With other issues pressing, Congress has more debt debate ahead

WASHINGTON–With a debt deal done and default averted, Congress can move on to other pressing issues now, right?

There’s certainly a crushing legislative agenda awaiting lawmakers when they return from their August break: Rewriting No Child Left Behind. Finalizing a multi-year transportation bill. And finding a long-term fix, instead of an emergency patch, to keep the Federal Aviation Administration operating at full strength.

Plus, amid the current economic uncertainty and market volatility, both parties say they want to pivot to a “jobs agenda” as soon as possible.

“We now have the debt-ceiling fight behind us, and we cannot afford to have any more distractions,” Rep. Rosa DeLauro, D-3rd District, said at a news conference last week, before she and other lawmakers left Washington for a five-week recess. “We have to do everything that we can to create good, well-paying jobs.”

But wish as they might to turn to other issues, lawmakers will almost certainly face the same set of bedeviling questions come September: how to reach an agreement on spending cuts, tax increases, and entitlement reform in a way that will reduce the federal debt.

“Saying that’s going to dominate is an understatement,” said ex-Rep. Bill Frenzel, a Republican from Minnesota and 20-year congressional veteran now at the Brookings Institution.

That ongoing ideological clash will play out on two parallel tracks, one small bore and one big picture. First, lawmakers will face a quick deadline to finish the 2012 appropriations bills, with skirmishes over spending levels for a bevy of programs.

Rep. Joe Courtney, D-2nd District, noted that in finishing the fiscal year 2011 spending deal, lawmakers barely avoided a government shutdown this spring. That deal expires at the end of September, about 25 days after Congress returns from its August break.

And the debt deal that lawmakers just agreed to earlier this month includes new budget caps for the coming fiscal year, so lawmakers will have to draft 12 spending bills that live within those limits before the beginning of October.

“We’re looking at Oct. 1 the minute we’re going to get back here,” Courtney said of the deadline to reach a 2012 spending agreement. “And I don’t think anyone has any confidence that’s going to get resolved easily.”

That was one reason Courtney and other Democrats refused to support a two-stage debt-ceiling bill crafted by House Speaker John Boehner, R-Ohio. That proposal would have forced a second vote to raise the debt-ceiling in December, virtually ensuring a second high-stakes, high-stress standoff over the debt limit, at the same time that lawmakers were also grappling with the 2012 budget.

The final deal that Congress passed raised the debt ceiling through 2013, avoiding the need for a second vote. But because it punted some hard decisions on debt-reduction to a special Joint Select Committee on Deficit Reduction, it ensures that debt debate will rage on.

So even as Congress delves into the 2012 budget, that bipartisan “super committee” will be tackling longer-term fiscal pressures, with a mandate of agreeing on $1.5 trillion in additional cuts by Nov. 23. Lawmakers on that panel can consider tax increases, entitlement cuts, and spending reductions. Any package they come up with will be subject to an up-or-down vote in the full House and Senate before Christmas.

“Those two items are going to jam up the agenda, I think, unmercifully,” Frenzel said of the fiscal year 2012 spending bills and the special committee’s work.

If the committee or the full Congress can’t agree on a debt-reduction package, then automatic spending cuts will be triggered, split evenly between defense and domestic programs. Both parties desperately want to avoid that trigger, because it targets Medicare, a cherished Democratic program, and defense spending, a GOP priority. So all eyes will be on the special committee.

“This is not the beginning of the end of dealing with our national debt,” said Sen. Joseph Lieberman, a Connecticut independent as the debate wrapped up last week. “It’s only the end of the beginning.”

Will Congress be able to get anything else done? “It’s going to make it hard,” said Lieberman. It doesn’t help, he said, that in the wake of the debt negotiations, partisan tensions are running extremely high. The bad feelings and dug-in positions from that debate will make it difficult to agree on much, even issues where there’s room for consensus, such as rewriting the roundly-criticized No Child Left Behind law, which spells out federal policy for the nation’s elementary and secondary schools.

The consequences of congressional inaction became starkly clear during the wrangling over the FAA bill. Senate Democrats and House Republicans were unable to resolve several key issues, and they let the current FAA authorization bill expire as the debt-ceiling drama unfolded. That led to the furlough of 4,000 FAA employees and about 75,000 construction workers for two full weeks.

After days of finger-pointing, lawmakers found a way to break the FAA impasse temporarily. But that patch expires on Sept. 16, giving the House and Senate precious little time to resolve a dozen differences over a long-term FAA bill–or risk another partial FAA shutdown next month.

Similarly, a failure to revamp the NLCB education bill would put kids, teachers, and parents in a tough spot, as many good schools scramble to meet the law’s proficiency requirements, which critics say are unrealistic. The result is that improving schools may unjustly be labeled as “failing,” suffering accompanying penalties. With legislative gridlock likely, federal education officials have said they will create a waiver process to help schools get around congressional inaction.

“A lot of things that should be reauthorized and fixed [or] improved will be rolled over,” Lieberman predicted, because “the inevitable focus is going to continue to be on how do we balance the budget.”

DeLauro disagreed, saying that Congress could tackle the big-picture spending questions along with other policy matters. “You can walk and chew gum at the same time,” she said, promoting her proposal for an infrastructure bank, which would use government funding to leverage private resources for transportation, energy, water and other major national projects.

She said it would be a major job-generator, and could gain traction in the fall as lawmakers turn their attention toward the economy.

Rep. John Larson, D-1st District, said Congress should create a special committee on jobs, similar to the new deficit reduction panel, that would be tasked with finding ways to bring down the 9.1 percent unemployment rate. Larson said the panel could consider DeLauro’s infrastructure bank idea or a “good-old fashioned WPA” type initiative, referring to the massive Depression-era public works, anti-poverty program.

Whatever the panel’s agenda, he said, the priority should be bringing the nation back to full employment.

But Lieberman noted that while many in Congress will want to focus on jobs and other stimulus measures, there won’t much political support for funding new initiatives that could bolster the economy, whether an infrastructure bank, a public works program, or anything else.

“There’s a limited assortment of proposals to create more jobs because we’re not going to be able to spend money to do so,” Lieberman said. “That’s just where we are.”

To be sure, DeLauro said that one reason she voted against the debt deal was that it included tight spending caps for 2012 and the promise for more cuts to come. “Given what was in this legislation, it makes these opportunities for economic investment, for economic growth, all the more difficult,” she said.

And Frenzel said that while there have been times that federal lawmakers “can walk and chew gum” at the same time, now is probably not one of them. “I don’t think Congress can do that now, because of the heavy polarization and the really heavy feelings about the debt,” he said. “Congress is going to be consumed by that.”