Bloomberg News

Congress Should Avoid Government Budget Fight, Reid Says

July 26, 2012

Senate Majority Leader Harry Reid said he wants to pass a stopgap funding measure to fund U.S. government operations through the beginning of 2013.

“My preference is to do something that would alleviate this spending issue,” the Nevada Democrat told reporters today. He said conversations were taking place “at a high level in the House and Senate” over how to fund the government.

The Democratic-led Senate and Republican-led House face the prospect of extending government funding with a stopgap measure, known as a continuing resolution, because Congress hasn’t agreed on any spending bills for the 2013 fiscal year that starts Oct. 1.

In the House, a group of Republicans is calling for Speaker John Boehner to schedule a vote next week to fund federal government operations through March, while others want a shorter measure.

Reid didn’t specify the length of a stopgap measure he would favor.

Representative Joe Walsh of Illinois said today that he supports a six-month funding measure because it would deny Democrats who control the Senate “a cudgel” to use against Republicans in a post-election, lame-duck session. Walsh is among the Republicans who asked Boehner to schedule a vote next week.

“Just move it beyond the lame duck, move it into the next administration,” Walsh, a freshman, said at a Bloomberg Government breakfast. “It would certainly be my hope, and I think the hope of a lot of House conservatives, that we avoid the danger of a lame-duck session.”

Lower Spending

Walsh said that to pass a funding measure now, he and other Tea Party-backed Republicans would be willing to drop demands for a spending level lower than the $1.05 trillion in the 2011 law that raised the federal debt ceiling.

Representative Tim Huelskamp, a freshman Republican from Kansas, said some House Republicans are willing to surrender their long-standing demands for an additional $19 billion in discretionary spending cuts.

“We can stomach that,” Huelskamp said. “Let’s get the budget done for six months and then see what happens in the election. To have a lame-duck Congress and, potentially, a lame- duck president deciding that -- I think most Americans would say ‘No.’”

A budget blueprint that House Republicans passed earlier this year calls for an additional $19 billion in discretionary spending cuts, complicating efforts to complete the annual spending bills.

No Decisions

No final decisions have been made about when the House will consider a stopgap funding bill or the length of a funding measure, Boehner told reporters today.

“We’re considering lots of things,” the Ohio Republican said.

South Carolina Senator Jim DeMint, a co-founder of the Senate’s Tea Party caucus, said yesterday that it would be “an extreme failure of leadership” if the House doesn’t pass a six- month spending bill next week.

“The levels are not as important now,” DeMint said. He said it was more important to deprive Senate Democrats of leverage in using a stopgap funding bill during the lame-duck session as a vehicle for “a lot of other bad legislation.”

Not all Republicans support a stopgap plan. Some members of the House Appropriations Committee, which has crafted legislation establishing budget levels for individual programs, oppose putting the government on autopilot for half of its fiscal year.

Appropriations Cycle

“I don’t think agencies like it and we don’t like it,” said Representative Jack Kingston, a Georgia Republican and chairman of the spending subcommittee that oversees farm programs. Kingston prefers a measure lasting until December and said an extension through March “cuts into next year’s appropriations cycle.”

“If you have a long, lingering, leftover budget issue then that slows everything up,” he said.

Walsh said today that acting now would let lawmakers try to bridge a partisan divide over extending the George W. Bush-era tax cuts, which expire Dec. 31, before the November election.

“If that means that even people like me, who are in a pretty contested race, have to work in September and October and some of the senators in tough races have to work in September and October, so be it,” he said.

Tax Cuts

The House will vote next week on legislation that would extend the expiring tax cuts for all income levels for one year, and on a measure that would set up a process for overhauling the tax code in 2013. Boehner said today the House will also vote on a Democratic tax-cut proposal.

“I don’t know that there’s a consensus among House Republicans to extend them for a year,” Walsh said, adding that he and other Republican lawmakers are “pretty tired” of yearlong extensions of tax policy.

The tax provisions are part of the $607 billion so-called fiscal cliff of automatic spending cuts and tax increases scheduled to take effect in January 2013. If Congress doesn’t act, the combination of those fiscal changes would probably push the U.S. economy into a recession, according to the Congressional Budget Office.

Walsh said he would be “surprised” if lawmakers don’t strike a deal to avert the automatic cuts.

Farm Programs

Also, rather than pass a multiyear bill setting farm policy, Walsh said the House probably will pass a one-year extension before farm programs expire Sept. 30.

“That seems to be where people are lining up,” he said.

The five-year farm bill that the Senate passed in June has been criticized by House Republicans who say it includes too much money for food stamps and doesn’t do enough to overhaul farm policy.

Walsh said he would support including emergency assistance for farmers affected by this year’s drought in the stopgap funding measure he wants the House to take up next week.

To contact the reporter on this story: Kathleen Hunter in Washington at khunter9@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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