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Congress Reconvenes Facing a Critical Mission: Avoid Fiscal Calamity Can Congress Avoid a Debt Default and $125 Billion in Spending Cuts?
(about 8 hours later)
WASHINGTON — Averting a potentially devastating default on the nation’s debt, preventing more than $100 billion in automatic spending cuts and keeping the government fully funded would be major tasks in any Congress. WASHINGTON — A Congress that has struggled all year to legislate returned Monday to face two urgent deadlines that, if not met, could lead to a disastrous default on the federal debt and to automatic spending cuts that would sweep like a scythe through the military, federal health care and other popular programs.
In this one, they may be herculean. In October or early November, fiscal analysts predict that the Treasury will run out of room to borrow money to keep the government operating, a catastrophe that could damage the stability of the United States economy and force the government to default on its debt.
As lawmakers return to Washington on Monday, they confront a gantlet of fiscal deadlines, and growing pressure to make progress in the coming weeks to ensure that the government avoids both a shutdown and a breach of the debt ceiling. That is about the same time that back-to-back budget deals would expire and strict spending caps enacted in 2011 would come back into force, automatically cutting military and domestic spending across the board by $125 billion. Lawmakers say they need to act now, before recesses in July and August, to avert a crisis. But so far, a divided Congress has found even usually easy things hard — like passing disaster relief.
That challenge is particularly fraught in an era of polarized and gridlocked government, on the heels of the longest shutdown in the country’s history. The House remains split over pursuing impeachment, the Senate churns out more judicial nominees than legislation and President Trump, who has shown himself willing to blow up deals at the last minute, has vowed not to work with Democrats until they end their investigations into his administration. “This has been an issue of great concern,” Representative Steny H. Hoyer of Maryland, the majority leader, said in an interview.
“We don’t have a lot of people in government right now who know how to govern or who want to govern,” said Representative John Yarmuth of Kentucky, the Democratic chairman of the House Budget Committee. And two wild cards loom: a president who, in his business days, bragged about taking on debt and used debt-default threats and bankruptcies to his advantage, and an acting White House chief of staff, Mick Mulvaney, who led the brinkmanship over the federal debt ceiling as a Republican House member.
Some lawmakers warn that a monthslong battle over such once-routine spending as a disaster relief package is an ominous sign for Congress’s ability to meet the looming fiscal deadlines over the next four months. That package, more than a week after Mr. Trump offered his approval, has yet to become law, because House Republicans objected to voting on it over the recess. (The full chamber is set to vote on the package again on Monday.) “We don’t have a lot of people in government right now who know how to govern or who want to govern,” said Representative John Yarmuth, Democrat of Kentucky and the chairman of the House Budget Committee.
“If we can’t work this out between us,” Senator Richard C. Shelby of Alabama, the Republican chairman of the Senate Appropriations Committee, recalled telling Mick Mulvaney, the acting White House chief of staff, during the relief negotiations, “how are we going to work the other things out?” Congress usually has overcome bouts of fiscal brinkmanship to waive the spending caps over the last four years and suspending or raising the statutory limit on federal borrowing.
Under the Obama administration, lawmakers reached multiple agreements to suspend the debt ceiling, including in 2011 and 2013, though Washington came perilously close to the deadline. President Trump, in 2017, bypassed the Republican majorities in place in both chambers at the time to tie emergency relief for communities devastated by hurricanes to an increase of the federal government’s borrowing limit.
But the challenge seems particularly fraught now, so soon after the longest shutdown in the country’s history. Few bills have made it through both chambers in the first few months of Congress, and Mr. Trump, who has shown himself willing to blow up deals at the last minute, has often shown a lack of concern about the soaring federal debt.
Some lawmakers warn that a monthslong battle over such routine spending as a disaster relief package is an ominous sign for Congress’s ability to meet the fiscal deadlines over the next four months. That package, more than a week after Mr. Trump offered his approval, has yet to become law, because House Republicans objected to voting on it over the recess. (The full chamber is set to vote on the package again on Monday.)
“If we can’t work this out between us,” Senator Richard C. Shelby of Alabama, the Republican chairman of the Senate Appropriations Committee, recalled telling Mr. Mulvaney during the relief negotiations, “how are we going to work the other things out?”
The challenge of resolving the debt ceiling and impending spending limits, he added, “is much bigger.”The challenge of resolving the debt ceiling and impending spending limits, he added, “is much bigger.”
Still, lawmakers are holding out hope. Congressional leaders emerged optimistic from private discussions last month with White House officials, and Senator Mitch McConnell of Kentucky, the majority leader, said it was possible that a two-year spending deal and a suspension of the debt ceiling limit could be merged into one deal. Still, lawmakers are holding out hope. Congressional leaders emerged optimistic from private discussions last month with White House officials, and Senator Mitch McConnell of Kentucky, the majority leader, said it was possible that a two-year spending deal and a suspension of the debt ceiling could be merged into one deal.
“I don’t want to be too forward-leaning in predicting an agreement, but it seems to me, without exception, everyone would like to,” Mr. McConnell told reporters in between meetings with congressional leadership and White House officials.“I don’t want to be too forward-leaning in predicting an agreement, but it seems to me, without exception, everyone would like to,” Mr. McConnell told reporters in between meetings with congressional leadership and White House officials.
A failure to lift spending limits, enacted in 2011 under the Budget Control Act, would automatically cut military and domestic spending by billions of dollars without action from Congress. And without congressional authorization to raise the government’s borrowing limit, the government could potentially ignite an economic catastrophe. Both Mr. Mulvaney, a founding member of the hard-line conservative House Freedom Caucus, and Russell T. Vought, the acting director of the Office of Management and Budget, have demonstrated a penchant for brinkmanship on the debt ceiling and a desire to keep strict spending limits in place.
“This has been an issue of great concern,” Representative Steny H. Hoyer of Maryland, the majority leader, said in a recent interview. “Not only brought on by the shutdown, but brought on by the inability over the years to treat the appropriations process as a real process that needed to be done in a responsible way.” Mr. Hoyer said Mr. Mulvaney had broached the possibility of adhering to the strict spending limits set under the Budget Control Act of 2011, a law he was instrumental in forcing, instead of raising them the way Congress has done in the past.
Under the Obama administration, lawmakers reached multiple agreements to suspend the debt ceiling, including in 2011 and 2013, perilously close to the deadline. Mr. Trump, in 2017, bypassed the Republican majorities in place in both chambers at the time to tie emergency relief for communities devastated by hurricanes to an increase of the federal government’s borrowing limit.
Both Mr. Mulvaney, a founding member of the hard-line conservative House Freedom Caucus, and Russell T. Vought, the acting director of the Office of Management and Budget, have demonstrated a penchant for brinkmanship on the debt ceiling and a desire to keep strict spending limits in place, prompting concern on Capitol Hill that the pair will complicate negotiations.
In an interview, Mr. Hoyer said Mr. Mulvaney had broached the possibility of adhering to the strict spending limits, instead of raising them the way Congress has done in the past.
“They were alone in that proposition, I think,” Mr. Hoyer said. “For the most part, both sides have interest in getting to an agreement on numbers.”“They were alone in that proposition, I think,” Mr. Hoyer said. “For the most part, both sides have interest in getting to an agreement on numbers.”
Mr. Mulvaney and other White House officials have declined to comment on the meetings with congressional leadership. Mr. Mulvaney and other White House officials have declined to comment after the meetings with congressional leadership.
Mr. McConnell notably made the distinction that Steven Mnuchin, the Treasury secretary, is taking the lead for the administration in negotiations, noting that few people in Congress want to see the enforcement of what Mr. Shelby has repeatedly referred to as “draconian cuts.”Mr. McConnell notably made the distinction that Steven Mnuchin, the Treasury secretary, is taking the lead for the administration in negotiations, noting that few people in Congress want to see the enforcement of what Mr. Shelby has repeatedly referred to as “draconian cuts.”
“A negotiated agreement with the House Democrats is the best of three alternatives,” Mr. McConnell said, pointing out that the other two would be a short-term spending bill or the carrying out of the stringent spending limitations.“A negotiated agreement with the House Democrats is the best of three alternatives,” Mr. McConnell said, pointing out that the other two would be a short-term spending bill or the carrying out of the stringent spending limitations.
Both Speaker Nancy Pelosi and Senator Chuck Schumer, the minority leader, have said they are pushing to match increases in military spending, which Republicans want, with equal boosts for nonmilitary spending, which Democrats favor. Both Speaker Nancy Pelosi and Senator Chuck Schumer, the Democratic leader, have said they are pushing to match increases in military spending, which Republicans want, with equal increases in nonmilitary spending, which Democrats favor.
“Democrats are committed to working on a bipartisan basis to avert devastating cuts of the sequester,” the pair said in a joint statement last month. “We continue to insist that there be parity in increases between defense and nondefense, and that we adequately fund critical domestic priorities, including the census and our commitments to our heroic veterans.”“Democrats are committed to working on a bipartisan basis to avert devastating cuts of the sequester,” the pair said in a joint statement last month. “We continue to insist that there be parity in increases between defense and nondefense, and that we adequately fund critical domestic priorities, including the census and our commitments to our heroic veterans.”
Although a bicameral agreement on spending levels has not been reached, House lawmakers have begun working on their government funding bills, in what Mr. Hoyer said was an effort to offer their Senate counterparts “a template” for final spending bills. Earlier this year, the Democratic majority punted on releasing a budget blueprint, instead focusing on legislation increasing domestic and military spending and moving forward with spending bills. Although a bicameral agreement on spending levels has not been reached, House lawmakers have begun working on their government funding bills, in what Mr. Hoyer said was an effort to offer their Senate counterparts “a template” for final spending bills.
The House is set to begin voting on those spending bills this month, a goal Mr. Hoyer in particular has pushed, although it is likely the Republican majority in the Senate will object to a number of provisions House Democrats have advocated, including a bipartisan amendment that would repeal the 2001 authorization for the use of military force. The House is set to begin voting on those spending bills this month, a goal Mr. Hoyer in particular has pushed, although it is likely the Republican majority in the Senate will object to a number of provisions House Democrats have advocated.
Members of both appropriations committees, pressed on the feasibility of avoiding another government shutdown, are also quick to point out that 2018 was the first time in decades that about 75 percent of the government was funded by the end of the fiscal year. And there is also some enduring optimism that bipartisan deals on other matters can be struck between the two chambers and the White House. Members of both appropriations committees, pressed on the feasibility of avoiding another government shutdown, are also quick to point out that 2018 was the first time in years that about 75 percent of the government was funded by the end of the fiscal year — in the past, Congress has missed that deadline. And there is also some enduring optimism that deals on other matters can be struck between the two chambers and the White House.
A number of other legislative items also require attention, including a major military policy bill, reauthorization of the Violence Against Women Act and the administration’s demand for about $4.5 billion for the southwestern border. A number of other legislative items also require attention, including the annual military policy bill, reauthorization of the Violence Against Women Act and the administration’s demand for about $4.5 billion for the southwestern border.
“In the end, we have to get our work done,” said Senator Susan Collins, Republican of Maine and a longtime member of the Appropriations Committee. “My hope is that we can identify areas of common ground.”“In the end, we have to get our work done,” said Senator Susan Collins, Republican of Maine and a longtime member of the Appropriations Committee. “My hope is that we can identify areas of common ground.”