The Impending Government Shutdown (No, Not That One)

I’m going to get a little ahead of myself here, and talk about the impending government shutdown.  No, not the one that was going to happen yesterday if the debt ceiling were not raised.  Actually, what would happen if we hit the debt ceiling would not technically be a government shutdown.  It’s very possible that Treasury would have chosen to pay the bills required to keep most government operations running.  (That is not to downplay the consequences of not raising the debt ceiling, which would have been serious.  It just would not necessarily have resulted in a government shutdown.)

A “government shutdown,” as the phrase is most often used, occurs when the Congress has not passed a budget to fund continuing government operations.  Most often, this happens if budget negotiations surpass the end of the fiscal year, or the end of a continuing resolution.  The fiscal year ends on September 30, now less than two months away.  At that point, if Congress has not passed a budget for the next fiscal year, or at least a continuing resolution, there will be a government shutdown.

You may recall that Congress failed to pass a budget on time last year. They passed several continuing resolutions, one of which was settled so close to the end of the previous resolution that whispers of a government shutdown arose. Congress passes continuing resolutions when they cannot agree to a budget for the entire fiscal year. These continuing resolutions usually entail a continuation of previous spending with a few cuts here and there.

The House has already passed a few appropriations bills, but it is not clear how many of them have a chance of passing the Senate.  Here are a few of the flash points of what may be yet another contentious budget fight:

  • The Affordable Care Act and the Dodd-Frank financial reform bill are both going through a long process of implementation.  The establishment of new rules, regulations, and various beaurocratic entities require funding, and much of that is determined through the appropriations process.  This remains one of the few remaining avenues through which the current Congress can threaten the implementation of these laws, and Republicans are eager to do just that.
  • Attempts to curb the current powers of the Environmental Protection Agency may result in the most heated debate.  Republicans have made some serious moves with amendments to the appropriations bill for the Dept. of the Interior and Environment, including measures prohibiting the protection of any further wilderness areas and deregulating mountain-top mining, among others.
  • Like last year, the Low Income Home Energy Assistance Program (LIHEAP) is on the chopping block.  This is a program that provides assistance for electricity and home heating oil for low-income households.  It is an important priority for Democrats, and perhaps for the moderate Republican Senators from Maine, Sen. Collins and Sen. Snowe, due to the importance of home heating in their state.  LIHEAP survived budget debates last year, with funding totalling $4.7 billion.

Some of you may be confused.  Didn’t Congress just pass a law that established a committee to deal with these budget problems?  Indeed, the brand-new Budget Control Act of 2011 establishes a special committee that is required to look at spending cuts, tax reform, and entitlement reforms and put a comprehensive budget deal to a vote in November.  The passage of the debt-ceiling bill almost certainly mitigates a lot of the issues that may have had to be settled by September 30.  For example, the bill set a cap on discretionary spending for 2012 (and future years), so at least the maximum amount that can be allocated is settled.  Also, tax hikes and more draconian spending cuts may have been on the table for this budget debate if it weren’t for the passage yesterday of the Budget Control Act.

Perhaps the creation of the Congressional committee to deal with the deficit will cause people in both chambers to tone down their battles over the budget.  Knowing that they will vote to change the budget details drastically in November, perhaps Congress will choose not to use the September 30 deadline as the appropriate time to have a fight.  Given the nature of the appropriations bills that have passed already and some very recent precedent, I doubt it.  The current House Republicans are loath to give an inch on any spending or regulation, and appear to embrace brinksmanship.

And the summer recess started today, so there will be no action on legislation for a few more weeks.  That means that after they get back from vacation, Congress will have barely over a month to pass a budget for FY 2012.  Government shutdown, anyone?

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