November 14, 2024

Out of Debt-Limit Fight, a Bit of Stability on Spending

While provisions to raise the debt limit and create a Congressional deficit reduction committee drew most of the attention in the legislation that allowed the government to narrowly avert a default, House and Senate leaders also used the measure to establish federal spending limits for the next two years.

Lawmakers are still likely to clash over just how the money is parceled out to various agencies and the Pentagon. But members of both parties say the bipartisan compromise on overall spending makes it unlikely that an impasse will push Congress back to the brink of closing the government in a repeat of the April showdown that ended just hours before federal money ran out. The current fiscal year ends Sept. 30.

“It substantially reduces the risk of a shutdown fight,” said Representative Chris Van Hollen of Maryland, the senior Democrat on the Budget Committee, who added that the prospect of spending certainty helped him sell the debt limit agreement to his fellow Democrats.

In the debt limit bill, Congress allotted $1.043 trillion for spending on federal agencies and national security in 2012, an amount that does not include money for so-called mandatory programs like Medicare.

That level is $7 billion less than current spending, but $24 billion more than would be allowed under the budget drafted by Representative Paul D. Ryan, Republican of Wisconsin, and passed by House Republicans earlier this year. The ceiling rises to $1.047 trillion in the 2013 fiscal year, potentially saving Congress from another politically charged spending fight before the midterm elections in November 2012.

With the Congressional appropriations process in a shambles in recent years and the government running for months at a time on stopgap bills, leaders of both parties say the agreement could restore some order.

“It is imperative that the Congress complete these must-pass bills in a timely manner to avoid the harmful, destabilizing effects caused by a delayed and drawn-out appropriations process,” said Representative Harold Rogers, Republican of Kentucky and chairman of the House Appropriations Committee.

Still, obstacles remain. Congress has not passed even one of the 12 spending bills due by Oct. 1. While the new agreement is expected to accelerate consideration of spending measures, the shortage of time means the House and the Senate will probably have to again enact temporary stopgap measures to give lawmakers a chance to assemble the bills and bring them to the floor.

At the same time, some conservative activists are pressing House Republicans to insist on lower overall spending totals, noting that the debt limit legislation established ceilings but does not require that all the money be spent.

In an internal survey released last week, the conservative House Republican Study Committee asked its members to weigh in with their views on the new spending levels and how conservatives can use the coming spending deadline as leverage to continue to push for cuts.

But Mr. Rogers and House Republican leaders like Representative Eric Cantor of Virginia, the majority leader, are advocating that Republicans abide by the new agreement and not try to force lower spending.

“While all of us would like to have seen a lower discretionary appropriations ceiling for the upcoming fiscal year, the debt limit agreement did set a level of spending that is a real cut from the current year level,” Mr. Cantor said in a recent memorandum to his colleagues. “I believe it is in our interest to enact into law full-year appropriations bills at this new lower level.”

The Republican leadership would also like to focus most of its firepower on the new deficit reduction committee created under the debt limit deal and its efforts to find $1.2 trillion or more in savings over the next decade — a process with the potential for a bigger budgetary impact than another protracted tussle over just a few billion dollars in annual spending. The spending fights are taking a definite toll on the public’s view of Congress, according to recent polls.

Mr. Van Hollen and other Democrats noted that a push for cuts below the newly established levels would make Republicans look as though they were reneging, since the leadership negotiated the spending agreement and it was backed by most House Republicans as part of the legislation to break the debt limit impasse.

Even with the agreement on the so-called top-line dollar figure, Democrats and some Republicans say the spending restraints will force difficult choices since real spending would be reduced for agencies that have already absorbed a first round of cuts in the spending deal struck last April.

Aides have already begun trying to identify programs that can be trimmed back, and they predict that the House and Senate will face tough negotiations over spending on individual programs.

Efforts to add contentious policy provisions to the spending measures are also expected to set off partisan disputes. House Republicans have shown a determination to try to use the spending measures to block implementation of the new health care law, limit regulatory efforts by the Environmental Protection Agency and other agencies, and impose other restrictions on the Obama administration. While those fights could be messy, top lawmakers and aides do no expect them to prompt a government shutdown.

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Parties Head to Showdown as Obama Warns of a ‘Crisis’

With President Obama trying to employ the power of the presidency to force an agreement, House and Senate leaders said votes could occur as early as Wednesday on competing proposals to slash spending in exchange for increasing federal borrowing authority that the Treasury Department says will be exhausted Aug. 2, raising the prospect that federal bills will go unpaid.

It was a day of legislative chess moves, back-to-back party caucuses and closed-door meetings that ended with a nationally televised presidential address and a rebuttal by the House speaker, John A. Boehner. Their separate speeches reflected that the two sides are farther apart than ever — just a week ago, the two men were in private negotiations on a “grand bargain” of spending cuts and additional revenue, what Mr. Obama called “a balanced approach.”

“The only reason this balanced approach isn’t on its way to becoming law right now is because a significant number of Republicans in Congress are insisting on a different approach, a cuts-only approach — an approach that doesn’t ask the wealthiest Americans or biggest corporations to contribute anything at all,” Mr. Obama said in his address. “And because nothing is asked of those at the top of the income scales, such an approach would close the deficit only with more severe cuts to programs we all care about — cuts that place a greater burden on working families.”

Even as he sought to set Republicans up for blame for any crisis, Mr. Obama offered assurance that a crisis would be averted. He called on Americans to contact their lawmakers in support of a compromise. “We would risk sparking a deep economic crisis — this one caused almost entirely by Washington,” he said. “Defaulting on our obligations is a reckless and irresponsible outcome to this debate.” 

In response to Mr. Obama, Mr. Boehner said: “The sad truth is that the president wanted a blank check six months ago, and he wants a blank check today.  That is just not going to happen.”

Mr. Boehner urged the president to sign a Republican plan to raise the debt limit. “If the president signs it,” he said, “the ‘crisis’ atmosphere he has created will simply disappear.  The debt limit will be raised.”

Earlier in the day, in dueling news conferences on Capitol Hill, neither side showed any willingness to budge even though time was running very short, creating a distinct air of uncertainty around the Capitol about how the debt limit conflict would end.

“We’re about to go over the cliff,” Senator Harry Reid, the Nevada Democrat who serves as majority leader, said Monday afternoon as he outlined his plan.

The back and forth began when House Republicans rolled out a two-stage deficit reduction plan that would allow the $14.3 trillion federal debt limit to rise immediately by about $1 trillion in exchange for $1.2 trillion in spending cuts, and tie a second increase early next year to the ability of a new bipartisan Congressional committee to produce more deficit reduction measures.

Mr. Reid dismissed the House Republican plan as a “nonstarter” and said Republicans were essentially trying to embarrass Mr. Obama in the middle of the 2012 election year by forcing another debt limit showdown. He said Democrats would not go along with any plan that did not guarantee a debt limit increase through next year.

Democrats countered with a $2.7 trillion menu of spending cuts and an increase in the debt limit through 2012. Neither plan would require any new revenue.

The approach assembled by Mr. Reid quickly received the president’s endorsement. Over the next 10 years, it would cut $1.2 trillion from federal agency budgets and wring savings from recurring programs like agriculture subsidies. Like some earlier Republican plans, the plan also counts about $1 trillion in savings from winding down combat operations in Iraq and Afghanistan, a point objected to by House Republicans who consider such savings as budget trickery since they would occur regardless.

Jennifer Steinhauer and Michael D. Shear contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=6dbd5e2d6202944b5769459738b40982