Time is Running Out On the FY 2012 Budget
Update: The House has passed a CR Friday morning by a 219-203 vote. The new CR garnered more Republican votes by including $100 million more in offsets. The Senate will most likely reject this version.
Although it had been expected to pass the House, the FY 2012 CR that would have funded the government at the level of the Budget Control Act cap of $1.043 trillion through November 18 was defeated by a coalition of Democrats and conservative Republicans 195-230. Almost all Democrats voted against the bill and 48 Republicans joined in defeating the CR.
The sticking point for Democrats concerned disaster relief. The bill provided $3.65 billion for disaster relief, which was partially paid for by cutting $1 billion from the Advanced Technology Vehicles Manufacturing Loan Program, a Department of Energy loan program to automakers for developing (you guessed it) advanced technology vehicles, especially with regards to energy efficiency. Democrats decried the specific offset, but there are also general differences over the need to offset the disaster aid in general and the amount of aid that was included (the Senate passed a $6.9 billion bill that was not offset). You know our position on paying for disaster relief.
However, there is no word yet on how the House will proceed next. This vote showed that Republicans will need at least some significant Democratic support for a CR to offset the conservative members they are losing. Obviously, either they will have to find a more agreeable offset or drop the offsets altogether.
There is only a week left for the Congress to pass some sort of funding agreement before there will be a government shutdown, and there will need to be a bill that gets past both chambers. It should not be difficult to work out the differences, given that lawmakers already agreed to this topline discretionary level for FY 2012 in the BCA, but let's hope it happens quickly.
In April, the government almost shut down over a difference of a couple of tens of billions, and that seemed silly at the time given the magnitude of our fiscal challenges and the need for trillions in savings. It would be even less understandable over a difference of a few billion. Let's hope lawmakers reach an agreement very soon on next year's spending levels so that we can start the real work of working on reforming entitlement programs and the tax code.