You’ve already heard about how in 2013, the US faces the threat of significant fiscal contraction.Not only are the Bush tax cuts due to expire at the end of this year, but the mandatory spending cuts from the budget battle are due to kick in.
Well it could be even worse.
According to the NYT, there’s a contingent of Republicans who — surprise — don’t think the mandatory spending cuts are going far enough and want the 2013 cuts to be even deeper.
So in other words, the “baseline” budget cuts might not be the worst-case scenario.
Trying to demonstrate anew their push to reduce the size of the government, conservative House Republicans want to cap spending on programs under Congress’s discretion well below the $1.047 trillion cap set by the budget deal last summer. But House Appropriations Committee leaders and Republican moderates, facing tough re-election campaigns, want to stick to the agreement struck with President Obama seven months ago.
Last week, House Budget Committee Republicans met privately with Representative Eric Cantor of Virginia, the majority leader, to try to set a spending limit for the 2013 fiscal year that almost certainly would be below the cap set last year. That brought indignant protests from Democrats and predictions of another spending stalemate, this time just before the November election. The Senate will stick with the $1.047 trillion figure, meaning House and Senate spending bills will start out tens of billions of dollars apart.
There’s a good chance that this could turn into a total mess, though a lot depends on what happens in the election. If the GOP wins The White House, and expands its hold on Congress, we wouldn’t be surprised to see the party reverse course, forget about spending cuts, and embrace tax cuts instead, thus providing more stimulus. On the other hand, if Obama wins, and Republicans lose with an establishment middle-grounder like Mitt Romney, then there’s a good bet that house GOPers would really go hard on this front.
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