Bloomberg News

Congress at Impasse Over U.S. Spending Amid Shutdown Threat

September 24, 2011

(Updates with Welch, Cantor comments from 15th paragraph.)

Sept. 24 (Bloomberg) -- Congress is at an impasse over a federal spending bill amid a partisan dispute on funding for disaster assistance, escalating a fight that threatens a shutdown of government operations by month’s end.

The Senate yesterday rejected, 59-36, a House-passed stopgap measure to fund the government until Nov. 18 and provide $3.65 billion in aid to victims of Hurricane Irene, tornadoes, flooding and other natural disasters. Senate Democratic leaders opposed the House bill’s $1.6 billion in spending cuts to offset the disaster aid and said it didn’t provide enough money to help affected communities.

Senate Majority Leader Harry Reid, saying leaders in both parties need to “cool off,” offered an alternative to fund the government and provide the House-approved level of disaster aid without the spending offsets. The Senate plans a test vote on the measure Sept. 26.

Without new money, the Federal Emergency Management Agency will run out of funds for responding to disasters on Sept. 27, spokeswoman Rachel Racusen said in a statement. The rest of the government will run out of money Sept. 30. Both houses had been scheduled to be on recess next week.

No House votes are scheduled until Oct. 3. Still, Republican Whip Kevin McCarthy’s office advised members in an e- mail that they would be told “as soon as possible” of any “change to our schedule.”

Reid said at a news conference yesterday his plan should gain broad support in both chambers. The Nevada Democrat said he won’t consider other ways to offset disaster spending, while he and other Democratic leaders urged Republicans to meet to discuss how to end the standoff.

‘Fair Solution’

“Now it is the time to work toward a reasonable and fair solution to fund disaster relief and avoid an unnecessary and destructive government shutdown,” said Senator Charles Schumer of New York, the third-ranking Democratic leader.

Republican leaders signaled they aren’t ready to compromise. House Speaker John Boehner told reporters he spoke by telephone with Reid and “there wasn’t much progress made.”

“If we are back in Washington, it means Harry Reid has shut down FEMA and denied disaster victims their relief,” said House Majority Leader Eric Cantor, a Virginia Republican.

Senate Democrats last week pushed through their chamber a $6.9 billion disaster assistance bill. They object to the House’s approach of partly offsetting the cost with spending cuts elsewhere, a break with the typical practice of approving disaster aid without accompanying reductions.

Republican Cuts

Democrats also oppose Republicans’ program cuts of $1.5 billion from a loan program to encourage the development of green-technology automobiles and $100 million from a program that provided a $535 million federal loan guarantee to Solyndra LLC, which filed for bankruptcy protection this month.

A bipartisan group of four governors whose states suffered damage by Hurricane Irene and Tropical Storm Lee urged Congress in a statement to “to put aside politics” and provide help.

“It’s been 28 days since Irene and Lee started battering our states” said Democratic Governors Andrew Cuomo of New York and Bev Perdue of North Carolina and Republican Governors Chris Christie of New Jersey and Tom Corbett of Pennsylvania. In 2005, they said, Congress took 10 days to enact $60 billion in emergency aid after Hurricane Katrina destroyed communities along the Gulf Coast.

Vermont Representative Peter Welch, one of six Democrats who voted for the House measure, said he was worried about assistance for flood victims in his state if the disaster-relief fund is not replenished soon.

‘Just a Spectacle’

Congress’s inability to act is “just a spectacle,” Welch said in an interview. “There should not be roadblocks to getting disaster assistance to people when rivers are rising and fires are burning.”

Earlier this year, Congress averted a government shutdown and, later, a default of obligations to government bondholders when compromises gained enough support from House Democrats to outweigh the opposition of Tea Party-backed Republicans.

The protracted fight over extending the U.S. government’s borrowing authority to avert a debt default “rattled people’s confidence” and left them wondering “in a fundamental way whether Congress is dysfunctional,” Welch said. So the “inability to act quickly” on disaster relief “is another example of that,” he said.

Cantor said Reid’s decision to scuttle the House-passed measure provides further evidence of “why people just don’t have respect for this institution and this town anymore.”

Boehner Setback

On Sept. 21, House Republicans unhappy with the plan’s overall cost joined Democrats to derail an earlier version of the measure, 230-195. The vote was a setback for Boehner, who has faced challenges in managing his large freshman class of Tea Party-backed Republicans.

The dispute carries political risk for Republicans because polls show the public is weary of the rancor that marked previous battles over the budget. Disapproval ratings for Congress are at historic highs, and Republicans are faring worse than Democrats in polls.

In a Sept. 10-15 CBS News/New York Times poll, 72 percent of adults surveyed disapproved of the job performance of Republicans in Congress and just 19 percent approved. Democrats had a disapproval rating of 63 percent and an approval rating of 28 percent. The poll of 1,452 adults had a margin of error of plus or minus 3 percentage points.

The higher disapproval ratings for Republicans stem largely from perceptions that Boehner and other party leaders are unwilling to compromise with Democrats on key issues, said Michael Dimock, research director of the Pew Research Center.

‘No One Cares’

Still, Welch said “no one cares” in storm-ravaged areas who is to blame politically for the delay in disaster aid. “Back home people are just interested in what’s going on” and want lawmakers “to get the job done,” he said. “All the blame we assign here doesn’t matter.”

The new legislation would set spending levels for the “discretionary” budget for the upcoming fiscal year that were agreed to last month in a compromise to raise the U.S. debt limit. Democrats say they have no intention of reopening that debate.

Schumer said this week, “You can’t shake hands on an agreement at the end of July and then they say ‘oh no, it’s up for negotiation again’ in September.”

The measure rejected by the Senate is H.R. 2608.

--With assistance from Brian Faler, Catherine Dodge, Kathleen Hunter and Jeff Bliss in Washington. Editors: Laurie Asseo, Jim Rubin

To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net; Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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