Inside (the Beltway) Scoop

By | September 9, 2015

Congress Returns From Recess; White House Outlines Priorities for Continuing Resolution; Debt Ceiling Will Be Reached by December; New Report Finds Deficit is Shrinking

Congress returned to Capitol Hill this week to confront a series of high priority domestic and international policy issues that will dominate the fall legislative agenda. Funding government agencies beyond the end of the fiscal year on September 30 is at the top of the list, as Senate Majority Leader Mitch McConnell (R-KY) acknowledged in an interview on a Kentucky television program on August 30. Noting that the Senate did not complete consideration of the fiscal year (FY) 2016 appropriations bills, McConnell said he would work with the White House and others “to try to sort out how much we’re going to spend and where we’re going to spend it.” Reaching consensus on raising the spending caps and what to do about sequestration are two of the biggest problems that will need to be resolved by Congress and President Obama.

To keep government agencies open while they negotiate a final budget agreement for FY 2016, lawmakers are expected to pass a continuing resolution (CR) that will remain in effect through the fall. On August 21, the White House Office of Management and Budget (OMB) sent the House and Senate Appropriations Committees a list of “anomalies” the Obama administration would like to see included in the CR. Anomalies are items that will need more than an extension of current funding, such as renewed authorizations for federal programs that are due to expire while the CR is in effect. None of the anomalies requested by OMB affect the science agencies, which will operate at current funding levels until a budget is passed.

The looming debt ceiling could further complicate budget discussions. Over the August break, the Congressional Budget Office (CBO) issued a report predicting that the United States will reach its current borrowing limit—known as the debt ceiling—by the end of November or early December. At that point, the government will no longer be able to borrow additional money to fund its operations. A vote to increase the debt ceiling will be necessary to prevent the United States from defaulting on its obligations. Given that lawmakers have not had to vote on the debt ceiling since 2014, Senators and Representatives elected last November will be facing this issue for the first time. The White House indicated that President Obama believes the debt ceiling should be raised without any conditions. In previous years, congressional Republicans insisted that any increase in the debt limit be accompanied by spending cuts, although it is not clear if they will make that same demand this time around.

Concern about the deficit is another issue that will affect spending considerations. A new estimate from CBO determined that the deficit for FY 2015 is shrinking and is projected to be just 2.4 percent of Gross Domestic Product (GDP)—the lowest level in eight years. CBO also noted that this is the “sixth consecutive year in which the deficit has declined as a percentage of GDP since it peaked in 2009.” This good news is balanced by CBO’s finding that the deficit will begin to rise again over the next few years unless Congress changes current laws.