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Government shutdown avoided, bigger fights coming

“This bill is not perfect,” House Speaker John Boehner said. “It is no cause for celebration. It is just one step.”

New York Times

“This bill is not perfect,” House Speaker John Boehner said. “It is no cause for celebration. It is just one step.”

WASHINGTON — Congress voted Thursday to keep the government financed through September, putting an end to a raucous first skirmish in this year's showdown between Democrats and Republicans over federal spending while presaging bigger ones to come.

Scores of House Republicans deserted their leadership to vote against the bill, which cut $38 billion in spending, saying it did not go far enough. As a result, Speaker John Boehner was forced to rely on large numbers of Democrats to pass the measure, which subsequently sailed through the Senate, 81 to 19. Florida's Democratic Sen. Bill Nelson voted yes; Sen. Marco Rubio, a Republican, voted no. President Barack Obama is expected to sign the bill today.

House Republican leaders had repeatedly defended the bill, the product of a bipartisan compromise last week less than two hours before the government would have shut down. They said that while it fell short of their goal of cutting $61 billion from spending this year, it nonetheless established the principle that the budget would have to be substantially reined in.

"Is it perfect?" Boehner, R-Ohio, said on the House floor. "No. I'd be the first to admit it's flawed. But welcome to divided government."

The House vote was 260 to 167, with 59 Republicans breaking ranks to vote against the deal. Among those 59 were five Floridians, including Rep. Steve Southerland, who told the St. Petersburg Times earlier this week the deal "just didn't go far enough.''

Southerland of Panama City was among the 27 Republican freshmen who voted against the bill. The other 60 voted in favor of it.

The large number of defections highlighted the challenge facing Boehner as he tiptoes between conservatives who ran on a shake-it-up agenda and the limitations of what the House can do when Democrats control the Senate and the White House.

Yet for all its last-minute drama and attendant partisan theatrics, the bill — made necessary after Democrats failed to pass a 2011 budget in the last Congress — was just an opening act for more consequential battles to come before this Congress.

Starting on 2012

Thursday's vote was the precursor to an expected vote today in the House on a budget blueprint for the next fiscal year that will call for a sea change in the structures of the giant Medicare and Medicaid programs, a measure almost certainly dead on arrival in the Democrat-controlled Senate. That fight, in turn, could be linked to the politically and economically explosive question of whether to approve an increase in the federal debt ceiling, a step many conservatives say they will resist unless Obama and his party agree to deep spending cuts for 2012 and beyond.

A mutual desire to avoid a crippling government shutdown led Democrats and Republicans to scratch their way toward a deal this time, but the far more difficult task of reducing government spending in a legislature divided in ideological factions will be far more difficult, especially as the 2012 election edges closer.

Almost immediately after the vote, the House moved right into a rowdy debate over the 2012 budget plan written by Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman. Ryan says his plan would reduce projected annual deficits by a cumulative $4.4 trillion over the next decade through further cuts in discretionary spending programs and by turning Medicare into a "defined benefit," replacing the current system with one in which older Americans would choose among private insurance plans. Those plans would be paid for by the government, up to preset limits. Ryan also wants to turn Medicaid into a block grant program and to reduce the tax rates for corporations and individuals.

The White House is seeking to keep the debate over the 2012 budget separate from the need to raise the debt ceiling in coming months. But many Republicans see the necessity of raising the debt limit as the best leverage they have to extract concessions from the administration and Senate Democrats, setting up months of brinkmanship this spring and summer.

"The president has asked us to raise the debt ceiling," said Sen. Mitch McConnell of Kentucky, the Republican minority leader. "Republicans, and I hope many Democrats as well, will say, 'Mr. President, as a condition for raising the debt ceiling, you'll need to agree to do something significant.' And by significant, I mean something the markets view as significant, the American people view as significant, and foreign countries view as significant."

Deal cuts little

A Congressional Budget Office analysis further dampened enthusiasm for the budget compromise when it revealed that instead of saving $38 billion, the deal would reduce federal spending by only $352 million this fiscal year, less than 1 percent of the bill's advertised amount.

The analysis found that $13 billion to $18 billion of the cuts involve money that existed only on paper and was unlikely to ever be tapped.

The problem — in the murky mathematics of the federal budget — is that not all "spending" is really spending.

Agencies do not have their own checking accounts, fattened up every year with new money from Congress.

Instead, Congress usually gives agencies the authority to draw from the Treasury's General Fund, which is constantly taking in taxes, fees and borrowed money. The agencies can't take money out of this fund until they're ready to spend it.

And that's where it becomes complicated.

Sometimes, agencies aren't ready to spend the money until a year, or longer, after Congress gives them their IOU. That's not a problem when an agency makes a one-time purchase for something like pencils. Officials call a supplier, get their pencils, write a check and the money is gone.

But it works differently when the government buys an aircraft carrier.

"The final check doesn't go out until the carrier has gone through sea trials," said Scott Lilly, a budget expert at the liberal Center for American Progress. "And that's about six years later."

The compromise bill has canceled some of these long-term IOUs. These are real cuts, experts say: They stop spending that was going to happen. But they aren't counted in the current fiscal year, because the money was going to be spent later.

That's part of the reason why just $352 million in the cuts will be felt during fiscal 2011. In fact, when "emergency" money for military action is factored in, the overall spending for this fiscal year may actually increase, by more than $3 billion.

In other cases, IOUs were sitting idle and unused.

This might be because a project was finished under budget, with some money left over. It might also be because a project was canceled, or because an agency simply chose not to do something that Congress gave it money to do.

The result is leftover budget authority. Some expires at the end of the fiscal year. But other IOUs roll over, which can leave agencies with rainy-day funds with billions in theoretical money.

The compromise bill canceled some of these IOUs, too. But, experts say, these shouldn't count like the others: It's not exactly a cut if the money was never going to be spent.

Information from the Washington Post was used in this report.

>>How they voted

The House voted 260-167 to approve the funding plan for the rest of fiscal 2011.

Gus Bilirakis,

R-Palm Harbor
Yes
Richard Nugent,

R-Spring Hill

Yes
Dennis Ross,

R-Lakeland

No
C.W. Bill Young,

R-Indian Shores

Yes
Vern Buchanan,

R-Sarasota

Yes
Kathy Castor,

D-Tampa

Yes

Government shutdown avoided, bigger fights coming 04/14/11 [Last modified: Friday, April 15, 2011 12:03am]

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