Economic Outlook: Cuts that count

To measure the trepidation in Washington, consider a bill that will fund the government for less than a month.

Members of the House and Senate are in discussions about such a bill, The Washington Post reported Friday. Not exactly the equivalent of a payday loan, the government is simply looking for an extension to avoid making tough decisions in an era of dropping revenues and increasing mandates.

That means Tea Party members are suddenly wondering how long they will keep their jobs if they slash funds from local groups who put them in office. In effect, "This is not campaigning, this is governing," said newly elected Rep. Frank Guinta, R-N.H., who has stood up for budget cuts that will affect his constituents.

Besides kissing babies, what is more fundamental to being a politician than showing up for a photo opportunity during a re-election campaign with an oversize check that is handed to the director of the Happyland Swing Voters Day Care Center?

Guinta said that ship has sailed.

"Being a member of Congress today shouldn't be about bringing money back to your community or your state or your district," he said during his campaign.

At risk is $61 billion trimmed from the budget by one-term -- make that headstrong -- Republicans in the House. The Senate, controlled by Democrats, is likely to restore many of the cuts, which will give House Republicans the upper road, free of charge. They will be able to say, "We tried," without having to pay for it.

On the state level, Gov. Scott Walker is being outfitted with a set of horns for taking a shot at union workers, above and beyond fiscal austerity, by attempting to strip them, temporarily, of most of their collective bargaining rights. President Barack Obama weighed in on this, calling Walker's maneuver an "assault" on unions. Maryland Gov. Martin O'Malley said Walker is on the front line of an "ideological drive to go after unions, to destroy the unions."

Paradoxically, this is what happens when leaders choose to make the tough calls. In California, Gov. Jerry Brown, confronting a $25 billion budget gap, has proposed a referendum in June to raise taxes temporarily by $12.5 billion. The approach, called "crafty" by Joe Mathews, co-author of a book on California's fiscal mess, allows the governor to say he tried. If the vote fails, however, Brown will pick up the scalpel and point to the voters and say, "They made me do it."

In international markets Friday, the Nikkei 225 index in Japan added 0.71 percent while the Shanghai composite index in China was flat, losing less than 0.01 percent. The Hang Seng index in Hong Kong rose 1.82 percent while the Sensex in India gained 0.39 percent.

In Australia, the S&P/ASX 200 index added 0.57 percent.

In midday trading in Europe, the FTSE 100 index in Britain gained 0.88 percent while the DAX 30 index in Germany rose 0.47 percent. The CAC 40 index in France rose 1.24 percent while the Stoxx Europe 600 gained 0.94 percent.