The 4 upcoming spending battles in Congress
Spending battles have dominated this Congress more than any other issue in the first few months of Republican control of the House of Representatives. And with Democrats still in control of the Senate and the presidency, those fights are far from over.
A government shutdown in Fiscal Year 2011 was averted, but federal workers face the threat of another shutdown just months from now. Congress will have to find a way to raise the nation's debt ceiling to avoid defaulting on loans and ruining the credit rating of the United States while also adopting some kind of fiscal reforms to satisfy the fiscally conservative and Tea Party members in Congress and show the world that United States' leaders are serious about getting the nation's fiscal house in order.
Just this morning, the credit rating agency Standard and Poor's changed its long-term assessment of United States debt from stable to negative. That's based on the agency's belief that Congress and President Obama will be unable to reach agreement on a plan to reduce the nation's $14 trillion deficit before the 2012 elections.
That assessment raises the stakes for the budget brawls ahead as Congress bears the burden of trying to prove that agency wrong.
Below is a look at the spending battles members of Congress will face in the months ahead.
Debt Ceiling:
The most immediate spending fight when Congress returns next month will be over the debt ceiling. How much money the United States government can borrow is limited by this ceiling. Treasury Secretary Timothy Geithner has notified Congress that they will need to raise the debt limit in mid-May to early July for the United States to meet its current fiscal obligations. House Republican leaders have reportedly assured the administration that this will be done, but Speaker John Boehner has promised publicly to only raise that ceiling from the current $14.3 trillion level if it is accompanied by spending cuts and reforms. Many of the 87 House Republican freshmen have already vowed to vote against any increase in the debt ceiling, and Republicans may have to go begging House Democrats for help on a vote that is typically only supported by the party in power. Even if the House is able to find a way to pass the measure, differences in the spending reforms will have to be worked out with the Senate.
Gang of Six:
The president's deficit commission led by former Sen. Alan Simpson and former Bill Clinton adviser Erskine Bowles failed to garner enough support to force a congressional vote on their plan, which would reduce the deficit by nearly $4 trillion over the next 10 years by slashing popular tax breaks and overhauling entitlement programs. A bipartisan group of six senators decided, however, to pick up where the commission left off. One of the members, Sen. Mark Warner (D-Va.), told Bob Schieffer on CBS News' "Face the Nation" yesterday that they are "very close" to reaching an agreement that will "make everybody mad." Warner also said increasing taxes, overhauling entitlement programs and cutting spending are all on the table. That's in contrast to the House GOP budget that aims to reduce the deficit without raising anyone's taxes. Members of the gang are hoping that their efforts will garner support on both sides of the aisle, but it will be difficult to convince House Republicans to consider any new taxes, especially given their campaign promise to fight any effort to raise taxes. Staffers for the "Gang of Six" are working over the two-week recess and members will likely keep in touch over the phone according to aides to keep making progress.
2012 Spending:
Just when Congress averts a government shutdown and settles the great spending fight for Fiscal Year 2011, it's time to battle over 2012 funding. That's because the long-term spending bill that Mr. Obama signed into law just over a week ago only funds the federal government for the next five months through the end of the fiscal year. The House is in session for just 10 out of the next 15 weeks leading up the August recess, but Appropriations Chairman Hal Rogers (R-Kent.) set the ambitious goal of passing each of the 12 Appropriations bills needed to fund the entire federal government by that break. A committee aide says keeping to that schedule is dependent on leadership scheduling those bills for floor consideration. Of course, like any bill in Congress, for these measures to become law they must also pass the Senate. Given the continuing effort by House Republicans to cut spending (they want to cut another $30 billion for 2012 and reduce the deficit by $4.4 trillion over the next 10 years), the House and Senate will likely get into major disagreements over the cuts in each of the Appropriations bills and could hit the end of the fiscal year, September 30th, without resolving those differences. In order to keep the government running, and avoid a shutdown, Congress would be back in the same position as this year and would need to pass short-term continuing resolutions keep government open for business.
Tax Reform:
The GOP budget that passed the House last week calls for slashing corporate and individual tax rates from 35 percent to just 25 percent. The budget lays out a plan to make up for the lost revenue by closing tax loopholes, but offers no specifics on which loopholes would be eliminated. That job goes to House Ways and Means Chairman Dave Camp (R-Mich.) and it's unclear how fast the committee will move on it. One committee aide said they are in the initial phase of the effort and that no date is set yet to unveil tax reform legislation. The committee does plan to hold hearings on tax reform; however, that will be announced after the current two-week spring recess. The committee's efforts could be overshadowed though if the Senate "Gang of Six" is able to reach agreement on a broader plan to overhaul the tax system and save entitlement programs like Medicare and Social Security.
