Five Days to Shutdown

Posted on September 26, 2011October 17, 2012

With just five days until the end of the current federal fiscal year, congressional leaders continue to work to resolve an impasse over how to pay for disaster aid that threatens to shut down the government on Friday at midnight.

There appears to be bipartisan support for a continuing resolution (CR) that would allow the government to keep operating through November 18^th at a rate that reflects the $1.043 trillion annual limit set by the debt limit law (PL 112-25) enacted in August. Disaster aid funding appears to be the main stumbling block. While no one questions the need for the assistance in the wake of a string of natural disasters this year, there is much disagreement over how to pay for this aid. Democrats believe it is unfair to call for the emergency aid to be offset, something they say has not been done before, while Republicans say offsets are needed to keep federal spending constrained so that is doesn’t contribute to the federal deficit.

The Senate is scheduled for a procedural vote tonight at 5:30pm on an amendment, proposed by Majority Leader Reid (D-NV), to the House-passed CR that would remove the spending offsets for the bill’s recovery aid. It would require 60 votes to pass and would also require the House to agree to the changes before it could be sent to the President for signature. However, Senate Democrats may not have the 60 votes required to overcome a filibuster. If the Senate does not accept the House-passed CR that would keep the government operating when FY12 starts on Saturday (October 1^st) or if the Senate does not come to an agreement to change the measure that might win unanimous consent in the House, the issue probably cannot be resolved before Tuesday at the earliest. With both chambers scheduled to be in recess this week to observe the Jewish holiday Rosh Hashanah (beginning at sundown on Wednesday), congressional leaders have limited time to come to a resolution to avoid a government shutdown.

Sources: Congressional Quarterly, Politico

Fate of CR Uncertain

Posted on September 23, 2011October 17, 2012

Late last night (or early morning, if you want to be more accurate), the House approved a continuing resolution (CR) to keep federal government running past September 30^th but the bill faces challenges in the Senate this morning. Even before passage of the House bill, Senate Majority Leader Reid (D-NV) warned his caucus would block approval in the Senate and instead take the debate into next week when lawmakers had hoped to be on recess for the Jewish New Year, Rosh Hashanah.

Running through November 18th, the House CR keeps faith with the August budget accords, imposing a 1.5 percent across-the-board cut on domestic and defense agencies alike to meet the target of $1.043 trillion for FY12. But the level of disaster aid, $3.65 billion over the next 13 months, is less than half of what the Senate wants and Republicans have insisted on about $1.6 billion in offsets targeted at Democratic priorities. The House bill would take $1.5 billion from an advanced technology manufacturing program for the auto industry to pay for a portion of disaster relief. Additionally, a new $100 million cut was added to the bill late Thursday, rescinding unobligated money in an alternative energy loan fund that helped finance Solyndra LLC, the controversial solar panel manufacturer in California that has filed for bankruptcy protection.

The Senate is poised to reject the House-passed CR this morning, leaving congressional leaders scrambling for a deal to avert a government shutdown at the end of next week. It is predicted that the Senate will amend the House bill and then pass the package to eliminate $1.5 billion in offsets. This will certainly anger House Republicans and almost guarantees that passage of any CR won’t happen today. Yesterday, Senate leadership released a statement saying they are ready to stay in Washington next week to “do the work the American people expect us to do and I hope the House Republican leadership will do the same.”

If the House had removed the offsets instead of adding to them in the second CR attempt, Democrats say that would have paved the way for Democratic votes in both chambers to approve the measure.

House Republicans and Senate Democrats have been at odds for more than a week over whether any of the disaster aid should be offset. The House-passed bill (HR 2608) was largely unchanged from a measure defeated Wednesday in the House by a unified Democratic party and four dozen conservatives seeking to hold the line on spending. The only major change was the addition of a new $100 million offset rescinding money for the loan program that supported the defunct solar panel maker Solyndra. House GOP conservatives, who opposed the initial version, said they switched their votes after becoming convinced by party leaders that there was no better option.

The fun will continue this morning in the Senate. Stay tuned for more…

CR Defeated in House

Posted on September 22, 2011October 17, 2012

Yesterday, the House of Representatives failed to approve a continuing resolution (CR) that would fund federal government beyond September 30^th – the end of the federal fiscal year. That CR would have extended funding at current levels through November 18^th.

Two issues caused the defeat of the bill. First, the failed CR would have set the total annual spending level for the first seven weeks of FY12 at an annualized rate of $1.043 trillion, in accordance with the debt limit law approved in early August. This is higher than the $1.019 trillion budget that the House adopted in April, which caused concerns for many House Republicans who want to see greater reductions in government spending. The second contentious issue has to do with how to pay for disaster funding for states hit hard by Hurricane Irene and tornados. The House bill would have provided $1 billion in FY11 money for the nation’s Disaster Relief Fund, offsetting that amount with a $1.5 billion cut in an energy-efficient auto program. The CR also would have provided $2.65 billion in FY12 disaster spending. Senate Democrats prefer a measure sponsored by Majority Leader Reid (D-NV) that would provide $500 million in FY11 disaster aid, without offsets, and $6.9 billion for FY12. Disaster funding legislation has traditionally been approved without offsets.

With both chambers set for recess next week, a deal must be struck quickly to avoid a government shutdown when the new fiscal year begins October 1^st. Late last night, the House Rules Committee approved a same-day measure that could allow the House to consider a revised version of the CR as soon as this afternoon. There is some speculation that House leaders will pare spending levels CR as a way to attract additional support from conservative lawmakers. However, Senate Democrats have taken a tough stand on that issue and say they will not agree to any CR that would alter spending levels set in the August debt agreement.

We should learn more as the day goes on.

CR Action This Week

Posted on September 19, 2011October 17, 2012

Congress is expected to approve a continuing resolution (CR) this week to keep government operating past the September 30^th end of the federal fiscal year. The House will take action on the bill early this week, which would provide funding for government programs through November 18^th. The bill would set the discretionary funding at 1.5 percent below current levels as called for in the August debt agreement (PL 122-25). The extra seven weeks could allow Congress time to pass some stand-alone FY12 spending measures but it is more likely that appropriators will use the extra time to assemble an omnibus spending agreement that would contain most, if not all, FY12 spending bills, and could move to the floors before Thanksgiving.

The bill contains $3.65 billion in disaster relief funding, including $1 billion in immediate aid for FY11, which would be offset by cutting $1.5 billion from the Energy Department’s Advanced Technology Vehicles Manufacturing Loan Program. Democrats in both chambers have expressed concerns about the offset and argued that disaster relief in the past has not been paid for with cuts from other programs. Instead, Senate Democrats want the House to consider their measure (H J Res 66), which would provide $6.9 billion for disaster aid without offsets. It was passed by the Senate, 62-37, last week. Senate Democrats may move to strip the offset from the House bill when it reaches the Senate, but in the meantime are touting their “bipartisan” plan, which funds the administration’s disaster relief request for this year and next. Both chambers will need to work out a deal by the end of the week if they want to proceed with their planned weeklong recess period next week.

In other appropriations news, the Senate Appropriations Labor-HHS-Education Subcommittee is scheduled to consider its annual spending bill on Tuesday, which is expected to be slightly below FY11 spending levels. NIH may be safe from cuts in the Senate as committee members have expressed that NIH funding is important for economic growth.

Also on Tuesday, the Senate Transportation-HUD Subcommittee is prepared to take action on their FY12 bill, which is anticipated to be in line with the House proposal for just over $55 billion. The House bill, approved by subcommittee on September 8^th, would provide $55.15 billion in discretionary spending for the Transportation Department, Department of Housing and Urban Development (HUD), and related agencies. The priorities set in the measures, however, are likely to vary. The House bill does not include funding for high-speed rail or intercity passenger rail service and would cut funding for HUD by $3 billion — about 7 percent below current levels.

To date, Senate appropriators have approved eight of the 12 annual spending bills, but only one, the Military Construction-VA bill (HR 2055), has passed in the full Senate. House appropriators have completed work on nine of their 12 bills and six have passed in the full House. Congress has yet to clear any FY12 spending bills for the President’s signature.

President Obama’s American Jobs Act Would Carry Slight Impact for UW

Posted on September 15, 2011October 17, 2012

The American Jobs Act introduced by President Obama last week and delivered to congress in full bill form this week, looks like it may carry some tax implications for UW.

If passed, the bill would expand and extend the existing payroll tax reduction for employees from the already reduced rate of 4.2% to 3.1%.
Would reduce the payroll tax cut for employers to 3.1% – half of what it is now – for the first $5 Million of payroll. This applies to institutions of higher education, but is designed to primarily benefit small businesses – it will have a minimal impact on UW.
A couple of tax credits for hiring veterans and long-term unemployed workers may carry a small financial benefit for UW.
$30 billion for state aid, which would not apply to institutions of higher education, but the provision does contain a Maintenance of Effort provision designed to protect higher ed funding at the state level.

Portions of the bill have already drawn opposition from both parties, and it is unlikely that it will pass completely in its current form. We are more likely to see the tax credits enacted, while the state aid will be more contentious.