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Sep 27 2011

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For Congress, It’s Just a Crisis Postponed

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There Has to Be a Better Way...

The denizens of the “world’s greatest deliberative body” came to agreement last night on a plan to avoid a government shutdown.

For Americans worn out by budget brinkmanship that brought us to the edge of a government shutdown in April, and later, a game of high stakes chicken on the nation’s debt ceiling in August, the Senate deal is a cause for relief.

But the path to an agreement was anything but pretty.  In the end, the temporary deal was more luck than leadership, and that has repercussions for the nation as we look at the legislative calendar for the rest of the year.

The unexpected crisis began last week when House Republicans insisted on offsetting cuts in spending for every additional dollar in Federal Emergency Management Agency (FEMA) spending above the threshold agreed to in the August debt ceiling agreement, as part of a bill to temporarily fund the government until November 18th.

FEMA has been operating at a feverish pace this year with multiple national disasters to cope with, requiring additional funding.

The House bill approved $3.65 billion for FEMA, but as this was more than the figure agreed to in August, Republicans cut $1.5 billion from the President’s electric car initiative to offset the additional spending.

The bill was “dead on arrival” in the Senate, where Democrats argued that cuts to the electric car program would cost jobs.

With the capital in gridlock, FEMA was due to run out of money by Weds. In addition, without additional spending authority, the federal government would need to close on Friday.

All over $1.5 billion.

To put that in context, consider that US spends about $800 million per day. Thus, Congress was willing to shut down the entire federal government over an amount of money that the nation spends in a weekend.

Simply ridiculous.

Indeed the direct and indirect costs of a shutdown would dwarf the cuts at issue almost immediately, making the whole proposition preposterous.

Salvation from this predicament came in the form of luck.

FEMA officials, contradicting previous estimates, indicated that they could stretch their internal budgets until Friday, the end of the fiscal year. That, in turn, meant that the Congress would not have to appropriate as much money as originally thought.

In a quick discussion between House and Senate leaders, a deal was hatched to provide $2.65 billion for FEMA.  Since this was the ceiling for funding in the debt ceiling talks, there would be no need for offsetting spending cuts.

Republicans could say that they maintained fiscal discipline.  Democrats could say that they protected green jobs.

The Senate voted 79-12 to support the compromise.

In a two-step, the House will vote in pro-forma session to keep the government open until Tuesday, when its Members return from recess and will vote on the formal extension.

But having avoided disaster, what has anyone really won here?

A budget gimmick allowed for a compromise, but surely FEMA will need more money than has been appropriated.  The original Senate bill,  supported by almost a dozen Republicans, had $7 billion in FEMA funding.

Disaster relief has very strong, bipartisan support.

Indeed, the Continuing Resolution (CR) only provides funding through November 18th.  If all 12 appropriations bills haven’t been approved and sent to the President, another CR will be necessary, re-opening the fight yet again.

And that fight will bump up against the more consequential issue of the Super Committee and its mission to provide Congress with a blueprint for $1.5 trillion in deficit reduction over the next decade.

The Committee is scheduled to vote on its recommendations by November 23rd.  Congress is to take up that legislation before December 23rd. Without action, or if the plan is voted down, painful across the board spending cuts will kick in for FY 2013.

So this week’s budget fight was more than just an irritating and exhausting distraction. It was a harbinger.

If Congress is willing to shut down the government over a truly minor spending disagreement, how can it to be trusted to act responsibly on the far more significant budget issues ahead?

Confidence is another commodity in short supply.

 

1 comment

  1. Andrea

    It will be rare to find advised individuals on that matter, you sound like you understand what you are writing on! Bless you

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