House Rejects Spending Bill, Government Shutdown Looms
(By Emily Knapp, Wall Street Cheat Sheet, September 22 2011)
The U.S. House of Representatives rejected a bill to fund the government through November 18 on Wednesday, without which the government’s spending authority will stop at the end of September. Democrats rejected the bill because it required cuts in programs in order to pay for aid to victims of Hurricane Irene and other disasters, while Republicans rejected the bill because they considered its level of aid spending to be too high.
Lawmakers have little time to resolve the impasse, as they are expected to recess Friday for the Jewish holiday of Rosh Hashana next week. Democratic Senator and Majority Leader Harry Reid has said that the GOP-led House is essentially “threatening to shut down the government to get what they want.”
Michael Steel, a spokesman for Republican and House Speaker John Boehner, said “We continue to work on a responsible plan that can pass the House.” Meanwhile, House Minority Leader Nancy Pelosi has said that the rejection of the Republican approach left the GOP leaders with few options. “Now it’s time to pass the Senate disaster aid bill,” she said in a Twitter post.
While disaster relief tends to draw bipartisan support, this year Republican leaders insisted that any emergency spending be offset by cuts elsewhere. After a year rife with natural disasters, the Federal Emergency Management Agency is running low on funds, and could run out as soon as Monday. FEMA has already put longer-term building projects on hold while focusing its few remaining resources on providing food and water to disaster victims and removing debris.
Republicans wanted to fund FEMA with moneys from a program for alternative-energy vehicle manufacturing, but Democrats opposed funding cuts for the program because they said it had the potential to create green jobs. “It’s with great sadness that we even have to have a debate about it,” said Pelosi.
Boehner urged his fellow Republicans to pass the bill, saying that failure to do so would only make it more difficult to achieve the level of spending Republicans wanted. Only an hour before the vote, GOP leadership did not know whether or not the bill would pass. Democratic leadership urged its rank-and-file members to vote against the bill — only six Democrats voted for the measure, which failed, 195 to 230.
Debt Deal Comes Back to Haunt Boehner in Disaster Aid Fight
(Brian Faler and Laura Litvan, Bloomberg News, September 22, 2011)
House Speaker John Boehner once again is facing a rebellion of rank-and-file Republicans over spending with a government shutdown looming.
This time it's a disaster assistance bill that includes a stopgap budget measure needed to keep the government running into next month.
Tea Party-backed freshman and veteran lawmakers helped kill the measure yesterday because they said it spends too much -- a problem for Republican leaders with a bill intended to implement budget levels agreed to last month as part of a compromise to raise the debt ceiling.
"Speaker Boehner has a true governing problem" on his hands, said Sarah Binder, a senior fellow at the Brookings Institution in Washington. "There are two dozen House Republicans who have voted against the April budget deal, the August deficit deal and the continuing resolution."
Lawmakers have little time to work out an agreement because the Federal Emergency Management Agency says it needs additional funding to aid victims of Hurricane Irene by Sept. 27. The rest of the government will run out of money Sept. 30 and Congress plans to be out of session next week for Rosh Hashanah, the Jewish new year. House Majority Leader Eric Cantor, a Virginia Republican, said lawmakers may have to work into this weekend to find an agreement.
"We're watching the Tea Party shut-down movie for the third time this year," said Senator Dick Durbin, the chamber's second-ranking Democrat. "The American people are fed up with this strategy."
Boehner, an Ohio Republican, said at a news conference there is "no threat" of a government shutdown and Republicans will meet today on a revised spending plan.
"I have no fear in allowing the House to work its will," Boehner told reporters. "Does it make my life a little more difficult? Yes it does."
The dispute carries political risk for Republicans because polls show the public is weary of the rancor that marked previous battles over the budget. Disapproval ratings for Congress are at historic highs, and Republicans are faring worse than Democrats in polls.
In a Sept. 10-15 CBS News/New York Times poll, 72 percent of adults surveyed disapproved of the job performance of Republicans in Congress and just 19 percent approved. Democrats had a disapproval rating of 63 percent and an approval rating of 28 percent. The poll of 1,452 adults had a margin of error of plus or minus 3 percentage points.
The higher disapproval ratings for Republicans stem largely from perceptions that Boehner and other party leaders are unwilling to compromise with Democrats on key issues, said Michael Dimock, research director of the Pew Research Center.
"Welcome to my world," Boehner told reporters when asked about the political risks of alienating the most conservative members of his caucus by trying to court Democratic votes. He said Republicans who voted against the spending measure were forcing their party leaders to seek Democratic support, thus increasing the price tag.
"They could vote no, but what they are in essence doing is they are voting to spend more money because that's exactly what will happen," Boehner said.
Republican leaders have been trying to shift toward an emphasis on job creation, rather than spending cuts, and to show a willingness to work with the administration since Congress returned from its August recess.
"The two sides have demonstrated real differences as far as cutting spending is concerned," Cantor told reporters earlier this week. "We're going to focus on where we can come together."
Stocks tumbled and Treasury 10-year yields dropped to a record amid concern central banks are running out of tools to prevent another recession. The Dow Jones Industrial Average lost 476.35 points, or 4.3 percent, to 10,648.49 at 2:05 p.m. Ten- year Treasury yields fell to 1.7519 percent, the lowest since Federal Reserve figures begin in 1953.
Republicans said the legislation defeated yesterday was designed to pass with the support of Democrats, complaining that lawmakers such as Norm Dicks of Washington, the ranking member of the Appropriations Committee, withdrew their support. Democrats objected to a proposed $1.5 billion cut to a green- technology loan program to offset some of the cost of the disaster assistance.
Tennessee Representative Jim Cooper said he and some other Democrats may accept a "less partisan" offset for disaster spending. Republicans "don't have to poke us in the eye," he said.
Democrats got a boost today from the U.S. Chamber of Commerce, which said the auto-loan program "promotes manufacturing in the U.S. and is an important component of America's energy security."
Yesterday's vote represents the debt ceiling agreement coming back to haunt Republican leaders, who were only able to lift the borrowing cap last month with the help of Democrats.
That's because the legislation would set spending levels for the "discretionary" budget for the upcoming fiscal year agreed to as part of the debt limit deal. Democrats say they have no intention of reopening that debate.
"I want to send this message to them -- they should not renege on the agreement," Senate Majority Leader Harry Reid of Nevada said today. "We've agreed on that."
Senator Charles Schumer of New York said, "You can't shake hands on an agreement at the end of July and then they say 'oh no, it's up for negotiation again' in September."
Yet many House Republicans who opposed the debt agreement said they see no reason to support legislation needed to implement the plan.
"It would be consistent with voting against the debt deal to be voting against the implementation of a number that's too big," said Kansas Representative Tim Huelskamp, a freshman Republican. He and other Republicans complained the plan would spend $24 billion more than a budget written by House Budget Committee Chairman Paul Ryan.
That's an ominous sign for Republican leaders who will need to pass a catch-all spending bill to fund the government for the entire 2012 fiscal year. Lawmakers had planned to write that bill according to the debt ceiling agreement.
House Minority Whip Steny Hoyer, a Maryland Democrat, said Republican leaders will have to be more responsive to his colleagues' concerns. "If they expect our votes, they have to work with us," he said.
House, Senate clash anew over disaster aid bill
(By Associated Press | Friday, September 23, 2011)
Congress’ latest must-pass bill is prompting a new House-Senate showdown, highlighting a partisan rift so raw that an effort to help disaster victims has become mired in disputes over jobs, the national debt and the discredited Solyndra solar energy company.
The Republican-led House approved revamped legislation early Friday providing $3.7 billion to help people battered by Hurricane Irene, Texas wildfires, tornadoes and other natural disasters. The money would replenish an emergency fund that Homeland Security Secretary Janet Napolitano warned could be depleted early next week.
The measure would also prevent a federal shutdown next weekend by financing government agencies from the Oct. 1 start of the new federal fiscal year through Nov. 18. It was approved by a near party-line 219-203 vote shortly after midnight.
Leaders of the Democratic-run Senate promised to quickly kill the legislation, saying it lacked enough disaster assistance. Democrats also complained about cuts it would make to help pay for the aid: trimming $1.5 billion from Energy Department loans aimed at spurring development of fuel-efficient vehicles, a program they said is creating badly needed jobs.
"They insist on holding out on Americans who have suffered devastating losses," Senate Majority Leader Harry Reid, D-Nev., said of GOP lawmakers. "Americans are tired of this partisanship. They deserve to know that when disasters strike, we will be there to help them."
The Senate version, approved last week with the support of 10 GOP senators, provided $6.9 billion in disaster aid and no cuts to help pay for it.
White House spokesman Jay Carney faulted House Republicans for the deadlock on Friday, saying they had passed legislation knowing it would die in the Senate, just as they had during last month’s fight over extending the federal debt limit.
"The fever hasn’t broken — the behavior that we saw this summer that really repelled Americans continues," Carney said.
A spokesman for House Speaker John Boehner, R-Ohio, blamed Democrats, saying the House-passed bill had enough money for the Federal Emergency Management Agency in the short term and that Congress could provide more money later.
"The Senate Democratic leadership is essentially threatening to delay FEMA money that families need right now for a partisan gain," said the spokesman, Michael Steel.
It was unclear how the standoff would be resolved. The House and Senate had both planned to take next week off, but neither seemed likely to risk accusations of ignoring the thousands of Americans victimized by natural calamities or of allowing the government to shut its doors.
"We’re establishing priorities," said Rep. David Dreier, R-Calif. "We have a priority, that being dealing with our fellow Americans."
House passage represented a reversal from an embarrassing setback the chamber dealt its Republican leaders on Wednesday. On that day, the House rejected a nearly identical measure, shot down by Democrats complaining its disaster aid was too stingy and conservative Republicans upset that its overall spending was too extravagant.
The bill the House approved Friday morning contained just one change — an additional $100 million in savings from cutting a second Energy Department loan program, this one aimed at sparking new energy technologies.
That is the same program that financed a $528 million federal loan to Solyndra Inc., the California solar panel maker that won praise from President Barack Obama but has since gone bankrupt and laid off its 1,100 workers. The Obama administration had praised Solyndra as a model for green energy companies, but now Congress is investigating the circumstances under which the government approved the loan.
Forty-eight Republicans had voted against the bill on Wednesday, a number GOP leaders cut in half in Friday’s vote after hours of lobbying. One who switched from "no" to "yes" was conservative Rep. Jeff Landry, R-La., who said he was swayed by the new cuts in the technology loan program.
"This bill is like dessert," the freshman said in an interview of the new measure. "Are you kidding? I came here to cut wasteful spending."
The gridlock over the spending bill was the third time this year the two parties have clashed over legislation whose passage both sides considered crucial.
In April with just hours to spare, the two sides reached agreement on a bill that averted a federal shutdown and provided money for government agencies through September. Then this summer, they battled for weeks before finally approving legislation extending the government’s borrowing authority and narrowly preventing a historic federal default.
Against a backdrop of the 2012 presidential and congressional elections and angst over the country’s dismal job market, this year’s clashes have been intensified by the infusion of dozens of tea party Republicans who often show little inclination to compromise.
Wednesday’s defeat of the spending bill was only the most recent time they have made life difficult for Boehner. And it underscored the challenges ahead this fall as Congress tackles efforts to fix the economy, create jobs and try to control the $14 trillion national debt.
The money to finance agencies beginning Oct. 1 is needed because Congress has completed none of the 12 annual spending bills.
In a Sept. 10-15 CBS News/New York Times poll, 72 percent of adults surveyed disapproved of the job performance of Republicans in Congress and just 19 percent approved. Democrats had a disapproval rating of 63 percent and an approval rating of 28 percent..
Senate blocks House disaster aid bill
(By ALAN FRAM, Associated Press, September 23, 2011)
The Democratic-led Senate blocked a House-passed bill on Friday that would provide disaster aid and keep government agencies open, escalating the parties' latest showdown over spending and highlighting the raw partisan rift that has festered all year.
In a tit-for-tat battle, the Senate first used a near party-line vote of 59-36 to derail the measure from the Republican-run House. The House bill would fund federal agencies and provide $3.7 billion in disaster assistance, partly paying for that aid with cuts in two loan programs that finance technological development.
Then, Senate Republicans refused to let the chamber vote on a compromise offered by Senate Majority Leader Harry Reid, D-Nev., that was similar to the House version but lacked the loan program cuts. A vote on Reid's measure was set for Monday afternoon, but Republicans seemed likely to prevail because Democrats would need 60 votes to win -- exceeding the 53 votes they have.
The basic dispute pitted GOP objections that the bill's emergency spending was too costly against Democratic complaints that cutting the energy loan programs would stifle the economy and cost jobs.
The fresh round of brinksmanship came with lawmakers facing two deadlines. Obama administration officials have warned that the Federal Emergency Management Agency's fund for disaster victims could run out of money early next week, even as claims from Hurricane Irene and other recent disasters continue to arrive at government offices. And Congress has completed none of the 12 annual spending bills for the federal fiscal year that begins Oct. 1, meaning agencies would have to close their doors without fresh funding.
"The government's not shutting down. I spoke to Mr. Fugate myself," Reid said, referring to FEMA director Craig Fugate. "FEMA is not running out of money. We'll come here Monday, reasonable heads will prevail."
Senate Minority Leader Mitch McConnell, R-Ky., said Democrats were ignoring the government's budget problems. "What's at stake is whether we're going to add to the debt or not," McConnell said.
It appears that the freshmen Republican congressmen are giving Boehner headaches.
The basic dispute pitted GOP objections that the bill's emergency spending was too costly against Democratic complaints that cutting the energy loan programs would stifle the economy and cost jobs.
Senate to vote on FEMA funding as government shutdown looms
(By Stephanie Condon, CBSNews.com, September 26, 2011)
Partisan squabbling over a fraction of the federal budget has tied up a short-term spending bill, but the Senate returns to work tonight to vote on a bill in the hopes of avoiding a government shutdown this week.
The House and Senate last week intended to pass a bill to keep the government funded through November 18 and provide emergency funding for the Federal Emergency Management Agency (FEMA). But Democrats and Republicans disagreed over whether it's necessary to cut funding for other programs to pay for the FEMA expenses, and they failed to pass the bill. Now, if Congress doesn't pass the spending bill by Sept. 30, the government would be forced to shutdown.
The Senate on Friday rejected the House version of the bill, which would have allocated about $1 trillion in government funding, including about $3.7 billion for FEMA disaster aid. The Democratic-led Senate voted against the House bill because it includes $1.6 billion in Republican-proposed spending cuts targeting the Department of Energy's Advanced technology Vehicle Manufacturing Program. The program gives loans to car companies to pay for things such as factory upgrades and the development of new, green, fuel efficient technology, and Democrats say the cuts would cost up to 10,000 jobs.
With little time left to act, Senate Majority Leader Harry Reid tonight will hold a vote on a bill that mirrors the House version, but without the spending cuts. If it passes, the House would have to pass that version as well. If it fails, the Senate could be compelled to accept the House version or, more likely, the two sides would have to negotiate a compromised in the next few days.
The funding in question represents just .04 percent of the federal budget, but the fight represents the larger battle over deficits and government spending.
Meanwhile, FEMA is running short of cash to pay for relief efforts to help the victims of Hurricane Irene, Tropical Storm Lee, and several other costly natural disasters across the country. Victims of the disasters say Congress is letting people suffer while it continues its partisan bickering, the New York Times reports.
Over the weekend, members of Congress gave little indication that they were ready to compromise.
"The Senate is saying . . . why should we, in effect, rebuild schools in Iraq on the credit card but expect that rebuilding schools in Joplin, Missouri, at this moment in time have to be paid for in a way that has never been in any of the previous disaster assistance that we've put out before?" Sen. Mark R. Warner, D-Va., said on CNN's "State of the Union."
The office of House Majority Leader Eric Cantor, meanwhile, pointed out Monday morning that Democrats have in the past diverted renewable energy funding for other programs and called Senate Democrats hypocritical for opposing to do so in this instance.
"The Senate is saying . . . why should we, in effect, rebuild schools in Iraq on the credit card
Shutdown Averted; Disaster Aid Dispute Surmounted
(By DAVID ESPO, Associated Press, September 26, 2011)
Ending weeks of political brinkmanship, Congress finessed a dispute over disaster aid Monday night and advanced legislation to avoid a partial government shutdown only days away.
The agreement ensured there would be no interruption in assistance to areas battered by disasters such as Hurricane Irene and last summer's tornados in Joplin, Mo., and also that the government would be able to run normally when the new budget year begins on Saturday.
The Senate approved the resolution after a day of behind-the-scenes talks and occasionally biting debate, spelling an end to the latest in a string of standoffs between Democrats and Republicans over deficits, spending and taxes. Those fights have rattled financial markets and coincided with polls showing congressional approval ratings at historically low levels
The breakthrough came hours after the Federal Emergency Management Agency indicated it had enough money for disaster relief efforts through Friday. That disclosure allowed lawmakers to jettison a $1 billion replenishment that had been included in the measure — and to crack the gridlock it had caused.
The Democratic-controlled Senate approved the measure on a bipartisan vote of 79-12, sending it to the Republican-controlled House for a final sign-off.
There was no immediate comment from House GOP leaders, although their approval for the measure seemed a mere formality after the party's Senate leader agreed to it.
"This compromise should satisfy Republicans...and it should satisfy Democrats," said Senate Majority leader Harry Reid, who added that Budget Director Jacob Lew had informed him that FEMA did not need any additional funding to meet its needs for the final few days of the budget year.
"It's a win for everyone," declared Reid, who had spent much of the past few weeks accusing Republicans of choosing to heed the wishes of tea party adherents rather than the needs of their own constituents battered by acts of nature.
Senate Republican leader Mitch McConnell of Kentucky said it was a "reasonable way to keep the government operational."
But he got in a final jab at Democrats, noting that the disaster funds sought by the Obama administration and its allies in Congress were now known to be unneeded.
"In my view, this entire fire drill was completely unnecessary," he said.
But not even the dispute-resolving agreement prevented Democrats from proceeding to a politically charged vote earlier in the evening that was designed to force Republicans to decide whether immediate aid to disaster victims or deficit concerns held a higher priority.
And the rhetoric was far harsher during the day on the Senate floor, when Mary Landrieu, D-La., unleashed an unusually personal attack on House Majority Leader Eric Cantor, R-Va., saying the weeks-long controversy started when he said, "Before we can provide help we need to find offsets in the budget."
She called that "the Cantor doctrine" and said the controversy "could have been avoided if Cantor had just said, 'I'm sorry, but I made a mistake.' But instead of saying that, he doubled down," she said.
Laena Fallon, a spokeswoman for Cantor, responded that the Virginia Republican had "never said the things she alleged, he has only suggested that we ought to provide disaster aid dollars to those who need them in a responsible way — something that she's voted to block despite the urgent need."
In fact, House Republicans insisted that any new disaster aid for the expiring budget year be offset by cuts elsewhere in the budget, a decision that Democrats seized on in hopes of reshaping the political terrain to their advantage.
Because the House is on a one-week break, it was not immediately clear how the legislation would be cleared for President Barack Obama's signature.
Among the options are passage of a temporary funding measure, to be passed in a brief session of the House planned for Thursday, that would keep government agencies in funds until lawmakers return on Oct. 4. The Senate approved the bill without objections.
Alternatively, GOP leaders could call the full House back into session this week for a vote.
Either way, the agreement assures funding until Nov. 18.