Why you should care
Congress is effectively taking another government shutdown off the table for the next two years, but there are a number of other spending spats teed up for next year that could affect key segments of the U.S. economy.
The Senate is poised to approve a deal tonight that has commentators hailing an end to the budget brinkmanship that has largely ground Washington, D.C., to a halt since 2010.
Well, yes and no.
It leaves questions on long-term fiscal threats like Social Security costs and the tax code for another day…
The bipartisan agreement, drafted by Democratic Sen. Patty Murray of Washington and Republican Rep. Paul Ryan of Wisconsin, would set Congress on course to fund the U.S. government through regular spending procedures — a basic legislative function but one that lawmakers haven’t been able to perform in the last several years — for the 2014 and 2015 fiscal years. It also raises the government spending caps that had been put in place under the sequester deal by $63 billion over two years, split evenly between defense and non-defense programs, replacing, as Murray said Tuesday, “these meat-ax cuts with smarter, more balanced savings.”
But the budget deal is far from the sort of “grand bargain” that political leaders in Washington once dreamed of reaching, leaving questions on long-term fiscal threats like Social Security costs and the labyrinthine tax code for another day. It also fails to address some short-term spending decisions related to Medicare and the deficit that could prompt new political showdowns in 2014.
Here’s a look at the looming deadlines Congress faces even after it sends the Bipartisan Budget Act of 2013 to the president’s desk later this week – mark your calendars.
December 28, 2013
The expiration date for federal unemployment benefits, which will affect a reported 1.3 million people who have been unemployed for more than six months. Senate Majority Leader Harry Reid has already promised to try and renew the insurance program when Congress returns in the new year, but Republicans are insisting on spending offsets elsewhere.
January 15, 2014
The day funding for the federal government runs out under current authorities. The budget deal, you see, only sets the parameters for government spending for the next two fiscal years. It doesn’t actually give the various branches and agencies of the federal government any money. That’s the work of Congress’ appropriations committees, who still have to write their spending bills for the rest of fiscal 2014. It’s a challenging task in the best of times, which they’re now scrambling to get done in just a month’s time. (Or, at least their staffs will. Lawmakers head off on recess soon.)
February 7, 2014
The final day the U.S. debt ceiling can be suspended, allowing the Treasury to continue borrowing money, per the agreement Democrats and Republicans reached to reopen the government in October. Experts at the Congressional Budget Office estimate that the Treasury Department can continue its borrowing activities through its use of so-called “extraordinary measures” until sometime between March and June of 2014. But if a new agreement to raise the debt ceiling isn’t reached by then, the United States again risks defaulting on its debt. And Ryan suggested in an interview on Fox News Sunday that Republicans were prepared to put up a fight on a new debt limit.
April 1, 2014
Medicare payments to doctors will drop by more than 20 percent. Congress has blocked this rate drop each year since 2002, because of objections from doctors to the reimbursment formula – part of a 1997 law that, according to Roll Call, was meant to ”help curb the growth rate of Medicare spending.” Congress members have been making progress this year on a more permament solution than what is known in Washington as the annual “doc fix” measure, and they convinced budget negotiators to delay the rate hike by three months while they try to reach a bipartisan agreement. But serious gaps remain, most prominently how to pay for new rate increases.
The year Social Security’s trust fund reserves will run out, according to the latest estimates from the Social Security and Medicare Boards of Trustees. ”Thereafter, tax income would be sufficient to pay about three-quarters of scheduled benefits through 2087,” the trustees write in their 2013 report.
Ryan himself acknowledged on Meet the Press on Sunday that budget negotiators didn’t touch issues like Social Security or long-term debt that loom on the fiscal horizon. ”We’re not saying this is a massive agreement,” he said. ”It just gets government working.” At least for now.