News and updates

Both the House and Senate are out today, but return to the Capitol Tuesday with just two weeks left before the House is scheduled to take its summer recess. The Senate will follow suit in three weeks – unless they too decide to call it good and leave town with the House. In that meantime, leaders must reconcile the differing plans between the chambers for reauthorizing highway and transit funds. And both chambers have hearings slated around the review of the Iran nuclear deal.

But the issue we are watching most closely is the pending debt limit situation. The US Treasury estimates that extraordinary measures to stay financially viable will be exhausted in early December and there is a very good chance that November will be the month in which debt ceiling concerns start to escalate in the markets.

Republicans have begun drawing up their wish list in exchange for raising the debt limit this year. But if they decide to insist on conditions for raising the government’s nearly exhausted borrowing ceiling, they will face strong opposition from Democrats and the White House. And to further complicate the issue, the debt limit debate could get mixed up with whatever deal likely will still need to be reached on FY2016 spending.

The debt limit must be addressed or the government will default on its legal obligations, which the Treasury Department warns would result in a financial crisis.

The last time Republicans forced trade offs for their support to raise the debt ceiling was in 2011 when House Speaker John Boehner (R-OH) drove the successful demand to cut spending dollar-for-dollar for any debt limit increase. The result was the Budget Control Act (PL 112025), which ended up making $2.1 trillion in spending cuts in exchange for a $2.1 trillion debt limit increase. But since then, Congress has suspended the debt limit three times, effectively raising the borrowing ceiling, and the GOP has been unable to force spending cuts in exchange for those increases.

While December seems like a long way off, it will be here before you know it. Raising the debt limit is difficult enough in the current political climate, but having it wrapped around the FY2016 appropriations process and reauthorization of highway and transit programs makes a difficult situation even more challenging.

Congressional Republicans and Democrats are already are blaming each other for causing the next government shutdown, which won’t even happen for another 80 days (October 1^st). That may seem like plenty of time for lawmakers to work through their differences and approve appropriations bills to keep the federal government running, but the news from Capitol Hill today is not to expect any more appropriations bills to make it through the House chamber until Republicans and Democrats work out issues on the Confederate flag. That’s right. The Confederate flag.

Things aren’t much better in the Senate where Democrats have threatened to block all spending bills until Republicans agree to a deal to lift the spending caps and end the threat of sequestration (across-the-board cuts).

So far the House has approved six of their twelve annual spending bills, with the remaining six bills approved by committee and awaiting floor action. They were likely on track to approve all twelve bills before the end of September before the Confederate flag flap. The Senate has not been moving quite as quickly, and is now at a dead stop. They not approved any of their twelve bills, and have moved only five through committee. Proposed bills and report language can be accessed here.