The Pending Government Shutdown Showdown

The Pending Government Shutdown Showdown

The basic process of how the federal government creates and approves its annual budget is rather straight forward, on paper at least. In ultra simplistic terms it all starts with the President presenting to Congress, in February, a budget request which, “outlines the Administration’s policy and funding priorities and the economic outlook for the coming fiscal year. This budget… estimates spending, revenue and borrowing levels” (http://budget.house.gov/budgetprocess/). After the President introduces his/her budget request the respective Committees in the Senate (United States Senate Committee on the Budget) and House (U.S. House of Representatives Committee on the Budget) take up the budget request. After reviewing, working on the request the Committees create a concurrent resolution (meaning the House and Senate work together to craft one agreed upon resolution) and present it to Congress. This concurrent resolution determines how much monies can be spent by the entire federal budget but is in and of itself not an enforceable law. Once the House receives this concurrent resolution it gets to work and creates legislation to fund the specific workings of the federal government via 12 appropriations (aka spending) bills. The grand total of spending within these 12 appropriations bills must be within the limit set by the afore mentioned concurrent resolution or there must be new laws to reconcile and allow the difference. When the appropriation bills have been reconciled with the concurrent resolution, they are voted on by the full House and Senate and once passed move on to the President for his/her signature. The President can veto all or any of the bills and once signed the bills go into effect on October 1st the beginning of the new fiscal year. (http://budget.house.gov/budgetprocess/; https://www.thoughtco.com/approving-the-u-s-federal-budget-3321456). For a timeline of the budget process: http://budget.house.gov/budgetprocess/budgettimetable.htm. For an in-depth and detailed discussion of how the federal budget process works: https://www.budget.senate.gov/imo/media/doc/Introduction%20to%20the%20Federal%20Budget%20Process1.pdf.

When this process does not go as it should and Congress cannot agree on a budget for the next fiscal year or if the current fiscal year has started without an official budget then Congress can pass a Continuing Resolution, which allows the current spending levels and current budget to be extended for a set period of time (http://www.cnbc.com/id/100550293). In fact for most of the past 20 years Congress has not completed the budget process by the October 1st deadline resulting in numerous Continuing Resolutions and infamous government shutdowns (Source: same as above). The budget for fiscal year 2016 (which we are still in) involved Continuing Resolutions, the last of which was created in December 2016 and is slated to expire on April 28, 2017 (http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394665). Thus Congress must pass another Continuing Resolution in order to prevent a government shutdown and hence this is our focus for today.

Since a Continuing Resolution is vital for the government to keep running, it can be a time when brinksmanship arises –when controversial issues are tacked on to the Continuing Resolution with the motivation being that the minority party will have to pass the Continuing Resolution in order to prevent the government from screeching to a halt.

At present all parties involved are expressing optimism that a government shutdown will not occur on April 29th, in fact a continuance of funding for a few more weeks might be added to a defense bill that is currently in the Senate thus giving Congress more time to actually create the Continuing Resolution (http://www.natlawreview.com/article/government-shutdown-looms-current-continuing-resolution-expires-friday-white-house). However there is a potential stumbling block here – as within the Senate bill there is a request for $30 million in defense spending, amongst other things, and the Democrats are not willing to approve that. The Democrats are offering a $15 million defense spending increase and in return are requesting that Congress ensure the continued payment of cost-sharing reduction payments (CSRs), which are the subsidies given to insurers that reduce the cost of insurance for lower-income individuals – it gets a little messy as there is a law suit, which is on hold, and in past years Obama ensured this payment occurred but with Trump in the White House it is the Democratic position that Congress must ensure that these payments continue. These payments were established in the Affordable Care Act, which as we know from Speaker Ryan is the law of the land, and are a crucial element in stabilizing the insurance markets; but Speaker Ryan regards the CSRs as illegal and has stated he will not allow them to continue via Congress. (http://thehill.com/policy/healthcare/330609-aide-white-house-threatens-to-cut-off-obamacare-payments-on-pelosi-call; http://thehill.com/policy/finance/330636-ryan-rejects-obamacare-subsidies-in-funding-bill; http://www.politico.com/story/2017/04/26/paul-ryan-budget-obamacare-payments-237631; http://thehill.com/homenews/senate/330561-shutdown-fears-spur-horse-trading).

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