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6/16/2015

A New Do-Nothing Congress - Bloomberg View

MID TE R ME LE CT ION S

ANewDoNothingCongress

NOV4,20149:03AMEST

ByPeterR.Orszag

aA

Thequestionofthedayis,WhatdifferencewillitmakeifRepublicanstaketheSenate?
Thebackdropisahighlypolarizedpoliticalenvironment.Regardlessofwhetherit'spreferablefor
Congresstoenactbipartisanlaws,themoderateswhoproducethemaresorarethatonlypartisan
legislationislikelytobeconsidered.Gettingsuchlawspassed,though,requiresthatoneparty
controlnotjusttheHouseandtheSenatebutalsotheWhiteHouse.Inaworldwhereyouneedall
three,havingtwoasopposedtoonedoesntmattermuch.
TheneedforgreatercontrolisespeciallythecaseintheSenate,whereatleast60votesare
generallyrequiredtogetanythingdone.TheRepublicans,tobesure,coulduseaprocesscalled
reconciliationtopassbudgetrelatedbillswithjust51votes,buteventhenthelegislationissubject
toapresidentialveto,whichtakes67votestooverturn.Andwhileitstruethatanoticeable
numberofSenateDemocratsaremoderates(andtheirranksmayswellabitaftertoday),their
voteswillnotbesoeasyforRepublicanstoobtainandareprobablynotsufficienttoassemblea
vetoproofmajority.
SoanyonewhoexpectsaSenateshifttoproducebroadtaxreformorimmigrationreformoverthe
nexttwoyearsislikelytobedisappointed.Taxreformiseasytosayandhardtodoimmigration
reformisslightlymoreplausiblebutstillveryunlikelyinthepolarizedenvironment.Sowhat
mighthappen?
Onebadscenarioisanotheroutbreakoffiscaldrama.TheU.S.economyseemstoberecovering,
despiteheadwindsfromabroad,inpartbecause,forthepastyear,lawmakersinWashingtonhave
notcreatedneedlessuncertainty.Nextspring,however,thedebtlimit,thedocfixandotherfiscal
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6/16/2015

A New Do-Nothing Congress - Bloomberg View

cliffswillreartheiruglyheads.
KevinMcCarthy,theHouseMajorityLeader,hasalreadyspokenpubliclyagainstthestrategyof
creatingmountainsoutofthesecliffs:Whyputcliffsupthatholdusbackfromdoingbigger
policy?ManynewlyelectedmembersoftheHouseandSenate,though,maybeitchingforacliff
linkedfight.LetshopetheMcCarthyviewholds,sincethelastthingweneedisarepeatofthe
debtlimitcrisisof2013.
Evenwithoutcliffs,fiscalissueswillcreatetensions.ThetemporarybudgetdealthatDemocratic
SenatorPattyMurrayandRepublicanRepresentativePaulRyanshepherdedthroughCongresslast
yearalleviatedpressureonthediscretionarybudget,butthatpressurewillcomebackinforcein
2015and2016.Thecapsonbothdefenseandnondefensespendingwillbecomeincreasingly
difficulttomeetastimemarcheson,especiallysincetheBarackObamaadministrationand
Congresshavedifferentspendingpriorities.
Whatabouthealthcare?VotestorepealObamacaremaybeinevitable,buttheywillnothave
sufficientsupporttooverridetheinevitablepresidentialveto.Republicansmaydobetterwith
targetedlegislationaimedatprovisionsthatareunpopularwithanumberofDemocrats.Onthat
listarethemedicaldevicetaxandtheIndependentPaymentAdvisoryBoard.Iamasupporterof
both,andbelievetheIndependentPaymentAdvisoryBoardinparticularhasbeenwidely
misunderstood,buttheyarepoliticallyvulnerable.TheWhiteHousewouldbewisetostart
defendingthemnoworatleastlimitthedamageanychangesmightimpose.
ThebestthingthatcouldhappenwouldbeforCongressandtheWhiteHousetoagreetoimprove
theAffordableCareActbypassinglegislationsuchastheBetterCare,LowerCostAct.That
wouldsettlethequestionofwhethervaluebasedpaymentsshouldgotoinsurers(which
Republicansgenerallysupport,intheformofMedicareAdvantageplans)ortoproviders(which
Democratsgenerallysupport,intheformofAccountableCareOrganizationsorbundled
payments)byallowingboth.ItwouldalsoreinforcetherecentdecelerationinMedicare
spending,increasingtheoddsofreapingabiggerfiscaldividendthananydirectpolicyagreement
couldplausiblyachieve.Nevertheless,giventhedifficultiesofmovingforwardintodays
polarizedpolicyworld,itsprobablytoomuchtohopefor.
AfinalitemthatbecomessomewhatmorelikelywithRepublicancontroloftheSenateisthe
TransPacificPartnership,aninternationaltradedealthathasbeenlanguishing.Thecoalitionin
favoroffreetradeishardertocobbletogethertodaythanitwasinthepast,butRepublicansare
stillgenerallymoresupportivethancongressionalDemocratsare.Providingtradepromotion
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A New Do-Nothing Congress - Bloomberg View

authorityandratifyingtheTPP,oncetheinternationalnegotiationswrapup,couldletRepublicans
demonstrateeffectivenessonanissuethathappenstosplittheDemocrats.
Mostly,though,weshouldexpectcontinuationofnotverymuchfromWashington.Inaction,tobe
sure,isbetterthandrama.ThatswhytherecentcommentsfromMr.McCarthy,alongwiththe
Republicans'expecteddesiretoretaintheirSenatemajorityin2016,suggestthatwemay,atleast,
nothavetoputupwithunnecessarydistractions.
Tocontactthewriterofthisarticle:PeterOrszagatorszagbloomberg@gmail.com.
Tocontacttheeditorresponsibleforthisarticle:MaryDuenwaldatmduenwald@bloomberg.net.

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