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The Next Hostage Crises: 2012 Appropriations, Federal Gas Tax

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Gas Pump by nannetteturner

John Boehner says that he got 98% of what he wanted out of the debt limit fight. The only thing I can conceivably think of that he didn’t get was an additional hostage-taking situation over the debt limit. But those are in great supply in Washington.

First, Boehner and the GOP can use the impending trigger as leverage to get a deal tilted to their interests on the Catfood Commission II. But there are several more events even before that. First you have the FY2012 appropriations at the end of September. As I keep saying, the spending caps put in place in the debt limit deal are a ceiling, not a floor. So Republicans could call for near-term cuts below those levels – and point to bad economic performance as proof, since spending cuts fix the economy, as we’re all told incessantly now by members of both parties. In addition, there are the policy riders, which were the subject of much consternation during the 2011 appropriations fight in March and April. The threat of a government shutdown would loom over this debate, and social policies, riders to gut the EPA, the Affordable Care Act, etc., are likely to be on the table.

But there’s another deadline on September 30, to extend the gas tax:

And with most of the 18.4-cent tax per gallon of gasoline set to expire Sept. 30, renewing the tax could be the next political controversy to spark a brawl in an ever more deeply divided Capitol Hill.

Congress has already come to the brink of a government shutdown and is only now wrapping up an eleventh-hour compromise to save the country from a first-ever default. A legislative dispute has even temporarily shuttered the Federal Aviation Administration. With the level of partisan vitriol and anti-spending sentiment at an all-time high, some advocates are worried that the nation’s highway fund will be the next victim — while some conservatives sense an opportunity.

“The White House is going to make a move to renew it. We’ll see — but there will be Republicans who will be resistant to that.” said Doug Heye, former spokesman for the Republican National Committee.

Gas prices, said Heye, are “really affecting families. If you have to drive 20 miles to work every day, those are real costs.”

The gas tax funds infrastructure spending, and there is no better economic stimulus than that. So taking the gas tax away would wreak absolute havoc on the ability for highway and road spending to be funded. The anti-tax activists will have a field day with this one.

The debt limit deal set a precedent, if it wasn’t there already, that conservatives can bring the economy to the brink of a meltdown, secure in the knowledge that the opposition will surrender and take a dive, if not (more precisely) openly collaborate, nominally protecting the economy from that meltdown but also achieving major, long-sought victories on economic policy. There’s no reason to think that this precedent, now set in stone, won’t happen again and again and again as long as the same leaders are doing business in Washington. As Joe Nocera writes, Republicans will put on their suicide vests soon enough.

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David Dayen

David Dayen