Congress Expected to Do the Bare Minimum and Temporarily Fund the Government
United States Senate Majority Leader Chuck Schumer (D-NY) announced late Wednesday night that the upper congressional chamber had reached a bipartisan agreement to pass a continuing resolution to fund the federal government until December 3rd – at which point we will be right back where we started – to avert a shutdown before its new fiscal year begins on Friday, October 1st.
“We have an agreement on the CR, the continuing resolution to prevent a government shutdown, and we should be voting on that tomorrow morning,” said Schumer.
The Senate vote is scheduled for 10:30 a.m. Presuming its approval, the continuing resolution will go to the Democratic-led House of Representatives, where it is expected to pass sometime Thursday afternoon.
This latest iteration of an ongoing pattern of governing from self-inflicted crisis to crisis could also create an opening for – because it does not include – a means of lifting the nation’s borrowing limit, enabling the government to pay for obligations that it has already incurred. But Republicans are unified on a pledge to filibuster whatever dollar amount that Democrats propose.
While it does not authorize new spending, “raising the debt limit is akin to paying off your credit card bill at the end of the month, because a higher borrowing ceiling allows the Treasury to pay creditors, contractors and agencies money that was already extracted from them in Treasury bonds and notes or contracts. It is not for future obligations,” The New York Times explained on Thursday.
A failure to increase the $28.4 trillion fiscal barricade would trigger a catastrophic, first-ever debt default that would roil global financial markets and plunge the world’s fragile pandemic economy back into a recession.
Treasury Secretary Janet Yellen warned lawmakers in a letter on Tuesday that they have until October 18th to avoid a default. Democrats, however, will have to go it alone, with limited options.
“For Democrats to do so unilaterally, they would most likely have to use a budget process called reconciliation that shields fiscal measures from a filibuster,” the Times noted, stressing that “doing so is a complex and time-consuming affair” that can take several weeks.
The process is also accompanied by a litany of limiting complications.
According to an analysis in Thursday’s Washington Post by Stuart Kasdin, a member of the Goleta City Council and political science professor at Santa Barbara City College:
CRs have some downsides. First, funding by CR means that agencies can only extend projects that existed during the prior fiscal year. Until agencies have a new, regular appropriation from Congress, they cannot start new projects and must defer hiring and training employees.
Second, operating under a CR precludes agencies from awarding new federal contracts to carry out federal programs. Given that the federal government spends about $550 billion each year on contracts (or almost 9 percent of the entire federal budget), CRs force agencies into holding patterns.
What’s more, once an agency secures its annual funding, the rush is on to spend the funds before the end of the fiscal year, when unspent funds must be returned to the Treasury. Preparing a request for proposals and awarding contracts is time-consuming. And that means agencies often take shortcuts in deciding where and how to spend their funding to avoid allowing appropriations to go unspent.
This is a developing story.