Fiscal Deadlines Loom, Dominates Congressional Agenda

September 25, 2013

pic-money-tax-budgetOn Friday, Sept. 20, 2013, the House passed a short-term spending plan that would continue funding government operations through mid-December and withhold funding from the Patient Protection and Affordable Care Act (PPACA). The legislation was approved on a party line  vote, 230-189, with only 1 Republican voting against it and 2 Democrats supporting it.

The legislation (H.J.Res. 59) would fund federal agencies at an annualized rate of more than $986 billion, the same level as for fiscal year (FY) 2013, but would also leave in place another round of automatic spending cuts known as sequestration, set to take effect in January 2014. It would include language to prohibit any funding going to implementing the health-care law and, additionally, authorize the Treasury to pay some bills and not others in the event that no deal is reached in October on increasing the debt limit. Congress must pass a new short-term budget agreement by Sept. 30 or risk shutting down the federal government.

The stopgap funding measure has now been sent to the Senate where Democratic leadership has already vowed to strip the health-care provisions from the bill and send it back to the House. Senate Appropriations Chairwoman Barbara Mikulski (D-Md.) said she would advance a straightforward spending bill this week at current levels, and the White House supports her approach, arguing a short-term continuing resolution at current funding levels would buy time for negotiators to strike a longer-term spending agreement.

Senate Majority Leader Harry Reid (D-Nev.) filed cloture on Monday to proceed to the House bill, a procedural move to limit debate that requires 60 votes and is scheduled for Wednesday. This is the first step in removing the defunding heath care law provision, with a final vote later this week, returning it to the House just before Sunday’s deadline. Senator Ted Cruz (R-Texas) has been leading the charge against the health care law, and has been urging his colleagues to oppose cloture on the bill. It still remains unclear exactly how – or whether – lawmakers will be able to resolve the impasse before the current-law funding agreement expires on Sept. 30.

Meanwhile, House Republican leaders are drafting a debt limit bill that will likely be unveiled as early as Thursday and would remove the ceiling on federal borrowing authority beyond the 2014 elections. It would also delay implementation of the 2010 health care law for a year, cut mandatory spending, provide instructions for a tax overhaul and promote deregulation and energy development.

Instead of additional cuts in discretionary spending, the plan would achieve savings through reforms in mandatory spending on health care and other areas. It is undetermined how much the bill would cut spending or reduce the deficit.

Treasury Secretary Jack Lew warned Congress late last month that the extraordinary measures he has been using to prevent the debt ceiling from being breached will be exhausted in mid-October. President Obama wants a clean debt limit increase before it expires and has ruled out negotiating over an increase in borrowing authority.

Despite the House plan being full of provisions both the administration and congressional Democrats oppose, the legislation could be voted on before the end of the month.