Federal Relations

May 2, 2011

Congress Back to Work this Week

Congress returns from its two-week recess this week, looking ahead at the need to raise the nation’s statutory debt limit within the next two months and associated efforts to cut federal spending or establish new budgetary controls. Lawmakers have about two months to increase the debt limit, according to the Treasury Department. Although leaders of both parties have said the debt ceiling must be raised and that some mechanism is needed to limit future deficits, there is no consensus on any of the crucial details. Two sets of bipartisan talks are under way or soon to begin, but it remains unclear what kind of deficit reduction plan can satisfy both liberal lawmakers concerned about maintaining costly government services and conservatives who demand spending reductions and prefer to rule out revenue increases. Various ideas to restrict spending, limit debt levels or increase revenue have been floated. Among the ideas on the table are a constitutional amendment requiring a balanced budget; caps on spending or deficits; specific spending cuts; and tax increases.

While the debt limit dominates the political discussion in Washington, there are other issues that Republican and Democratic leaders want to pursue on the House and Senate floors. The House will turn its attention this week to proposals to increase domestic oil and gas production and will consider curbs on the executive branch’s regulatory powers under the health care overhaul signed into law last year. The Senate’s agenda could include wrapping up work on a small-business research bill, although that measure may be shelved as a result of disputes over amendments unrelated to the bill’s provisions. The Senate may also try to vote on ending some tax breaks for oil and gas companies and the confirmation of outstanding judicial nominees.

While seeking a way forward on the debt limit and deficit reduction, lawmakers may also be jousting over the related issue of the FY12 budget resolution. In the next few weeks, the Senate Democrats will likely bring up a pair of “test votes” on Republican and Democratic budget proposals. The first may be the GOP budget resolution adopted by the House just before the recess. Democrats oppose the measure because it proposes to reduce future debt and deficits by deep spending cuts alone, including by turning Medicaid into a block grant to states and transforming Medicare into more of a voucher program where subsidies are provided to buy private insurance. The Senate Republicans will try to force a vote on the President’s FY12 budget request to demonstrate that there is little support for the President’s funding priorities – even within his own party. The test votes would be similar to the ones held earlier this year to show that neither GOP nor Democratic spending plans for fiscal 2011 had sufficient support to pass, which helped prompt further efforts to find some middle ground.

Meanwhile, the Senate has yet to put forward their own version of the FY12 budget resolution, which would set the stage for Senate Appropriators to begin drafting their spending bills.