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Category: Budget

Shut Down Likely

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At midnight tonight, the Continuing Resolution passed in December 2017 will expire. Presently, it does not look like Congress will be able to agree on a short or long term funding solution, and a shutdown is highly likely.

Agencies are circulating memos advising staff how to proceed in the high likelihood there is a shutdown and nonessential federal employees will be furloughed without pay.

OMB has just released a memorandum – Planning for Agency Operations during a Potential Lapse in Appropriations – that includes FAQs regarding grants and contracts (Section II, pages 3-9).

The University of Washington leadership has developed information as to impacts of a shutdown, which will occur in three major areas: research funding, student aid, and Medicare and Medicaid payments. Those impacts can be found here. 

If the federal government does shut down, significant impacts will not be immediately felt by the UW community. Initial impacts will be felt by those in the research community needing to communicate with the federal enterprise such as researchers needing engagement or approval from program managers or researchers applying for grants.  Impacts will be magnified if a shut down is prolonged and goes for multiple weeks.

The University does a plan in place to have adequate cash on hand from existing accounts to cover anticipated expenditures in the event of delayed federal reimbursement. We estimate that we could go at least one month, possibly more, before layoffs or contract suspensions would be initiated.

To follow developments on budget negotiations minute to minute, the Washington Post is counting down the time to midnight.

The Federal Relations team is continuing to monitor the situation and will continue to provide updates.

Shutdown Averted… For Now

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Both chambers of Congress cleared yesterday another short-term spending package that would keep the government funded through December 22.  The old spending agreement ends at midnight Saturday.

Although the government remains funded for another two weeks, there still is no agreement on many of the unresolved issues that will need to be addressed before a final package for FY2018 can be adopted.  These include questions about whether to break the budget caps, and if so, how much and for which sets of programs.  Questions also remain on whether or how to address the DACA/”Dreamers” situation, which must be dealt with by March.

It appears at this point that another short-term extension will be needed beyond the 22nd.

This Week: CHIP and Taxes

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The House and Senate are back this today for what will be the long slog until Thanksgiving. There’s a ton of to-do items on the agenda, including tax reform, raising the debt ceiling, FY 2018 appropriations, the annual National Defense Authorization Act (NDAA), and the list goes on. The focus for the House this week will be extending the Children’s Health Insurance Program (CHIP), while the Senate will continue on more judicial nominations. Both Houses will begin to turn efforts into tax reform.

The House is set to unveil their version of a tax reform bill on November 1 and a mark up in committee shortly thereafter.  Tentatively, this means, the House could consider the measure on the Floor during the week of the November 6. After passage, the measure would move to the Senate the week of November 13 for mark-ups in the Senate Finance and Energy and Natural Resources Committees and floor consideration during the week of the 20, which is Thanksgiving Recess. Per the agreed expedited process, the tax measure would be considered as a reconciliation bill, so it would only get 20 hours of debate and a vote-a-rama — it could be considered in three days.  While this schedule is incredibly ambitious, this framework is the working schedule as of now.

The House— one month after funding for the CHIP has lapsed — is gearing up for a vote on extending funding for the federal program, which insures nine million children in the US. Both parties have been negotiating for weeks. Earlier this month, the House Energy and Commerce Committee approved a measure to fund CHIP for five years with zero Democratic support. Democrats opposed cutting dollars from Obamacare’s public health fund to pay for the measure — so it wasn’t sent to the floor for a vote. However, the GOP is now moving forward as the clock keeps ticking: several states are slated to run out of CHIP money in the next few weeks.

Meanwhile, at the other end of Pennsylvania Avenue, ehe Administration is set to announce a new Federal Reserve Chair this week and keep up the drum beat on opioids, but the Mueller investigation might make that difficult.

Stay tuned.

Budget and Taxes

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The Senate passed its FY 2018 budget by a vote of 51-49 on last night. The passage is a key step to Republican hopes of creating and passing any tax overhaul measure through Congress along party lines in the coming months. Senator Rand Paul (R-KY) was the lone Republican dissenter. Behind the scenes, GOP leaders have already hammered out an agreement to reconcile the differences between the House and Senate budget resolutions, likely negating the need for a formal conference and giving Republicans more time to focus on tax reform before the end of the year.

The Senate adopted a package of House-requested tweaks Thursday night, teeing up the budget resolution for House passage as soon as next week. Both chambers need to pass identical budgets in order to allow Republicans to use the fast-tracking tool for tax reform that permits them to bypass a Democratic filibuster in the Senate. As part of the deal, the House will have to accept the Senate’s plan to add $1.5 trillion to the deficit via tax reform after the lower chamber’s budget initially demanded a deficit-neutral tax plan.

If the Senate resolution can be passed in the House – potentially as soon as next week – it would eliminate the need for a conference agreement or other negotiations to resolve differences between the chambers, and the need for reconsideration of the resolution in the Senate. That would accelerate the process for tax reform given that House leaders have said a tax bill will not be released and processed until the budget is completed. President Trump has urged House members to accept the Senate budget resolution to avoid a conference, and the President will head to the Hill next week to talk to the Senate on a path forward with tax reform.

 

 

Senate Begins Debate on Budget Resolution

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The Senate has begun its floor debate on the FY2018 budget resolution. As mentioned previously, although usually used to determine parameters of federal spending, this year’s package contains a set of procedures that would enable the chamber to adopt a tax package by a simple majority.

With all Democrats expected to oppose it, one Republican Senator currently back home for health reasons, and a number of other members of the party expressing reservations about certain parts of the legislation, it is not yet certain that the Republicans have the votes for its passage.  A long list of votes on amendments is expected between now and the final vote on passage, which could take place on Thursday.