Topics: Barack Obama

Morning Examiner: Obama’s ‘nuclear option’ on the budget

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Politics,Beltway Confidential,Conn Carroll,Morning Examiner,Barack Obama,Fiscal Policy

Despite all the partisan rancor on Capitol Hill surrounding federal spending, normally both parties are able to put aside their differences and pass non-controversial appropriations bills like those that fund the Department of Homeland Security and the Department of Veterans Affairs.

But now that President Obama has realized he badly miscalculated when he signed off on the January fiscal cliff deal without securing an end to the sequester, not even funding for Veterans and DHS is safe.

On Monday, the White House issued a Statement of Administration Policy threatening to veto two appropriations bills, funding DHS and Veterans Affairs, that are scheduled to pass this week:

Unless this bill passes the Congress in the context of an overall budget framework that supports our recovery and enables sufficient investments in education, infrastructure, innovation and national security for our economy to compete in the future, the President’s senior advisors would recommend that he veto H.R. 2217 and any other legislation that implements the House Republican Budget framework.

In other words, unless House and Senate Republicans agree to a conference committee on the budget resolutions the two chambers passed this spring, Obama will veto all stand-alone appropriations bills. Call it Obama’s nuclear option on the budget.

Go big or go home
Obama hopes this new nuclear option on the budget will force Republicans to appoint conferees for a conference committee where, at minimum, sequestration can be undone. Even better for Obama would be if his budget nuclear option forces Republicans to accept a grand bargain on debt reduction that lets federal spending keep increasing at a record pace.

Republicans, however, know that any conference committee deal to turn off sequestration, let alone a grand bargain, would have to include tax hikes. Complicating matters further, thanks to the Federal Reserve’s printing press, the Treasury Department won’t have to raise the debt limit until sometime this fall … right around the same time that the current spending authorization bills expire. Obama is trying to set up a situation where Republican leaders have to find the votes for raising the debt limit, and keep the government from shutting down, all without any tax hikes.

Republicans had hoped they could tamp down some of the brinksmanship by ensuring DHS and Veterans Affairs would have the funding needed to stay open. Obama’s Monday veto threat shows he wants the stakes to be as large as possible for both sides.

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