August 2, 2011
Debt Deal Done!
The House approved the deficit reduction bill last night by a vote of 269-161; 95 Democrats and 66 Republicans voted against the measure. Congressmen Adam Smith and Jim McDermott voted no, while the remaining members of our delegation voted in favor of the bill. The Senate is expected to clear deficit reduction legislation at noon today. And while it is not on the President’s schedule for today, he is largely expected to sign the bill before the close of business. With his signature, a six-month-long battle over raising the debt ceiling ends but the next round begins with future fights over spending, taxes, and entitlement programs.
With that vote, the House went into recess last night and is not expected back in DC until after Labor Day. The Senate will join their House colleagues once they conclude their vote.
As I reported yesterday, the legislation would cap discretionary spending for FY12 and FY13, effectively freezing it at current levels and only adjusting it to match historical levels of inflation (2.2 percent) through 2021. It would also create a joint congressional committee tasked with finding between $1.2 trillion and $1.5 trillion in new savings, and sending a proposal to the House and Senate floor for guaranteed votes by December 23rd. If those savings are not enacted, sweeping automatic budget cuts would be triggered.
Democrats are hopeful that the debt limit deal might generate more spending for domestic programs, while Republicans are concerned about cuts in defense. The allocations would reverse cuts set in April by the House Republicans’ budget target, which would have lopped $30 billion from discretionary spending compared with FY11. The Labor-HHS-Education and Transportation-HUD bills had been set to include the majority of those cuts and have yet to be unveiled in the House. The extra funds could ease the path of those bills when they are marked up in September. With an allocation to work from, Senate appropriators also hope to begin moving bills, which are almost certain to differ from their House-passed counterparts.