Congress – The Sky Is Not Falling

Look Up!

Contrary to the headlines, the sky has not yet fallen. Safety tip: it won’t.

Big idea #1

As we began the 118th Congress, there was indeed a colorful selection process for a new speaker. If you were paying attention, it’s a safe bet your neighbors were not.

Pop quiz: How many votes did it take for Congressman McCarthy to be elected as Speaker?

a. 2
b. 15
c. 12
d. 11

Not unlike the person who graduates last in medical school is still called a doctor, it doesn’t matter how many votes it took to elect McCarthy as Speaker.

“Well, he made so many concessions he can’t possibly be an effective Speaker,” some pundits say. In fact, many of the “concessions” made were restorations of procedures that have been in place in the House for decades, and many of which most Americans would find appropriate. For example:

• Agreement to publish bills before they are voted
• Agreement to allow debate of bills and amendments on the floor
• Agreement to allow rank-and-file members to participate in open debate
• Agreement to pass the twelve appropriations bills individually, as opposed to bundling them as various mini-bus or omnibus packages of bills
• Agreement to force regular order of bills voting out of committee before consideration on the House floor

There were other concessions as well that may not be so democratic in nature, such as the idea that one member can force a snap-vote Speaker election.

The Republican party is going through a difficult phase of evolution. All parties must endure such change; some don’t do it well and fade out. Going back to our nation’s founding, there have been multiple parties. Academic research confirms that our present two-party system does not align well with the four to six categories of voters that are now clearly identifiable.

As Speaker, Nancy Pelosi was forced to deal with a diverse membership that ranged from extremely progressive to the Blue Dog Democrats. Those more conservative “Blue Dog” members of the party were driven to near extinction (today, there are seven such). Overall, the evolution is painful to watch, but evidence suggests only a very small sliver of the population is even paying attention.

Big idea #2

Jump to the first issue the new Speaker must wrestle with, the perpetual review of the debt ceiling. It’s, once again, being packaged as do or die. “The nation will default, and we can’t risk our nation’s credit rating and worse,” we are told. Let’s put the debt ceiling in its simplest terms. It’s an argument about how we will pay for things we already approved for purchase. In TheBigTop, my online forum, I wrote back in 2021 the last time we had a debt ceiling debate:

• Debt— You buy a cheeseburger with your credit card.
• Deficit—You bought more cheeseburgers on your credit card than you could pay for this month. The credit card balance is a deficit.
• Debt limit—Congress authorized you to buy a cheeseburger. You bought a cheeseburger and came back to Congress for money to pay for the cheeseburger because your bank account had no cash, and your credit card is maxed. Congress gets upset and says only if we can all agree to raise the debt limit.

Our nation has successfully managed debt for centuries.

Big idea #3

For those in defense, the latest threat is a 10 percent or more reduction in defense spending for FY24. Mind you, we just experienced an unplanned nearly 10 percent increase in defense spending in FY23. Congress was not satisfied with the budget the President provided in FY23, and both chambers agreed to the increase. That’s actually how it is supposed to work.

As a co-equal branch, Congress “controls the purse” and can increase or decrease spending. Think back to the bad old days of 2011 when the “unimaginable” threat of the Budget Control Act, commonly known as sequestration, threatened to rein in spending by decreasing defense spending by $50 billion per year for the years 2011 through 2020. While the sequester was enacted, the full force of those cuts never took hold. What did cause a contraction of the defense industrial base, cited by the Aerospace Industries Association (AIA) as a 20% reduction, was the uncertainty that such public debate caused.

Sitting in the audience of the Reagan National Defense Forum, I listened to a senior executive from Google. The executive pointed out to the defense audience that $50 billion is a lot, but Google had (at the time) $50 billion in cash on hand. It’s all relative.

Will we see a 10 percent reduction in defense spending in FY24? Maybe. If so, will it come via the loss of one large program, a salami slice across the board, death by a thousand cuts, or any other combination of marginal adjustments and changes of assumptions and future forecasts?

Who knows.

My message

To summarize, control what is within your control. Tell your story well. The perpetual budget, legislative, acquisition, and contracting cycles will continue. The winners will continue to win because they know that success requires that you fully participate in the process.

To quote one of my favorite Navy leaders who retired after serving as an admiral, “you don’t have to like the process, but you have to accept that sometimes it just ‘is.’”

So, how’s your FY24 input to Congress coming along? Would you like me to review your white paper? Don’t have one? That’s on you.