Congress Passes Short-Term Spending Bill to Avert Shutdown

Congress Passes Short-Term Spending Bill to Avert Shutdown

Johnson relied on Democrats to pass the spending patch.
Sipa USA
By Yuval Rosenberg and Michael Rainey
Thursday, January 18, 2024

Good evening! Congress passed a bill this afternoon to avert a shutdown this weekend — and it did so with a whole day to spare before the deadline, giving lawmakers time to clear out of the capital ahead of a dusting of snow forecast for Friday.

Here’s the latest.

Shutdown Averted as Congress Passes Short-Term Spending Bill

Our nation’s capital famously freaks out at the sight of more than a few snowflakes, so a weather forecast calling for an inch or two of snow to fall on Washington, D.C., by Friday morning sent lawmakers scrambling on Thursday to pass the short-term spending bill needed to avert a partial government shutdown this weekend.

The Senate on Thursday afternoon approved the stopgap measure by a 77-18 margin, sending the bill to the House, where it was quickly passed, 314-108, despite the opposition of hard-right conservatives who had unsuccessfully pressed Speaker Mike Johnson to amend the legislation to include Republican border policy changes.

To bypass conservative objections that could have derailed the bill, the House vote came under suspension of the rules, meaning a two-thirds majority was required to pass it. That hurdle was easily cleared, as 207 Democrats joined with 107 Republicans in supporting the bill, while 106 Republicans and two Democrats opposed it.

Johnson had said last year that he was done with short-term spending packages, but he agreed to this one — and relied on Democratic votes to pass it — to avoid having Republicans bear the blame for a disruptive shutdown during an election year and to give appropriators more time to finish writing their annual spending bills. Johnson said in a statement early this week that the short-term funding patch “is required to complete what House Republicans are working hard to achieve: an end to governance by omnibus, meaningful policy wins, and better stewardship of American tax dollars.”

Two new deadlines: The bill will keep the government open and set up two new deadlines, with some agencies funded through March 1 and the rest through March 8, providing six or seven weeks, respectively, for appropriators to continue drafting spending bills totaling $1.66 trillion for the 2024 fiscal year that started back in October. Lawmakers are looking to finish the appropriations process ahead of an April deadline that would otherwise require across-the-board 1% spending cuts.

“Once we put the threat of a shutdown behind us, I hope we continue seeing even more bipartisanship as appropriators complete the very important task of fully funding the government in the coming weeks,” Senate Majority Leader Chuck Schumer said. “This is what the American people want to see: both sides working together and governing responsibly. No chaos. No spectacle. No shutdown.”

Schumer went on to criticize the House conservatives who opposed the stopgap, calling them “a loud contingent of hard right rabble-rousers who, amazingly, believe that causing a shutdown is somehow a good thing, if it gets them what they want.”

What’s next: President Joe Biden is expected to sign the continuing resolution before the Friday night deadline. Appropriators still have much work to do to finalize the details of the 12 annual spending bills, and Johnson will face the fury of GOP hardliners who are demanding he push for some conservative wins, including border measures and abortion restrictions that Democrats call poison pills. While the spending bills are negotiated and drafted, lawmakers are expected to turn their focus to the border deal being negotiated in the Senate to unlock a supplemental spending package including aid for Ukraine and Israel.

Quote of the Day

“I think the vast majority of members of Congress support aid to Ukraine. The question is whether or not a small minority are going to hold it up, which would be a disaster.”

President Joe Biden, asked about the outlook for further aid to Ukraine after yesterday's White House meeting with congressional leaders.

House Budget Committee Approves Bill to Create Bipartisan Fiscal Commission

The House Budget Committee on Thursday approved a landmark bill to create a bipartisan fiscal commission that would make recommendations on how to address the rising national debt.

The commission has been a priority for Republicans and has divided Democrats, many of whom warn that it would open the door to Social Security and Medicare cuts. Thursday’s 22-12 committee vote saw three Democrats join with Republicans to support the bill.

“As stewards of taxpayer dollars, Congress has a moral responsibility to future generations to stop the madness and bring spending under control,” Speaker Mike Johnson, a Louisiana Republican, said in a statement. “Today’s vote by the Budget Committee to establish a fiscal commission is a positive step towards fiscal sanity.”

Rep. Brendan Boyle of Pennsylvania, the top Democrat on the budget panel, has argued that the commission would be used as “a backdoor way to force through unpopular cuts” to entitlement programs and that lawmakers need to have the courage to raise the revenues going to Social Security and Medicare. “We can put both trust funds on the path to full solvency for the rest of this century,” he said Thursday. “We don't need a commission to do that.”

What the bill would do: The Fiscal Commission Act would create a 16-member panel including 12 members chosen from both parties and both chambers of Congress as well as four outside experts who would not have voting power. It would look for ways to balance the federal budget “at the earliest reasonable date,” stabilize the nation’s debt-to-GDP ratio at or below 100% within 10 years and propose plans to improve the long-term outlook for Social Security and Medicare.

Tax Package That Boosts Child Credit and Business Deductions Would Be Fully Offset: JCT

A proposed tax package that would temporarily boost the child tax credit while providing more generous deductions for business investments would be fully paid for by the early elimination of a pandemic-era employee retention credit, the Joint Committee on Taxation said late Wednesday.

The combination of tax cuts in the Tax Relief for American Families and Workers Act of 2024, which would expire after three years, would reduce revenues by $79 billion, JCT said. Limiting payouts from the troubled Employee Retention Credit program, which paid businesses that kept employees on their payrolls during the pandemic, by ending the program in January rather than on April 15, 2025, would fully cover that loss in revenue.

Specifically, the increase in the child tax credit would cost about $33 billion over three years, JCT said. The business tax breaks, which include more generous deductions for research and development costs, as well as depreciation, would cost about the same. A handful of miscellaneous provisions covering disaster relief and low-income housing construction add another $13 billion, bringing the total projected revenue loss to $79 billion.

Low-income households would benefit most: An analysis by the Urban-Brookings Tax Policy Center found that about half of all households with children in the lowest 20% of the income distribution would get a tax cut from the legislation, while just 2.6% of those in the middle quintile would benefit. Overall, 16.6% of households with children would get a tax cut. Among households that would benefit, the average tax cut would come to $680 in 2023.

The Tax Policy Center has not yet provided a distributional analysis of the business tax cuts, although it has done so in the past on a similar proposal, when the changes were thought to be permanent rather than temporary. The American Prospect’s David Dayen said Thursday that Republicans appear to be assuming that the business tax cuts will be made permanent in the end (which is how House Ways and Means Chair Rep. Jason Smith could assert that the bill “locks in over $600 billion in proven pro-growth, pro-America tax policies,” rather than $33 billion, as the JCT reports.)

If that’s the case, then the business tax cuts in the proposal will likely cost far more than projected; an analysis by the Committee for a Responsible Budget estimated the 10-year cost of fully extended business tax cuts would come to about $525 billion over 10 years.

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