New Budget Deal on the Horizon
(Article originally published in July/Aug 2015 edition.)
This summer’s headlines have been shouting at us about the Supreme Court’s decisions regarding Obamacare, gay marriage, the fate of the Confederate flag, and the international agreement limiting Iran’s nuclear program. Meanwhile, President Obama and Congress have been at work on matters affecting our nation’s economic future.
The Trans-Pacific Partnership Proposal
To their credit, President Obama and the Republican congressional leadership successfully navigated through obstacles thrown in their path by a determined organized labor movement and its congressional Democratic allies and granted Obama fast-track authority for a new trade deal with the Trans-Pacific Partnership (TPP). Now it’s up to the President to conclude the deal and for Congress to approve it.
Considering how far along that process is and what Members of Congress already understand about it, the strong likelihood is that Obama will succeed on both counts. Of course, that does not mean there won’t be a struggle to secure final approval, but the die has largely been cast, and a final measure may be ripe for inclusion in an end-of-the-year omnibus legislative package.
Sequestration has largely been sidelined for the last two fiscal years because of the landmark Ryan-Murray Bipartisan Budget Act of 2013. Following the government shutdown of October 2013, congressional Republicans reversed course and reached a compromise with the President and congressional Democrats that raised sequestration funding limits for two fiscal years and also raised the national debt limit such that Congress will not likely have to raise it again until this November, based on current predictions. The result has been a welcome fiscal cease-fire.
But the cease-fire is quickly expiring, and Congress and the President must once again come to grips with the same fiscal issues that have plagued the political parties. Republicans oppose tax increases while proposing increased defense spending. Democrats oppose cuts to social programs while proposing increased infrastructure and investment spending and higher taxes. This fundamental discord will surely resurface this fall.
Perhaps the best news for the nation is that the Republican congressional leadership has foresworn threatening the nation’s ability to borrow as it did in 2011 and promised not to hold the debt limit hostage to a budget agreement. Likewise, having been so badly stung for its role in shutting down the government in 2013, Republicans are far less likely to let that happen again. With their presidential candidates on the campaign trail and the first primaries set to be held in early 2016, it would be an entirely self-inflicted wound to the Republican brand to be perceived as responsible for yet another shutdown.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.