Congress may have kicked the end of fiscal year spending issue can down the legislative road for a couple months, but it’s still a long way from resolving the underlying issues. Here’s what we mean.
On September 8, lawmakers adopted a continuing resolution to fund government through December 8, suspend the debt limit until the same date, approve more than $15 billion in disaster assistance and extend the National Flood Insurance Program through the same date as well. It’s the earliest in recent memory Congress has thrown in the towel on getting spending bills done before the end of the fiscal year on September 30.
So December is the new September, but that doesn’t solve much. Extending deadlines for Congress is like giving a college kid a term paper extension, it just delays the all-nighter to get it done. And that doesn’t take into account the all the other stuff Congress wants or needs to get done between then and now.
The Federal Aviation Administration authorization expires September 30 as does the authorization for the Children’s Health Insurance Program. A few years ago, lawmakers let the FAA reauthorization expire for several days and that led to hundreds of millions of dollars in airfare ticket taxes not being collected (and it didn’t reduce fares, airlines just kept the dough).
After Superstorm Sandy, Congress limited funds NFIP can borrow from the Treasury to $30.4 billion. Even before Hurricanes Harvey and Irma (and Maria) hit, the program was $24.6 billion in debt. FEMA officials put flood insurance claim estimates for Harvey at roughly $11 billion – which would trigger a need to increase the borrowing authority. Also, it’s pretty clear that $15 billion in disaster assistance was a down payment and that there is going to be a second, third, or even fourth supplemental disaster assistance request.
The Senate is planning on taking up yet another Obamacare/Affordable Care Act repeal next week and if that is adopted, it will require the House to consider it as well. Senate budget writers are also teeing up the next budget resolution (they have to wait adopt it because the FY2017 budget reconciliation – the one they are using to repeal Obamacare – turns into a pumpkin as soon as the FY18 budget resolution is adopted).
Rumors are that this budget resolution may estimate tax reform as being a tax cut that generates a $1.5 trillion loss to the treasury.
The Senate passed the Fiscal Year 2018 National Defense Authorization Act and will have to hammer out its differences with the House on the Pentagon policy bill. One thing the Senate bill didn’t include was a provision sponsored by Sen. Cotton (R-AR) that would have gutted the budget caps by removing the enforcement mechanism, the threat of across-the-board cuts from sequestration. But that does mean lawmakers are going have to figure out what do about the caps, because at least the House of Representatives is planning on overspending on the defense side.
Even if lawmakers decided to do a year-long continuing resolution at fiscal year 2017 spending levels, it would exceed the caps, because fiscal year 2018 cap levels are slightly lower those for this year. Something has to give.
The short of all this is that although there seems to be a flurry of activity on the Hill, we see a large gap between action and outcomes. Specifically governance that does not waste the taxpayer’s money or works to use the public purse wisely and with vision. We are not fooled. You should not be either.
Lawmakers have to roll up their sleeves and get to work. They are living on borrowed time as well as borrowed money.