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Category: Budget

Debt Ceiling Plan Alludes House GOP

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The U.S. government is 12 calendar days – or 7 scheduled congressional work days – from reaching the debt limit without a clear plan of what to do. GOP leaders are so far refusing to advance a ‘clean’ debt ceiling bill that both President Obama and Democrats would support. The problem there is that the GOP leadership can’t find the 30 Republican votes they would need to join with all 188 Democrats to pass such a proposal.

One option under discussion is a proposal from the conservative Republican Study Committee, which would require House committees to produce legislation to enact spending cuts contained in the budget resolution – basically a series of cuts to equal the amount raised for the debt ceiling. This type of measure is unlikely to get a vote and even if it did, the President and Senate Democrats would block its passage. They are insisting on a ‘clean’ debt ceiling increase or suspension.

Treasury Secretary Jacob Lew has estimated that he would exhaust “extraordinary measures” to extend the government’s borrowing authority by November 3, 2015.

Read more from Politico here.

New Debt Limit Deadline: November 5th

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Congress will need to address the debt limit by November 5th or risk a default on the nation’s debt. The deadline is the first the Obama administration has set for raising the $18.1 trillion debt limit, and comes in somewhat earlier than what most experts had predicted. The federal government reached its borrowing limit in March and has since been deploying “extraordinary measures” to free up room beneath that limit.

That new deadline has major implications for House Majority Leader Kevin McCarthy (R-CA), likely the next Speaker of the House (elections will take place October 8th to replace current Speaker John Boehner, who is retiring at the end of October). Congress will need to figure out how to increase the nation’s borrowing limit, prevent a government shutdown, and keep money flowing to highway projects – all in a 30 to 60 day period. And all three will fall on a House Republican Conference in flux, with a new speaker, majority leader, and majority whip expected to be elected next week but not take over until November.

The administration has repeatedly said it will not negotiate raising the debt limit, but congressional Republicans in the past have pressed for spending cuts in exchange for raising the debt ceiling. Prior to the deadline, there had been talk of tying the debt limit to budget talks. But the month-long gap between the debt-limit deadline (November 5th) and expiration of government funding (December 11th) complicates matters.

Welcome to the New Fiscal Year!

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With the passage of a continuing resolution late last night, the federal government is open for business on this first day of FY2016! The threat of shutdown diminished greatly last Friday when House Speaker John Boehner (R-OH) announced his retirement effective October 30, 2015.

The CR will fund federal through December 11 and includes $1.017 trillion in annualized spending, which is roughly equal to the FY2015 level (most programs would be funded under the CR at a rate 0.21 percent lower than enacted FY2015 levels). The CR would continue to fund Planned Parenthood and also provide $700 million in emergency dollars to fight Western wildfires. It would also renew expiring authorizations for the E-Verify program and the so-called Internet Tax Freedom Act (PL 105-277).

So, what happens between now and December 11? There are many possible outcomes for FY2016 appropriations. In the best case scenario, Congress could effectively negotiate a budget deal – similar to the 2013 Murray-Ryan deal – which would lift the budget caps for both defense and non-defense discretionary spending and remove the ongoing threat of sequester. This would pave the way for advancing spending bills (or an omnibus bill) before the December 11th deadline. If a budget deal is slow to materialize, then we could see another short term CR to give Congress more time to negotiate this deal. If budget negotiations fail, we could see the threat of shutdown reemerge or Congress could agree to a yearlong CR at FY2015 levels.

Early signs indicate that a budget deal is possible. Senate Majority Leader Mitch McConnell (R-KY) has already initiated preliminary discussions with President Obama and Speaker Boehner on a possible deal. Additionally, Democratic staff said this week that they are already beginning to set new topline numbers and identify possible offsets.

The Office of Federal Relations will continue to monitor and report on progress.

Senate Advances Clean CR

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On Monday, the Senate took the first step toward approving a continuing resolution (CR) to fund federal government through December 11, 2015. They will take a final vote on the measure on Wednesday – the last day of the current fiscal year – and then send it to the House for consideration at before current budget authority expires Wednesday night at midnight.

Senators voted 77-19 in favor of limiting debate on an amendment containing the text of the so-called “clean” CR (HR 7190. The CR would fund federal agencies for 90 days and keep federal dollars for Planned Parenthood in place despite opposition from conservatives.

The House must pass the stopgap before the end of the day Wednesday in order to avert a shutdown and appears on track to do so with relatively little drama. Legislative obstacles in the chamber seemingly evaporated after Speaker John Boehner (R-OH) announced his retirement Friday.

The stopgap provides funding for federal agencies at an annualized rate of $1.017 trillion, which is roughly flat compared to current funding levels. The CR notably includes $700 million in emergency funding to suppress Western wildfires, flat funding for the non-capped war account, and a reauthorization of the E-Verify program and the Internet Tax Freedom Act.

The Obama administration said in a Statement of Administration Policy issued Monday night that it would support the CR.

Move to Defund Planned Parenthood Fails in Senate

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Senate Democrats and a eight Republicans blocked a proposal that a constituted a continuing resolution that would run through December 11 and prohibit for one year federal funding for Planned Parenthood or its affiliates unless they certify that they will not perform or fund abortions during that period. The Senate rejected, 47-52, the motion to invoke cloture on the substitute amendment to the joint resolution. The measure failed to even win a simple majority vote.

Sixty votes were needed to advance the measure. Republican senators voting with Democrats included Senators Kelly Ayotte (R-NH), Susan Collins (R-ME), Tom Cotton (R-AR), Dean Heller (R-NV), Mark Kirk (R-IL), Lisa Murkowski (R-AK), Rand Paul (R-KY), and Ben Sasse (R-NE).

Following the failure, Senate Majority Leader Mitch McConnell moved to set up a vote on a clean spending bill that would avert a government shutdown on Oct. 1, although House Speaker John Boehner still has not said whether his chamber will take up the Senate legislation.

The Senate is expected to take a cloture vote in relation to a “clean” continuing resolution on Monday, September 28th, two days before the government’s funding authority expires.