Dash toward fiscal cliff defies Capitol Hill's Schoolhouse Rock image

Closed-door negotiations stand in stark contrast to 'regular order'

Dec 30, 2012 @ 8:01 pm

By Mark Schoeff Jr.

+ Zoom

The Senate worked all weekend on proposals to avert the so-called fiscal cliff only to come closer than ever to the precipice by Sunday night.

Lawmakers went home around 6 p.m. without agreeing on how to address the nearly $600 billion in tax hikes and spending cuts set to go into effect on Jan. 1. That means that the legislative “process” set in motion a couple days ago is teetering on the brink of failure.

The fiscal-cliff exercise stands in stark contrast to what's called “regular order” on Capitol Hill. That's the Schoolhouse Rock version of how a bill is supposed to become a law.

You know how it works: A bill is introduced and referred to the appropriate committee. There's a hearing and then a committee vote, or markup. If approved by the committee, the measure goes to the Senate or House floor for a vote by all members of the chamber.

If it's approved by the Senate or the House, it then goes across Capitol Hill for consideration by the other body. If an identical bill is approved by both houses, it goes to the president to be signed into law – or vetoed.

That entire process is now being scaled down to less than 24 hours – minus the hearings and any kind of thoughtful deliberation. Instead, everything depends on negotiations between Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky.

Whatever the Senate comes up with will have to be approved by the House in mere hours – probably on Monday night.

It's difficult to know how the talks are proceeding. You have to wait for pronouncements from the Senate floor by the protagonists.

The other option is to try to catch individual senators as they emerge from party caucuses.

Journalists mill around in the hallways surrounding the Senate floor on the second floor of the Capitol. We gather in the vicinity of the Ohio Clock. Near that landmark is an area called “the sticks” – for the television cameras that are set up there on tripods.

If Senate leaders have a breakthrough to report, they go to “the sticks” and conduct an impromptu press conference. On Sunday, it was more of a free-for-all.

When lawmakers traveled down way down the hall from their respective caucuses, they were engulfed by reporters – like sharks surrounded by pilot fish hoping to gobble up food scraps that fall from their mouths. By the way, I use the term “shark” to illustrate the feeding frenzy, not as an adjective to modify the lawmakers. The vast majority of senators with whom I've had contact are terrific people.

The problem with the press scrums, which can be four- or five-people deep when they're attached to a bigger fish, is that you're only getting bits and pieces of the story.

For instance, Sen. John McCain, R-Ariz., told a scrum that Republicans would drop their insistence on a provision in a fiscal-cliff agreement that would change how inflation increases are calculated for entitlement payments. It's known as “chained CPI [Consumer Price Index].” A chained CPI slows down spending on social insurance programs.

Mr. McCain asserted that Republicans “can't win a [public relations] battle” when it comes to benefits for seniors versus tax breaks for the wealthy.

Shortly after Mr. McCain swam through, along comes his Arizona partner, Republican Sen. Jon Kyl. Mr. Kyl pointed out that President Barack Obama endorsed chained CPI during an appearance on NBC's Meet the Press on Sunday. He also said that some kind of deficit reduction has to be in the fiscal-cliff package to keep House Republicans on board.

So who is representing the stance of most Republicans? Probably Mr. McCain, based on similar comments that some of his colleagues made during their scrums. But Mr. Kyl certainly speaks for many conservatives. There's no way to know for sure who's correct, when you're bouncing from scrum to scrum.

A hint about the investment-tax proposals in the negotiations came from Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee. He criticized the Republican offer on estate taxes. He didn't give details, but it's likely that Republicans want to keep it at or near the current 35% rate with a $5 million individual exemption.

“That's really not a reasonable thing,” Mr. Conrad told a scrum. “What we need is everybody to pull together and give up a little something to get back on track. What this is proposing is giving those who are the most comfortable among us more help.”

Will the estate tax proposal, whatever it says, survive the negotiations? Who knows? We'll have to wait and see when Mr. Reid goes to “the sticks.”

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Oct 17

Conference

Best Practices Workshop

For the fifth year, InvestmentNews will host the Best Practices Workshop & Awards, bringing together the industry’s top-performing and most influential firms in one room for a full-day. This exclusive workshop and awards program for the... Learn more

Featured video

INTV

Stephanie Bogan: What's really holding advisers back from achieving their goals

The only thing holding financial advisers back from accomplishing what they want is the assumptions they're making, according to Stephanie Bogan, founder of Educe Inc.

Latest news & opinion

Will Jeffrey Gundlach's Trump-like approach on Twitter work in financial services?

The DoubleLine CEO's attacks on Wall Street Journal reporters is igniting a discussion on what's fair game on social media.

Fidelity wins arb case against wine mogul but earns a rebuke from Finra

In the case of investor Peter Deutsch, Fidelity doesn't have to pay any compensation, but regulator said firm put its interests ahead of his.

Plaintiffs win in Tibble vs. Edison 401(k) fee case

After a decade of activity around the lawsuit, including a hearing before the U.S. Supreme Court, judge rules a prudent fiduciary would have invested in institutional shares.

Advisers get more breathing room to make Form ADV changes

RIAs can enter '0' in some new parts of the document before their annual filing next year.

Since banking scandal, Wells Fargo advisers with more than $19.2 billion leave firm

Despite a trying year, the firm has said it will sweeten signing bonuses for veteran advisers.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print