The PJ Tatler

Congress Passes Stop Gap Funding Measure

Congress has passed a temporary funding measure for the federal government that will avoid a shutdown on October 1st and fund government operations through March 27.


For the new fiscal year which begins on October 1, the $524 billion measure slightly raises discretionary spending – which funds government agencies and everything from defense to national parks – from current levels.

It was needed because Congress’ normal process of appropriating money for government operations broke down amid disagreements between Democrat and Republicans over spending levels and funding was due to run out after September 30.

“It is an inefficient way to fund the federal government but it is better than shutting it down next week,” said Democratic Senator Daniel Inouye, the Democratic chairman of the Senate Appropriations Committee.

Congress’ bitter fights over spending cuts and raising the debt limit last year led to threats of several shutdowns as temporary funding measures expired. The last time government funding actually ran out was late 1995 and early 1996, forcing then-president Bill Clinton to shut down non-essential services and furlough non-essential government workers for 28 days.

Saturday’s vote allows lawmakers to return to their home states for a final re-election campaign push, but they leave a huge to-do list for their return after the November 6 election.

By keeping the government funded through March 27, Congress has somewhat lightened its post-election workload, which centers on dealing with expiring tax cuts, automatic spending cuts, a debt limit increase and other fiscal deadlines.

With relative peace over the budget, lawmakers will be able to tackle more difficult difficult questions – how to avoid $109 billion in automatic budget cuts that start on January 2, and whether to extend some or all of the tax cuts enacted under former President George W Bush, which expire December 31.

Moody’s Investors Service has threatened to downgrade the U.S. credit rating if Congress’ deliberations do not reduce budget deficits in a meaningful way. Economists warn that the United States will slide back into recession if Congress fails to take action to mute the massive impact of tax hikes and spending cuts.

The GOP is already making noises that they would be willing to cave on tax increases if President Obama is re-elected.

Washington Post:

Senior Republicans say they will be forced to retreat on taxes if President Obama wins a second term in November, clearing the biggest obstacle to a deal with Democrats to defuse a year-end budget bomb that threatens to rock the U.S. economy.

Republicans have long resisted tax increases of any kind. But taxes are a major battleground in the campaign between Obama and Republican Mitt Romney, Capitol Hill veterans say, and the victor will be able to claim a mandate for his policies.

“This is a referendum on taxes,” said Rep. Tom Cole (R-Okla.), a senior member of the House Budget Committee. “If the president wins reelection, taxes are going up” for the nation’s wealthiest households, and “there’s not a lot we can do about that.”

With Election Day still more than six weeks away and the president holding a thin lead in national polls, Republicans say they are not conceding that an Obama victory is the likely outcome. But they are beginning to plan for that possibility.

Lawmakers expect to leave town Friday and will not return until mid-November, when they will have little time to head off $500 billion in automatic tax increases and spending cuts set to take effect Jan. 2.

If Romney wins the White House, Republicans say, their strategy is clear: They would push to maintain current tax rates through 2013, giving the new president time to draft a blueprint for overhauling the tax code and taming the $16 trillion national debt.

But if Obama wins, the GOP would have no leverage — political or procedural — to force him to abandon his pledge to raise taxes on family income over $250,000, according to senior Republicans in the House and the Senate.

Are Democrats indicating that they will back off tax increases if Romney wins? I thought not. What possible good can come of revealing a post election strategy at this point? This gives the Democrats zero incentive to climb down on increasing taxes. It doesn’t make any sense.

But this is the Republican party so sense is not in great supply. What is needed more than common sense, however, is a good supply of iron bars to better stiffen the backbones of milquetoast lawmakers.