Budget Writers Buy More Time
Contemplating the Congressional Can Kicking
With the new fiscal year only about a week away, Congress bought itself some more time before adjourning for nearly two months. The House and Senate found one thing that they could agree on – that neither side wanted to head into the last 6 weeks of campaign season during a budget impasse that shuts down the federal government. To avoid that, they wrapped up work on a temporary budget measure (approved in the Senate early Saturday morning by a vote of 62 to 30), which does the following:
- Funds the government through March 27.
- Sets total appropriations at the level set in the Budget Control Act last August, which means that most discretionary programs will get a 0.6% increase for the first six months of federal fiscal year 2013, which starts on October 1.
- Gives defense spending the 0.6% increase as well, which provides about $1 billion more than the the House bill and almost $9 billion more than the Senate bill.
- Continues the SNAP (food stamp) and TANF programs without any changes for 6 months.
- Leaves in place (at least for now) the cuts from sequestration that will take effect in January.
This sort of temporary budget fix is technically known as a “continuing resolution.” As Gail Collins said in her New York Times column Saturday, it is also sometimes referred to as “kicking the can down the road,” but I agree with her that it’s nonetheless a relief that at least the House and Senate can agree on that much. Her column (“The Polar Express”) about the just-ended session touches on some of the unfinished legislation – including the farm bill, overhauling the postal service, and the importation of dead polar bears!
An important unresolved issue that the Collins’ column doesn’t specifically mention is the debate over sequestration, which will resume in mid-November after Congress comes back for a lame duck session. The sequestration spending cuts will probably be debated in conjunction with other parts of the so-called “fiscal cliff” – including whether to renew all of the Bush-era tax cuts and the improvements in the Recovery Act to the refundable tax credits. (See our blog post: Fiscal Cliff vs. Fiscal Slope.)
The sequestration and “fiscal cliff” debate will occur in November and December, and it could continue into 2013. In the meantime, defense contractors are likely to turn up the heat by sending out pink slips shortly before the election to workers whose jobs might be in jeopardy next year if the defense spending cuts take effect. Of course, shifting the cuts would shift a larger share of the job losses into other sectors.
We’ll take a close look at sequestration in an upcoming blog post.