A guest post by Shawn Sanders.

This is a first piece in a series of articles about the politics of the inner beltway.

It is difficult to imagine Nancy Pelosi and Michelle Bachmann voting on the same side of a bill affirming the beauty of double rainbows.  So what is to be made of their stunning bipartisanship, over the budget of all things?  Yes that is correct, their opinions and voting records do converge on the most pressing matter before Congress.  Both stood opposed to the continuing resolutions sent to the President in this 112th Congress.

For all the sound and fury, those two continuing resolutions passed the House in what should be the most auspicious of bipartisan fashion.  Those voting for passage represented the center leaning blocs of their respective parties.  The liberal left howled the cuts were too deep while the hard right kicked up dust over the cuts being too shallow.  But the coalition that pushed the resolutions through was always fragile.  It is now coming apart at the seams and pushing us closer to a government shutdown than at any point since the Gingrich years.

Perhaps the most troubling sign of a looming shutdown came Tuesday when Dan Lungren, chairman of the Committee on House Administration, sent out a “Dear Colleague” letter instructing chiefs of staff to draw up lists of non-essential staffers to be furloughed in the event of a shutdown.  That same day on the Senate side of the Hill, chiefs of staff were assembled and told non-essential staff would have to turn in their keys, badges and (mon dieu) Blackberries.  With over 17,000 staff members working on the Hill, the logistics behind such a move could mean people turning in their badges as early as Friday afternoon.

If not the last best hope to avert a shutdown, no doubt the second to last best hope was the release of Paul Ryan’s 2012 budget.  It was the highest hope of Congressional leaders on both sides of the aisle that upon its release, members backing large cuts would decide to save their ammunition for the 2012 budget negotiations.  For that reason Ryan moved up the release of his budget from after April 15th to April 6, and then moved it up further by releasing details on April 3rd.  Ultimately this strategy had the opposite of the desired effect.  Left wing democrats have been hammering the Ryan budget and right wing Republicans have made clear they prefer cutting discretionary spending before embracing Ryan’s entitlement reforms.

But if it didn’t move the ball forward, at least it didn’t move the ball backward.  The far right and left were already opposed to any compromise.  Enter the Democratic led Senate, and Harry Reid’s master plan to drive a wedge between the Republican leadership and the Tea Party wing.  Chuck Schumer’s “extreme” gaffe is a central element of this strategy.  A recent article in The Hill noted democratic strategists saying they could win support amongst “centrist voters, including younger voters, women and Hispanics” if they could portray Boehner as beholden to the Tea Party.  Democratic intransigence in the Senate should not be underestimated given they see the road to #winning 2012 running between the Tea Party and Republican leadership.

If Democrats are successful in this strategy then it makes the previous coalition of less polarized Republicans and Democrats unworkable.  Imagine John Boehner and Nancy Pelosi voting on the same side of any budget, and imagine the political implications each would face for doing so, then wake up.  Any deal that is acceptable to the left wing of the Democratic Party cannot win a significant number of Republican votes.

 

It is difficult to measure the number of votes the Tea Party can rely on in the House.  One way to estimate is to look at votes on amendments to HR1, the House’s proposed budget for the rest of 2011.  There was an amendment offered by Jeff Flake (R – AZ), who is the most committed deficit reducer in the House.  This amendment was a symbolic cut of $20 million to the Department of Defense.  If someone voted with Flake on this amendment then there should be zero chance of them voting on a compromise budget bill which has cuts that fall short of Tea Party demands.  A total of 92 Republicans voted in favor of that amendment which ultimately lost by a vote of 207-233.

This is the vote total for the last Continuing Resolution signed by the President

H.J.RES.44 Ayes Noes No Vote
Republican 186 54 1
Democratic 85 104 3
TOTALS 271 158 4

 

Here is a hypothetical vote total if all the Republicans who voted for the Flake amendment vote against a compromise budget submitted by their leadership

Ayes Noes No Vote
Republican 148 92 1
Democratic 85 104 3
TOTALS 233 196 4

 

By this cocktail napkin measure, those voting against a budget (for a shutdown) are still short of the 217 votes they would need.  But the margin is rather close.  The 92 Republican “noes” are likely an under counting of opposition, given some superpatriotic Tea Party members couldn’t bring themselves to vote for any defense cuts at all.

A one week continuing resolution is still possible, and a vote is scheduled in the House for April 7 on the hopes that passage there will spur the Senate into action.  Don’t hold your breath though.  On the Hill when the House passes legislation on the premise it will spur the Senate into action it is a move no less desperate and futile than dropping helicopter loads of water on a smoldering nuclear reactor.

April 9th 146 years ago the Civil War officially ended.  This year it might well be the day the government shuts down and among other consequences, closes all national parks.  Reflect for a moment on the prospect of thousands of pissed off Southerners at the gates of old battlefields with their rebel flags flying in defiance of an ineffective and broken government.

–          Shawn Sanders

The opinions expressed in this document are those of Shawn Sanders.  Shawn Sanders is a professional investor.  While he is a registered representative of an investment advisory firm, in no way should his opinion be considered company policy.  The information contained in this document does not contain legal, financial or investment advice.