With the first round voting in the French presidential election out of the way, it will be all Congress (and the White House) all the time this week as the clock ticks down to a possible government shut down when spending authority runs out on April 28.
The most likely outcome is a Congressional vote to extend the current spending authority under the December Continuing Resolution for another week or two. That would leave spending levels unchanged–not any faction’s first choice–but give Congress a little more time to work out a Continuing Resolution that would take the federal government through the end of the fiscal year on September 30.
But even though I think that’s the most likely outcome this week, I’d be surprised if the week doesn’t bring chaos, confusion, acrimony, and finger-pointing. Today, while markets are basking in the results of the French election, is likely to be the best day of the week until an actual last minute vote, assuming we get one on a short-term Continuing Resolution.
The sources of the likely chaos?
The White House seem determined to push for another vote in the House of Representatives on repealing and replacing Obamacare–even though this is clearly a Congress that can’t walk and chew gum at the same time. (Add in the likely announcement of the outline of the Trump tax cuts on Wednesday. Plenty for everyone to hate at this stage.) Team Trump also continues to demand that Congress include money for the initial stages of The Wall and for increased military spending. No way that adds the Democratic votes that House Speaker Paul Ryan may need to get a bill through the House because…
The ultra-conservative Freedom Caucus may be willing to shut down the government if Ryan doesn’t include de-funding Planned Parenthood, defunding Obamacare, and defunding “sanctuary cities. At the same time a significant number of Freedom Caucus members so dislike all government spending that they are unlikely to go along with any increases in domestic spending that are proposed as sweeteners to bring some House Democrats on board.
The prime potential sweetener that Republicans might offer Democrats is a continuation of insurance subsidy programs under Obamacare. The White House has already suggested a deal–rejected so far by Republicans and Democrats alike–to add $1 to the subsidy payments to insurers in order to lower deductibles and other costs for low-income consumers for every $1 in spending on The Wall. Such a deal is likely to kill any support from conservative Republicans committed to repealing Obamacare.
A demand from coal-state Senators that the temporary agreement that has the federal government paying health benefits for about 20,000 retired miners be made permanent. (The temporary agreement ends on April 28.) Senate Majority Leader Mitch McConnell promised to make the agreement permanent the next time Congress voted on a spending bill when Congress passed the December Continuing Resolution. McConnell can’t afford to lose votes from West Virginia, Ohio, Pennsylvania and Kentucky since he already faces the tough task of getting 60 votes in a Senate where Republicans only hold 52 seats.
How messy is this likely to get over the next few days? Very messy, I’d say.
And even if the end result is passing a bill that gives Congress another week or two to work out a deal, every new example of gridlock in Congress just eats away a little more at hopes on Wall Street for big corporate tax cuts this year.