Fiscal year coming to an end with time running out for Congress

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Two weeks to the end of the fiscal year, and so it’s crunch time for Congress. Besides fighting over a $3.5 trillion extra spending bill and a $2.9 trillion tax hike, there’s the matter of the regular old appropriations to keep the government running. For the outlook, Bloomberg Government deputy news director Loren Duggan joined Federal Drive with Tom Temin.

Interview transcript:

Tom Temin: And Loren, the agenda just seems to get bigger and bigger and bigger. I can think of one of these ladies with a hat piled with fruit on top. And there’s more bananas and oranges and apples added every day.

Loren Duggan: Indeed, there’s so much going on right now, some of it routine business and some of it of Congress’s own making, putting these major spending packages on their agenda, trying to get those across the line in the next couple of weeks. We’ve not seen all the members of Congress in one place for quite a while. They came back here and there, the committee’s met, obviously. But today’s the first day the House and the Senate are back and they can look each other across Capitol Hill and figure out what they’re going to do about these big issues because there’s a lot on their plate, and really not a lot of time to get all this done.

Tom Temin: Yeah, they’ll see each other and probably throw lawn darts at each other across the Capitol Hill there. But first of all, there is the debt limit question is looming closer and closer. And, again, there’s a lot of cross purpose talking about that. But what will they do do you think?

Loren Duggan: Well, the debt limit is kind of a pickle for them. There’s a couple of different ways they could have done it, they could have used this reconciliation process that they’re using for the spending and tax plan to advance the debt limit. They could have done it with Democratic votes, but they decided not to go that route. So Democrats will need Republicans somehow to get this across the line, at least based on the procedures in place now. And Mitch McConnell made the rounds to a lot of different publications last week saying, without much ambiguity, I’m not going to help them do this – if they want to increase spending, and they want to do these things with taxes, they’re going to have to figure out how to raise the debt limit. Democrats are pushing back on that saying the debt that we’ve incurred is from all the spending packages during COVID, that it’s a bipartisan problem, we should solve it together. But that doesn’t seem to be for the moment at least the approach that’s being taken here. The deadline for this is a little murky. The Treasury Department is using extraordinary measures, as they call them, to keep us being able to borrow and operate even though the debt limit came into effect in August. Janet Yellen, the person in charge of that, says she thinks sometime in October is when this needs to be dealt with or the government will be in some trouble. Other estimates put it maybe into November, but that’s still not very long into the future. So this is a very acute problem that needs to be dealt with in the near term.

Tom Temin: And by October, of course, we will be into the new fiscal period. And the budget will either be appropriated CR’d or I guess there are even people talking in terms of shutdown right now.

Loren Duggan: Well, the big question is, what are we going to do before September 30. The house has on its schedule this week, a continuing resolution that would fund the government into December, which would give them a couple months to figure out what to do on some of these bigger picture items. The appropriations process has made some progress, the House passed nine of the 12 bills, the Senate committee reported three of its, but seems to be pausing for now. The one thing that there’s not agreement on is how much to spend in total, on these appropriations bills, Republicans matter here as well, because you’ll need 60 votes to get any sort of package through the Senate. So there’s going to be a lot of horse trading there as they figure out how much to do there. So a continuing resolution, which is not the government’s favorite way of operating, is the most likely approach here, we’ll have to see if the dynamics of this particular CR will allow it to get through both chambers and on the president’s desk by September 30.

Tom Temin: And perhaps the wild card in this and in the debt ceiling is what each side decides to attach to those bills, things that are poisonous if you don’t pass them, and exposes the other side to perfidy for not voting for it because of the dagger that you embedded in there.

Loren Duggan: That’s correct. And the debt limit could be that type of item for Republicans as we, as we’ve seen, so the combination of those two is attractive for Democrats, because a continuing resolution is a must pass piece of legislation, the debt limit is also must pass in their eyes, that combination could create some difficulty. And then we might also see some disaster aid as part of this continuing resolution, because we’ve had a lot of wildfires, and obviously the hurricanes recently, and the money for Afghanistan to help with that continuing situation. We may be out of the country, but we have a lot of refugees to help deal with and relocate. So there’s a lot that could go into this must pass piece of legislation.

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Tom Temin: That plus a looming famine. It looks like coming to Afghanistan, which would be not a great outcome. We’re speaking with Loren Duggan, deputy news director at Bloomberg Government. And the status of the National Defense Authorization Act?

Loren Duggan: So we have a House and Senate version out of the committee’s but neither chamber has tackled that yet. That’s one of the big items the House is doing this week as it comes back into town. Both chambers have bills that would exceed the Biden administration’s proposed budget for defense programs by $25 billion, which will help attract Republican support to that bill but may cost some Democratic support. So The leaders in both chambers are going to be working through how to get those bills over the line, and then figure out how to reconcile that with the spending bills that are also being written or have been written and passed through some of the chambers. So the NDAA will be a major bill on the floor this week. 800 amendments I think were submitted to be reconciled and brought forward through the rules committee, they’ll narrow that down and figure out what will get a vote on the House floor. But this will be another one of those must pass items. Most years, that would be an even bigger highlight than it is right now. But clearly, all of that’s being overshadowed by this spending and tax plan that’s also being developed.

Tom Temin: And they consider the NDAA a done deal, not necessarily for September 30th, but by the end of the calendar year, they consider that on time, generally?

Loren Duggan: Yes, they do. I mean, there’s very important provisions, it’s considered must pass because it authorizes pay for troops and has some important contracting authorities that the DoD needs for buying weapon systems. But usually the end of the year is the target on that – it’s not as important to have in place at the beginning of the fiscal year.

Tom Temin: And if you look beyond the horizon to the sky here on the Hill, there seem to be two gigantic clouds that are causing lightning. And one is the recently unveiled tax package, which is already showing some fracturing on the Democratic side, opposition is pretty uniform on the Republican side, and the infrastructure bill, which is still getting parsed. And that must be taking up a lot of the lawmakers, maybe the staff time more than the lawmakers own time.

Loren Duggan: Certainly it is. The package that is pretty much a done deal, except for the voting, is that infrastructure plan that came over from the Senate in August, it’s waiting for a vote in the House, they’ve agreed to begin considering it by September 27. So a week from now, that’s likely to go forward. Now, whether it can pass or not depends a lot on how this other package is looking. We talk a lot about a 50/50 Senate, we know that any senator there has a lot of power to block this package. Joe Manchin has been the loudest in the Senate, he wants to bring the price tag down. But there’s also Kyrsten Sinema, who would like a smaller package, and other members, if you get a smaller package, they’re going to demand that certain things be included or their votes in jeopardy. So there’s a lot to play out there. The House, though, is a very narrow majority too, 220 to 212. If Democrats lose more than three votes on a question, they’re not going to get their package through. So as we saw last week, three Democrats on a committee voted with Republicans and they had to take part of that package out because it just lacked the support to move forward. So Democrats have a very narrow path to maneuver. Progressives want a big bold package, $3.5 trillion to them is a compromise. They don’t want to go to 2.5 or 1 to make the moderates happy. Moderates really want to vote on this infrastructure package, get it done, keep working on the other package, see what you can do with that. So those two packages are intertwined. But the infrastructure package is much closer to being on the law books. If they can get a vote, get it through the House and get it to President Biden’s desk. But those two things are very much aligned and kind of their fates are intertwined right now.

Tom Temin: And what does the schedule look like now that they’re both in session this week? Is that it until, what, Thanksgiving or do they have more breaks coming up?

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Loren Duggan: They’ll have some breaks here and there, but nothing equaling that August break that we just came out of, but the house does go back to their districts sometimes and you know, they’ll probably have more committee work weeks where committees will turn through bills and hearings. But we’re in a busy stretch here from now to the holidays. You know, it’s going to be these big questions. Can you fund the government? Can you pass NDA, can you do this tax and spending package that the Democrats really want to get done? So a lot on the agenda, this is the busy season.

Tom Temin: Loren Duggan is deputy news director at Bloomberg Government. As always, thanks so much.

Loren Duggan: Thank you.

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