Tuesday, August 30, 2011

Happy New Year – Federal Government’s Year Starts Oct. 1

Maybe There Won’t Be Fireworks

Happy New Year Oct. 1 America
Maybe No Budget Fireworks This Year

The Dismal Political Economist had earlier posted about the federal government having just concluded a deficit reduction/debt ceiling increase agreement was getting only a short reprieve from budget battles.  The reason was that the new fiscal year for the federal government starts October 1 and there is no approved budget or spending plan in place.

The question facing legislators is whether or not to enter into a new battle over federal spending, with the Republicans, particularly House Republicans possibly shutting down the government in order to force lower spending for fiscal year 2012 (which as we have to remind everyone starts October 1, 2011).

The recently concluded deficit reduction/debt ceiling agreement is supposed to have settled things for 2012 and 2013.

In the debt limit bill, Congress allotted $1.043 trillion for spending on federal agencies and national security in 2012, an amount that does not include money for so-called mandatory programs like Medicare.

 That level is $7 billion less than current spending, but $24 billion more than would be allowed under the budget drafted by Representative Paul D. Ryan, Republican of Wisconsin, and passed by House Republicans earlier this year. The ceiling rises to $1.047 trillion in the 2013 fiscal year, potentially saving Congress from another politically charged spending fight

Of course, nothing is ever settled in Washington. 

While the new agreement is expected to accelerate consideration of spending measures, the shortage of time means the House and the Senate will probably have to again enact temporary stopgap measures to give lawmakers a chance to assemble the bills and bring them to the floor.

At the same time, some conservative activists are pressing House Republicans to insist on lower overall spending totals, noting that the debt limit legislation established ceilings but does not require that all the money be spent.

But at this point the Republican House leadership appears on board to work with the agreed upon limits.  The fact that Congressional approval is at 12% and falling may have something to do with it.

 But after Jan. 20, 2013, look out, anything goes.

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