? And can we figure out a reasonable way to pay for the government we require — one that doesn’t need the 73,000 pages of rules and regulations that burden our current tax code?

 

However Congress and the White House proceed, it’s unlikely there will be any “grand bargain.” Instead, they are likely to make piecemeal progress on the core issues: increasing tax revenues and cutting spending on entitlements. Confrontations over these matters will make it harder to tackle other economic issues that need addressing, such as how to address the regulation of the biggest banks and how to finance the infrastructure that our economic growth desperately needs.

 

Congress will also turn to health care. As long as President Obama is in office, his signature health plan will not be repealed, but there will almost certainly be fights over its implementation and funding. The big issue — how to control health-care costs — will remain a centerpiece of the debate, but it is unclear how it will get addressed.

 

On the other hand, there is unambiguous movement on immigration reform. While Democrats have coalesced around a comprehensive approach to the issue — which would include ways of easing the stay of highly skilled workers, a guest-worker program, and a path to citizenship for the 11 million illegal immigrants in the country — Republicans have generally preferred tackling specific issues separately.

 

The two sides can find common ground, especially on high-skilled workers. Possible citizenship, on the other hand, will be much knottier to resolve. So while the gridlock may be easing, comprehensive reform of our broken immigration system is not assured.

 

You can also look for piece-by-piece initiatives on gun control. While the White House and some members of Congress are looking for wide-ranging legislation banning assault weapons and high-capacity magazines, others are focused on specific proposals that can gain bipartisan support. Some members with widely different views, for instance, are coalescing around an effort to expand requirements for background checks on gun sales.

 

Climate change, which gained national force last year with Hurricane Sandy, is less likely to see congressional action. Despite the certain threat of rising seas and storm surges, Congress seems unprepared to get serious about it. Instead, as he promised in the State of the Union, if Congress cannot act the President will take whatever steps he can by executive order, as he just did with cyber-security.

 

There are drawbacks to this approach, but it is a reminder that when Congress is able to act it remains a player, and when it can’t, it deals itself out of the policy picture.

 

Lee Hamilton is Director of the Center on Congress at Indiana University. He was a member of the U.S. House of Representatives for 34 years.

Opinion -- Washington Needs to Lead. Now.

By Lee H. Hamilton

 

A few weeks ago, I had a conversation with a group of prominent business leaders that I’m still mulling over. We were talking about the intersection between business and government, and they were pretty unhappy. The chief target of their displeasure wasn’t any of the usual suspects, though.

 

Instead of lambasting taxes or regulations, they were most worried about uncertainty in Washington. Their business prospects, they argued, are being hurt by the inability of the political class — and in particular Congress and the White House — to come to terms on pretty much anything: from the year-end package of tax hikes and spending cuts known as the “fiscal cliff” to fixing the health care system to resolving our disagreements over immigration.

 

Now, uncertainty is baked into our political system. As soon as a law passes, hundreds of lobbyists head for Capitol Hill to try to change it, and scores more descend on executive-branch agencies to see if they can nudge the rules implementing the law as they’re written. Legislation that seems buried for good in Congress can abruptly rise from the dead and pass both houses, while laws that passed easily a few years ago suddenly find themselves imperiled.

 

“Nothing ever gets settled in this town,” George Shultz once told the House committee on which I sat when he was secretary of state. “It’s a seething debating society in which the debate never stops, in which people never give up.” Given the nature of our representative democracy, certainty and finality are simply not achievable.

 

Yet the businessmen I met with had an important and valid point. The range of really crucial issues on which Congress has been unable to find common ground is immense. It has yet to decide what to do about tax cuts that are about to lapse. It has a budget in place only until March and has not come to terms with the threat of deep cuts to spending that were part of the debt ceiling deal of 2011. It’s left issues like the future of estate taxes, a new agriculture bill, ensuring the security of our information infrastructure, and a rickety postal service on the table. And it hasn’t given a clue as to how it might want to address issues that are key to our economic competitiveness in coming decades: education, infrastructure, taxes, immigration and the like.

 

As we near the end of the year, anyone trying to plan ahead has to confront the fact that government policy for both the near and long terms is wildly unforeseeable. And no one expects the upcoming election to clarify much of anything.

 

This interminable gridlock in Washington produces a signal lack of leadership. Unable to formulate policy, let alone think strategically about the future, Congress punts. Which is terrible for the country. As The New York Times noted a few months ago, “A rising number of manufacturers are canceling new investments and putting off new hires because they fear paralysis in Washington will...undermine economic growth in the coming months. Executives at companies making everything from electrical components and power systems to automotive parts say the fiscal stalemate is prompting them to pull back now, rather than wait for a possible resolution to the deadlock on Capitol Hill.”

 

The problem is that politicians in Washington get so wrapped up in their own world that they seem unable to recognize the consequences of their inaction and last-minute antics. The bad habits they’ve developed in recent years — an inability to enact a budget or address taxes, the omnibus bills that concentrate power in the hands of just a few people, the lack of transparency and overabundance of partisanship — all have brought us to a point where people who depend on government to create a stable policy environment can no longer do so.

 

Yes, uncertainty may be built into our representative democracy, but so is the assumption that our elected leaders will take responsibility for bringing solidity to the policies that affect our society and economy. Politicians of both parties simply must step up their game, or they’ll create chaos.

 

Lee Hamilton is Director of the Center on Congress at Indiana University. He was a member of the U.S. House of Representatives for 34 years.

Lee Hamilton Commentary -- Is This the Best We can Do?

As you know if you pay attention to national affairs, the United States faces a perfect fiscal storm at the end of this year. A confluence of deadlines and policy triggers unlike anything I can remember in a half-century of public life will produce massive budget cuts and serious tax increases amounting to a 3.5 percent hit on the nation’s Gross Domestic Product.

 

At least, it will if Congress and the White House don’t act. It would be, as Princeton economist Alan Blinder put it recently in The Wall Street Journal, “a disaster for the United States.” So surely it must be all hands on deck in Washington, right?

 

You know where I’m going with this. A rational government would be in high gear, yet what do we see? The House has worked for roughly a third of 2012 so far, and will be out of Washington campaigning or tending to constituents for half the remaining weeks of the year. The Senate, meanwhile, has been working on several bills, but the two houses are largely ignoring the coming fiscal meltdown.

 

The looming crisis is a result partly of bad timing — the tax cuts enacted under George W. Bush are due to expire and Congress faces yet another vote on raising the debt ceiling —and partly a result of earlier decisions to defer hard decisions. The temporary payroll tax cut, which members of Congress went to the mat over just a few months ago, will expire. Unemployment benefits are due to be cut back. And, of course, the failure of the congressional “supercommittee” to agree on a deficit-cutting deal has triggered $1.2 trillion in spending cuts. Those cuts are scheduled to go into effect starting at the turn of the year.

 

Most commentators in Washington agree that Congress and the President will eventually act. A few optimists hope for a “grand bargain” that would resolve Democrats’ and Republicans’ differences over taxes, spending and entitlements. But the consensus in Washington seems to be that policy-makers will dither until after the November elections. Then, in a desperate scramble — with a lame-duck Congress and either a lame-duck or a new President — they’ll find some way of postponing the hard decisions for yet a few more months.

 

There is a very real cost to this delay. It’s not a good time to be anyone dependent on the federal budget, and that includes millions of people and 28 percent of the American economy. Pentagon planners and transportation program managers have no idea what their budgets will be. Federal contractors don’t know if funds will be available to pay them. People receiving unemployment benefits have to worry they’ll run out soon. Every taxpayer faces an increase in income taxes.

 

Nobody knows if we will be able to pay our debts as a country, and everyone involved in the financial markets has to worry about what happens if Congress by its inaction allows the economy to contract sharply. The uncertainty will surely erode the confidence of markets and investors, and even worse, of business-people. As PIMCO’s Mohamed El-Erian recently wrote in The Washington Post, “[P]rolonged political inaction is likely to encourage companies to postpone building plants and purchasing equipment and to discourage them from hiring.”

 

We’ve never quite had a situation like this, where so clearly ahead lies a fiscal crisis with enormous implications, yet Congress cannot enact a comprehensive annual budget and blithely assumes that its leaders and the White House will eventually get around to acting — but meanwhile, its members will go home on recess. If the CEO of a major enterprise saw problems of this magnitude looming, it’s hard to imagine he’d call his employees together and tell them all to go on vacation.

 

Reducing the deficit is difficult, but can’t we get our political leaders to act before we go over the fiscal cliff? The only way to do it in a sluggish economy is by raising taxes and cutting spending. Both are unpopular, and our leaders can’t seem to summon the courage to confront hard choices even as we move inexorably closer to a fiscal reckoning. It all makes me wonder if the skeptics who say our government cannot work are right.

 

Lee Hamilton is Director of the Center on Congress at Indiana University. He was a member of the U.S. House of Representatives for 34 years.

Senator Roy Blunt: Where are the jobs, Mr. President?

U.S. Senator Roy Blunt (Mo.) issued the following statement today in response to President Barack Obama’s budget proposal:

“Simply put, the President’s budget does not do nearly enough, quickly enough.

“According to the White House’s own estimates, the long-term savings in this budget over the next decade are still less than this year’s deficit. In addition, using this budget plan, the President will have doubled the national debt from the time he took office through the end of 2012.

“Our nation is spending $3.8 trillion while only taking in $2.2 trillion, which is why the President’s proposal to freeze current spending levels simply does not go far enough. Everything must be on the table if we’re going to ensure our federal government is operating as efficiently and effectively as possible.

“Americans rightfully want to know: where are the private sector jobs, and why is the government spending a bigger percentage of the economy than ever before? We can no longer continue spending more than we’re taking in – the federal government must start living within our means, just like every family and job creator nationwide.”

White House calls yesterday's ruling on Affordable Healthcare Act "Judicial Activism."

The White House says that yesterday's ruling striking down the Affordable Care Act is a case of judicial activism. They say that most other judges have upheld it in other legal challenges. However, the problem is that the Supreme Court has a 5-4 conservative majority right now. Therefore, we think that the Supreme Court will at the very least overturn the portion requiring everyone to have health insurance.

http://www.whitehouse.gov/blog/2011/01/31/judicial-activism-and-affordable-care-act