Government Funding Deadline Looms, Draws Concern for Debt Ceiling
Having postponed the decisions earlier in the year, lawmakers now need to fund the government beyond the current December 3 deadline as well as raise the debt ceiling to avoid a default.
Besides pushing Joe Biden's $1.9 trillion reconciliation bill, the Build Back Better Act, which passed the House in mid-November, the Senate Democratic leadership also expects to make progress on the National Defense Authorization Act (NDAA), which must pass each year for defense policy.
Senate Majority Leader Chuck Schumer (D-NY) and Senate Minority Leader Mitch McConnell (R-KY) met November 18 for the first time since January, after which Senator Schumer agreed to decouple the NDAA from the U.S. Innovation and Competition Act (USICA), the NDAA's path forward may be relatively smooth, though laborious.
Despite their demands for consideration of more amendments to the annual Pentagon policy measure, Senate Republicans failed in their effort to end debate on the NDAA by 45-51 on November 29.
With this setback, the defense authorization bill could be delayed even further than it has already been, potentially derailing 60 years of traditionally bipartisan legislation. The NDAA has been passed by Congress every year for more than six decades, even over a veto from former President Donald Trump, which Congress overrode by a wide margin.
As the House and Senate will need to reconcile their bills, there is a short amount of time left for Congress to send the measure to President Biden for his signature before the expiration date of December 31.
As the government's debt ceiling is also in question, short-term funding extensions were approved this fall, but it's unclear if lawmakers can agree on a spending bill before December 3, and Senate Republicans have already hinted that debt ceiling increases might not be supported.
As previously reported in FEDmanager, lawmakers passed a continuing resolution on September 30 to avoid a government shutdown that expires on December 3. A final omnibus spending bill is unlikely to be passed before the deadline, however.
A possible alternative could be another continuing resolution (CR), which could fund the government through January or later while giving Congress some extra time to prepare its 2022 appropriations bill. If lawmakers opt for a stopgap measure, funding the government a few weeks in December might help force Congress to come to an agreement about the full appropriations bill, or at least to give them some time until they pass another stopgap measure until next year.
According to OMB, a full-year CR rather than passing appropriations bills would create a staff shortage at the Social Security Administration (SSA) and would delay 114 new military construction projects at the Department of Defense (DOD). Further, the Centers for Disease Control and Prevention (CDC) would lose $1.6 billion in funding, and the Department of Agriculture (USDA) would have difficulty maintaining enough Food Safety and Inspection Service (FSIS) employees at its meat and poultry plants.
As the December 15 deadline approaches, Congress must also address raising the debt ceiling. Treasury Secretary Janet Yellen wrote to congressional leaders that the government could reach the debt ceiling by December 15, and it would not have the resources to continue financing our government after that date. Congress raised the debt limit by $480 billion in October, so the Treasury had enough funds to operate until the deadline.
Even though it has come close, the United States has never defaulted on its debt, and economists believe it would have catastrophic effects, including reversing the progress of recovery from the pandemic, killing millions of jobs, raising borrowing costs, and causing the global economy to collapse.
