Congressional Fiscal Triple Play or Strike Out?
Call it an unholy trinity, a bad hat trick, a fiscal triumvirate, or a three-pronged cluster…no matter how you look at it, Congress has three big fiscal issues to tackle in a very short period of time: the impending October 1 start of the federal fiscal year (FY 2014 for those who like budget speak), the expiration of the nation’s borrowing authority (aka debt ceiling) in mid-October, and those ongoing across-the-board cuts (that kooky “sequestration” we have been living under), which everyone would like to replace or otherwise retire or tweak in some way, shape, or form.
All this and only nine Congressional working days left in the month of September.
Given the truncated timeline, it is likely Congress will enact a short term, stop-gap spending measure (known as a continuing resolution) that generally will keep the government operating until policymakers can (maybe) come to broader agreement on the 12 individual appropriations bills that are supposed to be enacted to fund the federal government. Long gone are the days of “regular order” appropriations, when bills were agreed to by both chambers and signed by the president on – or actually before – September 30. The new “regular” order is enactment of continuing resolutions and missed deadlines.
The additional pressure of the government soon bumping up against the debt ceiling – the Treasury’s borrowing authority – means policymakers are likely to try to link the various fiscal issues together and start horse trading. Although the deficit is smaller than it was at the start of this fiscal year, discretionary and mandatory spending outlays are decreasing, and more is coming into the Treasury than before, overall federal spending still outpaces income and elected officials maintain fundamentally different views regarding the role and size of government. And none of this changes the fact that 10,000 people a day turn 65 and become eligible for Social Security and Medicare – two of the largest slices of the federal pie that are demographically poised to crowd out other spending. So, not to be forgotten in the federal fiscal mix is entitlement reform – but we (like Congress) will tackle that another day.