Taking Another Look at the Fiscal Speed Bumps Ahead
With a deal on the appropriations bill last week, the government has been reopened and a default has been avoided. But the reality is that lawmakers do not have too long before the next budget deadlines draw near.
The budget conference committee has set an informal deadline on December 13 to report its recommendations to Congress. While there is no penalty for missing this deadline, symbolically it serves as our next "fiscal speed bump." On January 1, Medicare provider payments will be cut by 24 percent unless a "doc fix" is enacted, the farm bill will expire and prices will revert back to 1949 law, the unemployment benefit expansion will expire, and some "tax extenders" will sunset. While not quite the fiscal cliff we saw last year, Congress clearly has work to do.
We could also find ourselves back in a government funding and debt ceiling debate in early 2014. The continuing resolution will expire on January 15, at the same time a so-called "second sequester" will go into effect on non-exempt other mandatory spending and Medicare spending. While the debt ceiling is reinstated on February 8th, extraordinary measures should be able to prevent a default until late Febraury or early March, although the exact date is uncertain.
Of course, all of these are manageable if lawmakers can start budgeting and stop the crisis-to-crisis cycle we've seen over these past few years. This is why the budget conference beginning next week is so important. Hopefully, lawmakers can use this opportunity to come together and deal with these deadlines in a fiscally-responsible way.