Politics has felt embattled so far this year, and Congress’s biggest test yet is upon us. The interim budget is due April 29, and so far there is still a deadlock preventing resolution.
Congress has proven that they are expert at bickering and stagnation, and the impending budgetary crisis is making many Americans nervous. Will we see government shutdowns, the likes of which frequently plagued Clinton and Obama? Or, can Trump successfully negotiate a working government with entrenched representatives who have clearly abandoned their desire to represent the American people?
It boils down to a handful of decisive issues, so let’s review them and see if our government will continue to function next month.
Health Care
It’s been one of the biggest topics of the year, and since Republicans in Congress already botched the easiest chance they had for reform, it is now a hot-button issue that threatens a government shutdown.
The battle lines are pretty clear for the interim budget that needs to be approved this week. The Democrats need substantial funding to maintain Obamacare subsidies and keep it alive. The Republicans haven’t replaced Obamacare, so they are willing to use subsidy funding as a bargaining chip.
Ironically, the primary fight over health care is inexorably tied to Trump’s border wall. He has promised to support Obamacare funding (for now) if the Democrats concede and approve initial funding to get wall construction underway.
So far, the Democrats have been devout in their refusal to negotiate, but their backs are against the wall, and despite their efforts to shift blame, it will be obvious which party is responsible for any immediate shutdown.
Tax Code
Tax reform is not as immediate a threat as health care and wall funding, but it is still a major issue. Republicans are still hashing out the details on comprehensive reform, so that won’t affect the May budget, but it will likely be a primary negotiating point in October.
In the short term, Republicans have only suggest minor regulations to corporate tax incentives that are largely tied to regulatory oversight. In short, Republicans are looking for low-impact ways to reduce tax burden in small amounts.
After the interim budget is passed, you can expect a more aggressive approach, and it will have the largest impact on next year’s budget (which has to be approved by October).
The Standard Fight
While the previous issues are bigger news entries, they still constitute a minority of budgetary disagreements. The traditional battles are all still waging, pitting defense funding against social programs.
Despite their minority, Democrats are still trying to expand their favorite social programs, including but not limited to affordable housing programs, federal welfare, Medicaid and Medicare. Republicans, for their part, are being unusually passive.
The majority of their lofty aims that include a substantial infrastructure budget and targeting sanctuary cities have mostly been excluded from current talks. Yet, even as they try to play ball, the Democrats are all too willing to flex what little power they have to prevent progress.
State of Shutdown
The first shutdown could potentially happen this weekend, but that is very unlikely. Congress can temporarily extend the current budget and deadlines to prevent a partial shutdown on the April 29 deadline. This appears to be the direction we’re headed, as neither side has made a significant enough concession to end the deadlock.
The primary problem is that Republicans need at least 8 Democratic votes to get any budget passed. As extensions are put into play, the likelihood of entrenched politicians growing more stubborn increases, and each temporary delay makes an eventual shutdown more likely. That said, most experts agree that a shutdown before October is at worst a one-in-three probability.
The outlook for October is less favorable. Government shutdowns are extremely embarrassing for both parties, but obstructionism seems to be growing as the Democrats’ only real agenda. When the fiscal year ends in the fall, the parties will be forced to address controversial topics, and Trump’s first round of battles on tax code and health care will conclude. He has offered substantial negotiation so far, and he won’t relent on trying to get reform through Congress, but ultimately the power of the president is still limited.
Just how great we can make America in Trump’s first year is frustratingly impacted by a Democrat minority in Congress. Currently, the estimate is a 60-percent chance that Democrats will force a government shutdown by the end of the year.
Regards,
Ethan Warrick
Editor
Wealth Authority
