The Times West Virginian

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January 18, 2014

Fiscal fatigue grabs Washington

WASHINGTON — After last fall’s tumultuous, bitterly partisan debt ceiling and government shutdown fights, a sense of fiscal fatigue seems to be setting in among many Washington policymakers as President Barack Obama prepares for his fifth State of the Union address later this month.

A declining U.S. budget deficit, still-accommodative Federal Reserve and a small-bore budget deal negotiated last month — given final approval Thursday in Congress and signed by Obama on Friday — are helping to temper partisan rhetoric in the short term as attention in Washington shifts to the approaching midterm elections.

The recovery from the deep recession of 2007-2009 has been one of the slowest in history and still has a ways to go, especially in terms of regaining lost jobs. That was driven home by a Labor Department report  last Friday that U.S. employers added just 74,000 jobs last month,  far fewer than had been forecast and the smallest monthly gain in three years.

The overall jobless rate dropped to 6.7 percent from 7 percent in November, the lowest level since October 2008. Much of the decline came from Americans who stopped looking for jobs and are no longer being counted by the government as unemployed.  Meanwhile, a growing number of baby boomers are retiring.

Still, economists are generally predicting a pickup in economic growth in 2014 amid a continued favorable climate of low inflation, falling oil prices, a housing recovery and the Fed sticking to its plan to only slowly pare back the hundreds of billions of dollars in financial stimulus it has pumped into the economy over the past four years.

Meanwhile, recent polls show rising public distaste for brinkmanship and dysfunction on both sides of the political divide in Washington. In a recent poll, conducted by the AP-NORC Center for Public Affairs Research, 70 percent said they lacked confidence in the government’s ability “to make progress on the important problems and issues facing the country in 2014.”

Last October, GOP conservatives forced a 16-day government shutdown with their failed attempt to defund Obama’s health insurance overhaul.  But any public relations advantage Democrats may have reaped from that episode may have been eroded or lost in the problem-plagued rollout of the health care program.

Leaders of both parties are expressing frustration over the recent bouts of gridlock that come from divided control of government, with Democrats now controlling both the executive branch and the Senate and Republicans ruling the House. Neither party wants to bear the blame for the perceived dysfunction — while both sides are quick to blame the other for it.

And both sides are trying to better position themselves as they calculate strategy with a close eye on potential midterm wins and losses.

The $1.1 trillion spending compromise grew out of an agreement negotiated last month by Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash. — leaders respectively of the House and Senate Budget committees.  It funds the government through Sept. 30, eases across-the-board government mandatory spending cuts and eliminates, for now, the likelihood of an election-year government shutdown.

The measure passed the House 359-67 on Wednesday and the Senate 72-26 on Thursday. Obama signed it Friday, averting any interruption in government funding Saturday at midnight.

It was a modest agreement, not the grand bargain some had hoped for.  But for once, at least, the two sides were roughly on the same page and debate, for once, was mostly muted.

“It’s bipartisan, bicameral. We did it because we listened to each other and functioned with maximum respect,” said Sen. Barbara Mikulski, D-Md., chairwoman of the Senate Appropriations Committee. “No one wants to shut the government down on either side,” Sen. Richard Shelby of Arizona, the committee’s top Republican, told colleagues.  

The volume of the rhetoric may be lowered a bit, for now, but it’s not clear how long the pause will last.

“The Republicans certainly didn’t want to put themselves in the position they did with respect to the government shutdown,” said Thomas E. Mann a congressional scholar at the Brookings Institution. “And the (Ryan-Murray) agreement was important in terms of setting budget ceilings for two years and giving a fighting shot at getting appropriations bills for next year done. But I don’t think that stretches or moves on to other things.”

“The differences are still stark,” he said.

The two parties, for instance, are squabbling now over Obama’s request to Congress to temporarily restore extended unemployment benefits for about 1.4 million longer-term unemployed workers who lost them when the program expired on Dec. 28. And another battle to raise the nation’s borrowing authority — when the current debt limit debt is reached, probably sometime in March — also looms.

Rich Galen, a GOP consultant and former top aide to Republican House Speaker Newt Gingrich, suggests the now-raging controversy over the rocky health-insurance rollout is transitory and likely to fade with time.

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