The crunch will come on March 27, when the federal account juggling going on in Washington finally will end. Then sequestration will begin.
Congress is deadlocked. Senate Democrats are proposing tax hikes. Surprise, surprise. They want taxes to increase by a trillion dollars over 10 years — the ever-popular “decade game. ” They will also cut spending by $1 trillion way out there toward the end of the decade. There will also be $100 billion in shovel-ready federal stimulus spending.
There is no way that Boehner will accept it.
The House Republicans are being led, so to speak, by Paul Ryan. He proposes tax cuts. Surprise, surprise. He also recommends lowering income taxes to 25% at the top, 10% below that, and half the voters will pay no incomes taxes at all. This will balance the budget . . . in 2023. As for Social Security, it is ignored. What about Obamacare? Ignored.
There is no way that Harry Reid will accept it. Obama will not sign it.
In short, the two parties have adopted non-starting plans to take to the folks back home in November 2014. “We tried. We got nowhere.”
In May, the charade will end. The debt ceiling will hit in full legal force once again. Then the government will face a real crunch, not the mini-crunch that begins later this month. Then push will come to shove.
At that point, Boehner will cave. Caving is his middle name. He will eat his latest mud sandwich, just as he did when TARP came up for a vote in 2008, when he and the Republicans voted for TARP against the bipartisan wishes of the folks back home, who wisely smelled a scam.
The question is this: How far will Obama cave? Will he hold fast, imitating Clinton in 1995, and lay the blame on the Republicans? Will he let 10% or more of the federal government shut down? Will he force Boehner and the House Republicans to add more mud to their sandwich?
Politically, that would be the smart move. But will he risk it?
None of it matters, except as political show. There will be no balancing of the budget. The present value of the unfunded liability of the federal government is over $222 trillion. The government at some point will default. But the play-pretend theater is fun to watch.