Congress avoids one fiscal cliff; heads toward two more
February 8, 2013
Congress recently avoided one fiscal cliff, but is barrelling toward two more.
President Obama on Monday signed into law legislation, H.R.
325, to raise the nation’s debt ceiling through May 18. The Senate on Jan. 31 voted 64 to 34 to approve the legislation, following House passage of the measure on Jan. 23.
The legislation permits the Treasury Department to keep borrowing and lifts the threat of a government default until early August. H.R. 325 also requires each chamber of Congress to pass a budget resolution for fiscal year 2014 by April 15 or risk having its pay withheld.
On May 19, the debt limit will kick back in and automatically reset at a higher level, reflecting the additional borrowing. Treasury officials can then begin taking what they call “extraordinary measures” to continue paying the nation’s bills.
Congress faces two additional deadlines. On March 1, acrossthe- board spending cuts affecting defense and social programs kick in after a two-month delay agreed to in the year-end “fiscal cliff” deal. The cuts include a 2% annual reduction in Medicare funding.
On March 27, the funding for the government will run out, raising the risk of another shutdown fight. Congress is preparing for the annual budget process. House Budget Committee Chairman Paul Ryan, R-WI, has pledged a blueprint that will balance the budget in 10 years. Senate Budget Committee Chairwoman Patty Murray, D-WA, has pledged the Senate will pass a budget plan this year – the first since 2009. For more on what’s ahead see the table below.