Keep a Wary Eye on the Next Fiscal Battles—or Else!

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January 24, 2013; Source: Politico

Are nonprofits prepared to speak up during what Politico calls “the three-step fiscal fight?” As NPQ has reported, the upcoming battles are 1) the sequestration cuts that come due at the end of February, 2) the reauthorization of the Continuing Resolution in late March to avoid a government shutdown (assuming a new budget isn’t passed), and then 3) raising the debt limit, which the Republicans have agreed to postpone until May to give themselves and the White House a little breathing room.

Here are the stakes: President Obama and the Democrats want additional revenue and say they are committed to protecting Social Security, Medicare, and Medicaid. The Republicans want big spending cuts and say they won’t give ground on new revenues after having tolerated a token increase in the tax rates for top income earners. Both sides say they want to minimize the impact of potential budget sequestration on Pentagon spending, and the White House is counting on Republican ties to the defense industry to help sway Republicans to sidestep the sequester. Meanwhile, the silence is nearly deafening on where they stand on discretionary domestic programs, which are also included in potential sequestration cuts, though supporters of the White House, including the Congressional Progressive Caucus, are on record as opposing any cuts in the mandatory entitlement programs.

Politico reports that President Obama’s team wants “a grand bargain of sorts — one that draws savings from entitlements, raises money through the Tax Code, cuts discretionary spending and hikes the debt limit.” But that idea, posed in the December negotiations around the cliff, included tax reform and capping itemized deductions, which White House press secretary Jay Carney said would “eliminate both the sequester and achieve broader deficit reduction for the long term

Republicans have a different objective. Having been classified by detractors and supporters alike as the “stupid party” (the term recently used in a speech by Louisiana Republican Gov. Bobby Jindal) for its ham-handedness in dealing with issues such as taxes and immigration, the Republican Party is desperate to avoid sinking lower in the estimation of the American public. Politico suggests that the sequence of fiscal fights, beginning with the sequester, could include Republicans suggesting scrapping the across-the-board formula in favor of more targeted spending cuts. In our estimation, nonprofits would need to respond rapidly in such a scenario, as it could include a proposal for reduced Pentagon cuts but more cuts to domestic programs.

As if that wasn’t enough, nonprofit should also be concerned that the three-step structure of the fiscal fight could mean that the White House and members of Congress push other legislative issues—such as immigration reform, gun control, and climate change—off of the national agenda. What to do? First, nonprofit must recognize that the negotiations around these issues involve very few people. There is frustration on Capitol Hill that people are elected to the House and Senate only to twiddle their thumbs while the leadership negotiates and then gives them a package to vote yea or nay on with little or no debate or amendments.

That also has to frustrate nonprofit lobbyists. Of course, the big corporate interests have access to that handful of core budget negotiators, but when nonprofits trod the halls of Congress, they are talking to lawmakers and their staff who, no matter what they say, are often sitting on the sidelines. The takeaway is that an inside-the-Beltway/Capitol Hill insider lobbying strategy for nonprofits simply may not work. Can the nonprofit sector muster a grassroots strategy that influences negotiations involving only a small number of party leaders? —Rick Cohen