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Category: Budget

Congress Averts Government Shutdown

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On Wednesday night, the Senate passed a continuing resolution (CR) that will keep the government funded at current levels through December 20th, averting a federal government shutdown. The bill now goes to President Biden’s desk for signature.

The stopgap bill, which passed the Senate by a 78-18 vote on Wednesday, was introduced after Speaker Mike Johnson (R-LA) failed to push his original funding proposal through the House of Representatives. This first attempt at a CR, which would have funded the government for six months, included the highly controversial SAVE Act, a Trump-backed plan that would require voters to provide documentary proof of citizenship at the time of registration. The majority of Democrats, despite a handful facing tough reelection bids, opposed the SAVE Act, citing the fact that it is already a crime to register or vote as a noncitizen in all federal and state elections. Without Democratic support, Johnson’s plan was unable to pass the House due to a divided GOP caucus.

Senate Majority Leader Chuck Schumer (D-NY) sits next to Speaker of the House Mike Johnson (R-LA) as a government shutdown looms.

After his original plan failed to pass the House, Johnson was forced to strip the SAVE Act and bring a new, three-month spending plan to the floor. The new bill passed the House on a 341-82 vote, with all opposition coming from Republicans. This move did not come without risk for Johnson, whose predecessor Kevin McCarthy (R-CA) became the first Speaker of the House to be ousted from his post when, last year, he was forced to work with Democrats to fund the government. Immediately following this bi-partisan maneuver, members of the GOP’s right flank voted to remove McCarthy from the Speakership. Johnson has defended the current bi-partisan funding bill, claiming that a GOP-led shutdown this close to Election Day would be “political malpractice.”

Having averted a shutdown for three months, Congress will now go on recess, with the stage set for a budget showdown when they return in November. Johnson has claimed that he will not allow any omnibus funding bills, which are large spending bills that package many programs into one, onto the floor during the lame duck session in December. While this would be a break with recent congressional precedent, much of the planning for this session will depend on the outcome of the November elections. For now, however, the government remains funded.

Congress Averts Another Government Shutdown

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Last week, President Biden signed the Further Continuing Appropriations and Other Extensions Act (H.R. 6363) thus preventing a government shutdown. The bill sets two different deadlines for different bills: there is a January 19 deadline for Congress to pass the FY24 Agriculture-FDA, Energy and Water, Military Construction-VA, and Transportation-HUD bills and a February 2 deadline for the remaining eight appropriations bills. The bill does not include any supplemental funding or cuts to existing levels of funding.

So far, the House has passed seven of the 12 annual government-funding bills, while the Senate has passed only three. Congress is on Thanksgiving recess and when they return will have to do significant work into 2024 to meet these two deadlines. Read more about this here.

What Will They Come Up With Next?

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After turning back approximately a dozen amendments during the floor debate last night, the Senate adopted by a 63 to 36 vote the debt limit bill, clearing it for the President’s signature later today.  The Treasury Department had been warning that the nation would lose its ability to pay all of its bills next Monday.  The House cleared the bill earlier this week.  

While the fight over the debt limit has become much more partisan and political recently, this year’s fight represents the closest the nation has come to actually defaulting on its debts.

Almost There…

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After much back-and-forth and a final round of negotiations last weekend, the White House and House Speaker Kevin McCarthy (R-CA) came to an agreement on a debt ceiling package earlier this week.   Yesterday evening, the House passed the legislation in a bipartisan manner, by a vote of 314 – 117.  The Senate must now take it up.

While its details are still being digested, the package contains the following provisions, among others:

  • a suspension of the debt limit until January 1, 2025 
  • essentially a freeze in discretionary spending for both FY2024 and FY2025 relative to FY2023, the current fiscal year
    • as part of the spending limits for the next two years, the legislation sets separate spending caps on “security” and “non-security” programs for the next two fiscal years
  • a mandatory cut of one percent in discretionary spending if all 12 annual appropriations are not signed into law by January 1 each fiscal year for the next two years
  • prohibition on further extensions of the student loan repayment deferrals– repayments would restart by early September

The legislation also includes a package of recissions, the details of which are still being assessed.  We will share additional information about them as they come to light.

Not surprisingly, there was drama in the House before the floor vote, as some members of the hard-right wing of the House Republicans blasted the deal.  There were questions about whether, procedurally, McCarthy had enough support to even bring the bill to the floor.  

As noted above, the bill now goes to the Senate, where both Majority Leader Charles Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) urged support for it among their colleagues.

Read more about the developments here, here, and here. 

President Biden & Speaker McCarthy Set to Meet Tuesday to Discuss the Debt Ceiling

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President Biden, Speaker McCarthy, and other congressional leaders are set to meet on Tuesday to discuss raising the debt ceiling amidst the ongoing political standoff and renewed urgency given the Treasury Department’s warning that the government could default on its debt as soon as June 1. House Republicans passed their debt ceiling bill last week that would increase the debt ceiling while cutting federal spending by more than $3.5 trillion over the coming decade. The plan would cut discretionary spending by an average of 18% over the next decade with little detail on which programs would be cut or spared. The New York Times estimates that if defense, veterans’ health, and border security are spared (which has been discussed), the remaining programs would have to be cut by half.  The bill also includes provisions that repeal some of the Biden administration’ priorities including the plan to cancel student loan debt. 

House Democrats meanwhile are calling for an increase in the debt ceiling without conditions (which was done multiple times during the Trump presidency) but the House Republicans claim they will not budge. Tuesday will be the first time in seven months that President Biden and Speaker McCarthy will meet to discuss this issue which will a critical to see if any progress can be made.  

Read more about this here and here.