Congress narrowly avoided a shutdown of the Department of Homeland Security on Friday evening and will return to work with just seven days to avoid it again. Just like last time, there is no reason to think Republicans will allow DHS to shut down and risk getting blamed for putting the nation’s security at risk. But also like last time, there is no clear path to getting a funding bill through for the agency.
Republicans in the House still want any measure funding DHS to roll back President Barack Obama‘s executive actions on immigration. Democrats in the Senate will still block any measure that includes immigration riders. And if Republicans decide to go nuclear and force the bill through with a simple majority (which is not likely), Obama will just veto it.
The most likely scenario is an attempt by Republicans to create a House-Senate conference on the measure, which Democrats in the Senate will block. House Speaker John Boehner could then move to pass a clean DHS spending bill that would succeed with heavy Democratic support.
Republicans say there is no such plan to do this. But there probably is. And Boehner would likely not put his constantly-in-peril speakership at further risk by providing Republicans a path out of this no-win scenario. Conservatives in the House will grumble that Boehner caved to Obama again. But they always do that and nothing winds up happening.
So chances are that we do not go down to the wire again this Friday. But we might. And even if Boehner navigates a path out the current mess the lesson from the DHS fight is clear: Congress is just as dysfunctional under full GOP control as it was under split leadership between Democrats in the Senate and Republicans in the House.
All the GOP leadership’s promises of a functional legislative branch free of the messy cliff fights of recent years was exactly what we thought it was: complete nonsense.
And this bodes very ill for the rest of the year, when partisan pressures will only rise as the 2016 presidential election year draws closer. The first casualties will likely be hopes for bipartisan progress on tax reform. Hopes for a deal were always overblown given massive differences on how to lower corporate rates and close “loopholes” enjoyed by many industries.
Now it’s largely impossible to see a path forward that is conservative enough to get through the House but does not slash revenues so much that it could survive a Democratic filibuster in the Senate or a presidential veto.
A deal to give Obama trade promotion authority allowing him to finish the Trans-Pacific Partnership trade deal remains possible. The House would likely approve it over grumbling from some on the right who do not want to give the president anything. The Senate could be tougher, where progressive Democrats led by Sen. Elizabeth Warren, D-Mass., could put up a serious fight and try to bring along more populist Republicans wary of the impact on U.S. jobs.
But the biggest negative impact from the still-dysfunctional Congress is likely to show up in late summer or early fall when Treasury runs out of extraordinary measures to avoid breaching the debt limit and funding for the government runs out.
Those two things could collide at the end of September and create a massive cliff and potential default. Republicans eyeing 2016 will want to extract more spending cuts and other concessions from Obama. The president and House and Senate Democrats will see an opportunity for Republicans to get blamed for a massive train wreck and will have no interest in caving on anything. Plenty can happen between now and then to make this nightmare scenario less likely. But should it come to pass, the victim will be the U.S. economy.
The jobless rate should be headed to around 5.3 percent by summer’s end, the lowest rate since before the financial crisis began in 2008. Wages should finally be nearing a 3 percent annual rate of increase, outstripping inflation and easing some of the worst scars from the Great Recession. Gross domestic product and consumer and business confidence should all be strong. And Congress could kill it all with a near-default and possibly a prolonged government shutdown.
It’s happened before, in 2011 and 2012, and the political pressure and incompetent congressional leadership could bring all those nightmares right back again.