As New Congress Convenes, Republicans Scale Back Budget Cut Goal

Besides repeal, Republicans will also likely introduce measures to defund health care reform, and, as we've already witnessed, Dodd-Frank, through the lack of funding awarded to the Securities and Exchange Commission (SEC) in the recently passed Senate spending bill.

William Donovan, a partner with the law firm Venable in Washington, said that the SEC and other agencies that were given more duties under Dodd-Frank, were now left "with tough choices" due to lack of funding under the Senate appropriations bill. Donovan doubts Republicans can defund the Consumer Financial Protection Bureau (CFPB). Defunding the operations of the CFPB "is questionable," Donovan says, because under Dodd-Frank, the CFPB gets a portion of the Federal Reserve Board's annual operating expenses.

As for budget cuts, Senate Majority Leader Harry Reid, D-Nev., said in a Jan. 5 Op-Ed piece in Politico, that he's "disturbed at the trend toward extremism" in the GOP, citing recent proposals from Republicans "to eliminate Social Security, roll back important civil rights legislation and eliminate the Department of Education."

Reid also noted his worries about Republicans shutting down the federal government, instead of finding "common-sense solutions" to keeping the government running before the continuing resolution (CR) expires on March 4. "There have already been suggestions from extremist elements in the GOP that instead of working together to find responsible solutions, we should shut down the federal government and allow it, for the first time in history, to default on its existing obligations," Reid wrote in his Op-Ed.

The Center on Budget and Policy Priorities (CBPP) is warning that the "major changes" to House procedural rules unveiled by House Republican leaders in late December and expected to be adopted Wednesday, are "designed to pave the way for more deficit-increasing tax cuts in the next two years." The new rules announced on Dec. 22 dealing with pay-as-you-go and reconciliation "could have a substantial impact and risk making the nation's fiscal problems significantly worse," the CBPP says.

The new House rules "would replace pay-as-you-go with a much weaker, one-sided 'cut-as-you-go' rule, under which increases in mandatory spending would still have to be paid for but tax cuts would not," CBPP says.

In addition, CBPP says, the rules would also "stand the reconciliation process on its head by allowing the House to use reconciliation to push through bills that greatly increase deficits as long as the deficit increases result from tax cuts, while barring the use of reconciliation in the House for legislation that reduces the deficit if that legislation contains a net increase in spending (no matter how small) that is more than offset by revenue-raising provisions."