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House passes stopgap funding, debt ceiling suspension bill

Speaker of the House Nancy Pelosi, D-Calif., on Capitol Hill on Sept. 13, 2021, in Washington, D.C. (Kent Nishimura/Los Angeles Times/TNS)
September 22, 2021

The House passed a catchall budget package Tuesday that is intended to avoid a partial government shutdown and debt limit crisis, but it seems likely to come back for a do-over once the Senate works its will.

The stopgap funding bill, which passed on a 220-211 party-line vote, would extend federal agency budget authority through Dec. 3 and provide nearly $35 billion in aid to disaster victims and relocation assistance Afghan refugees who helped the U.S. government during two decades of war.

The package advanced after a few hours of drama earlier in the day over an initial decision to grant Israel’s $1 billion request for missile defense funds. Progressive Democrats opposed to Israel’s military response to rocket attacks launched by Palestinian groups from the Gaza Strip in May forced party leaders to strip the money.

GOP lawmakers backed the Israeli defense funds, as well as much of the underlying package that remained intact. But they rebuked Democrats for adding language that would suspend the statutory debt limit through Dec. 16, 2022, or beyond the midterm elections.

“This one decision could force us into an unnecessary and costly government shutdown, and other critical programs in this bill could be left behind,” House Appropriations Committee ranking member Kay Granger, R-Texas, told the Rules Committee on Tuesday.

Senate Minority Leader Mitch McConnell, R-Ky., has argued for months that despite years of bipartisan negotiations on the debt limit, Democrats should go at it alone this year since they are using the partisan budget reconciliation process to enact their fiscal priorities without GOP input.

Republican leaders used the same fast-track process to get around the Senate’s 60-vote legislative filibuster for their 2017 tax bill and unsuccessfully tried to use it to repeal and replace the 2010 health care law when they were in the majority.

Moody’s Analytics on Tuesday warned Congress against exacerbating uncertainty on a debt limit suspension, saying that if a bill isn’t enacted before the Treasury Department runs out of cash and borrowing room “the resulting chaos in global financial markets will be difficult to bear.”

“The U.S. and global economies, which still have a long way to go to recover from the recession caused by the pandemic, will descend back into recession,” Moody’s Chief Economist Mark Zandi and Assistant Director Bernard Yaros wrote.

House Majority Leader Steny H. Hoyer acknowledged earlier in the day that the Senate could make changes and send the package back to the House. The procedural hurdles along the way could put final passage pretty close to the deadline; without a presidential signature on the continuing resolution, starting Oct. 1 the federal government would begin a partial shutdown. Dozens of agencies would have to furlough workers and require others to work without pay.

House passage Tuesday was initially delayed after internal Democratic debate about whether the package should have included $1 billion in funding for Israel’s Iron Dome missile defense system. “A group of progressives communicated to leadership that they wouldn’t be able to support the CR if the $1 billion in additional funding for the Iron Dome wasn’t taken out,” said a House Democratic aide who wasn’t authorized to speak publicly.

House Appropriations Chair Rosa DeLauro, D-Conn., released a revised stopgap bill with the Iron Dome funding dropped, plus a few other technical changes.

DeLauro didn’t address progressives’ concerns in her testimony before the House Rules Committee, but said Iron Dome production is currently “at full capacity” and that the money would ultimately be included in a final fiscal 2022 Defense appropriations bill.

That didn’t assuage some party moderates, including Democrats with potentially tough races next year like Michigan Rep. Elissa Slotkin and Arizona Sen. Mark Kelly.

Slotkin, a former CIA Middle East analyst who did three tours in Iraq, tweeted that opposition to the Iron Dome funds was “devoid of substance and irresponsible.” Kelly tweeted that Iron Dome “protects civilians from rocket attacks” and cited the program’s “long connection to southern Arizona.” Defense contractor Raytheon helped establish and build the Iron Dome program at its Tucson facility.

The continuing resolution would provide a range of program extensions and “anomalies” for certain agencies to spend additional funds. Examples include a Medicaid boost for the territories, more money for former President Donald Trump’s office and staff, and a renewal of lapsing authority to write national flood insurance program claims.

An extension of expiring surface transportation programs was left out due to a push from House Democratic moderates to vote on a bipartisan five-year package that passed the Senate last month.

If lawmakers can’t reach agreement on the debt limit before the Treasury Department runs out of borrowing authority, the federal government would only be able to pay its bills each day using existing cash. That could put Social Security checks, pay for federal employees and dozens of other financial obligations at risk.

Treasury has said Congress needs to act sometime next month; Wrightson ICAP, a private investment advisory firm, said this week the drop-dead deadline was likely Oct. 25 or 26.

Speaking on CNBC Tuesday morning, Sen. Rob Portman, R-Ohio, cited estimates that lawmakers have until near the end of October before they need to act. “We’re not up against” the deadline, Portman said. “It’s not necessary to do it now.”

Portman said Republicans need to see some sort of action to deal with the nation’s fiscal problems in order to support a debt ceiling suspension.

“I suspect in a week or so we’ll be back here again with a bill I can support,” Oklahoma Rep. Tom Cole, the Rules Committee’s top Republican, said at the outset of Tuesday morning’s meeting to set parameters for floor debate. “I don’t think we should kid ourselves.”

DeLauro didn’t sound worried about potential delays. “I think let’s just wait to see where we’re going,” she said after a caucus meeting. “You know the nature of this institution changes on the dime.”

At least one Senate Republican, John Kennedy from hurricane-battered Louisiana, said Monday he might be inclined to support a package that contains disaster aid.

The stopgap funding bill would provide $28.6 billion to help state and local governments recover from natural disasters, including $10 billion to cover agricultural losses from 2020 and 2021 weather events, nearly $6 billion for Army Corps of Engineers flood control projects, $5 billion for housing and economic development projects and $2.6 billion for highway repairs, among other items.

The measure would separately put more cash into the Federal Emergency Management’s disaster relief fund on Oct.1. As of Aug. 31, the agency estimated an end-of-September balance of $36.4 billion; the CR would increase that figure to more than $55 billion.

House Minority Whip Steve Scalise, a Louisiana Republican, pointed out the FEMA funds in a notice to fellow Republicans that nonetheless urged them to vote “no” on the combined package.

The measure would provide $6.3 billion to help relocate Afghans who helped the U.S government during two decades of war in Afghanistan, including language making refugees eligible for federal benefit programs and resettlement assistance if they complete security and background checks. They’d also be eligible for expedited asylum processing.

The bill includes language to temporarily extend how fentanyl — a highly potent opioid — is classified. Fentanyl is responsible for a lion’s share of drug overdose deaths, which have been on the rise during the COVID-19 pandemic.

The bill would extend fentanyl’s status as a so-called “Schedule 1” drug until Jan. 28, 2022. Under current law, the drug would lose its status as a drug with a high risk for abuse on Oct. 22. The Office for National Drug Control Policy issued recommendations for how to classify fentanyl long term earlier this month.

The CR would temporarily provide additional funding for the U.S. island territories’ Medicaid programs. Unlike states, whose Medicaid funding is mandatory under statute, the territories are subject to additional restrictions.

Territory funding is capped and funded at a lower match percentage. That match is also subject to reauthorization. The current match rate expires at the end of the fiscal year, and the CR would extend it until Dec. 3, 2021. Territory officials and advocates have been pushing for a long-term solution.

The territory funding would be offset by drawing $96 million from the Medicare Improvement Fund. This fund was made redundant by the 2010 health care law when it created the Centers for Medicare and Medicaid Services Innovation Center.

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