| February 2011 Small Month, Big Tests  February's 28 days will be packed with political drama as Washington struggles to come to grips with the last election and prepares for the next one. The backdrop for all of it will be the budget battle raging between Republicans in Congress and President Obama. With the federal government nearly out of borrowing ability and the largest-ever budget deficit of $1.48 trillion just forecast, the Republican House of Representatives is clamoring for deep cuts to current spending levels. The president, meanwhile, is calling for long-term changes but with a continuation of short-term deficit spending he says can create jobs. The conflict will come to a head this month. First, Obama will lay out his spending priorities with a budget for the fiscal year beginning in October. The proposal, expected out Feb. 14, will likely be in direct conflict with the Republican budget proposal, which is expected to dramatically roll back spending, except for interest on existing debt mandatory outlays for entitlement programs like Social Security and Medicare. At the same time, the clock will be running out on the current law that funds the government. Unable to reach a long-term compromise during December's lame-duck session, lawmakers agreed to continue government funding at existing levels only through the beginning of March. That means lawmakers will have to come up with a plan for the remaining seven months of the federal fiscal year. Again, Republicans are looking to slash spending, while Democrats warn of dire consequences if stimulus programs are reduced.
The bill to fund the government will be the first big test for the new Republican leadership in the House, particularly Speaker John Boehner and his star Budget Committee Chairman Rep. Paul Ryan, R-Wisc. Tea Party-backed freshmen are demanding cuts beyond even the aggressive reductions Ryan has proposed, but whatever the House comes up with has to get past the Democratic-controlled Senate and a potential veto by Obama. Boehner and Ryan will have to walk a tightrope between keeping up their credibility with conservatives and producing a spending plan that can get bipartisan support in the Senate.
Hanging over all of this is a pending request from Obama to increase the government's borrowing limit. One year ago this month, Congress authorized the government to be up to $14.3 trillion in debt. New spending and weak tax revenue have pushed the government to the brink of the credit limit and the administration is warning of federal default and a worldwide financial crisis if House Republicans don't go along.
But sentiment is growing inside the Republican caucus for refusing Obama's request and putting the government on something like a payment plan. Obligations like debt repayment, pensions, payrolls, war funds and money for day-to-day operations would come first while long-term obligations, like big government projects approved, but not yet begun, would be put on hold. Conservatives say this "sequencing" will avoid default and force the kind of cutting necessary to bring down spending overall.
The president wants the debt ceiling raised by March, but this is likely to be one of the most unpopular proposals to come from Obama. Voters overwhelmingly disapprove of more borrowing and Republicans believe public sentiment is on their side. Republican leaders have said the ceiling must be raised but are also seeking deep concessions from Democrats on spending as part of the deal. While the White House has taken a hard line, and suggested that opposing the increase is reckless and not up for debate, the administration is being constantly reminded that then-Sen. Obama voted against a similar request form President Gorge W. Bush in 2006, calling Bush's plea "a sign of leadership failure"
This debt battle comes just as Obama is kicking off his 2012 campaign with a bid to recast himself as a centrist who can prosper in divided government. After two years dedicated largely to his landmark, but politically costly, national health-care law, Obama is focusing on proposals to improve the job market.
But as he tries to make this pivot, Obama is still working to protect his accomplishment on health care. A federal judge in Florida ruled Monday in favor of 26 states that are seeking to block key provisions of the Obama law, including its requirement that all Americans buy private health insurance or enroll in a government program. This suit is expected to be joined with another constitutional challenge and head to the Supreme Court later this year. But the ruling adds new urgency to the negotiations in the Senate over major modifications to the law. House Republicans have already passed a repeal of the measure, and while that's not likely to pass the Senate, few expect the legislation to stand unchanged. This month could yield the beginnings of some bipartisan compromise on changing the law.
It will be hard for Obama to keep his fellow Democrats in line on this one since he's not the only one with a 2012 campaign to worry about. There are 23 Democratic Senate seats up in 2012, but only 11 seats held by Republicans, and now is the time that challengers will begin to emerge. In Virginia, former Sen. George Allen is already looking for a rematch with the Democrat who beat him in 2006, Sen. Jim Webb. Expect to see candidates emerge in other swing states this month. As the election nears, moderate Democrats will be working hard to show that they are different from Obama.
The president this month will also be dealing with the logistics of his own campaign. His White House is undergoing its first major shakeup as trusted insiders David Axelrod and Robert Gibbs leave to focus on the reelection effort in Chicago. As Obama is getting to know his new team, led by new Chief of Staff William Daley, he also must begin the nearly-constant fundraising he will need to raise the $1 billion the president is expected to raise and spend.
And Obama begins his campaign without knowing who he is likely to face next year. Republican candidates have been slower to emerge in this cycle than for previous elections. But February should bring the first wave of big-name candidates to the field. Former Minnesota Gov. Tim Pawlenty, Sen. John Thune, R-S.D., and former House Speaker Newt Gingrich all seem on the cusp off announcements. While it may take until April for the field fills out, with just one year until the first primaries, this month will probably see the start of the campaign for 2012 in earnest.
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