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WHY DO TODAY WHAT YOU CAN PUT OFF UNTIL TOMORROW?: Congressional Leaders Agree to Postpone Spending Decisions Until New Congress Convenes in 2013

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“This agreement reached between the Senate, the House, and the White House provides stability for the coming months, when we will have to resolve critical issues that directly affect middle class families.”

With the federal Fiscal Year (FY) 2013 set to begin a little less than two months from now on October 1 and Congress yet to pass any of the twelve annual spending bills, key congressional leaders have agreed on a plan with President Obama to pass a stopgap spending bill, also known as a continuing resolution (CR), that will keep the government funded through March 2013 and avoid a government shutdown. The legislative language for the CR will be written during the August congressional recess.

Implicit in the agreement is that the memberships of the House of Representatives and the Senate—if not the White House as well—will be different when final spending decisions are made in March 2013. For example, if Republicans make gains in November—especially if they seize control of the Senate—federal spending will likely be cut below the $1.047 trillion spending target in this agreement.

“This agreement reached between the Senate, the House, and the White House provides stability for the coming months, when we will have to resolve critical issues that directly affect middle class families,” said Senate Majority Leader Harry Reid (D-NV) in a statement. “The funding levels in the six-month CR will correspond to the top-line funding level of $1.047 trillion. I hope that we can face the challenges ahead in the same spirit of compromise.”

The $1.047 trillion is a key number because it represents an agreement between the House and Senate on how much the federal government should spend in FY 2013. Before the agreement was reached, the House was working with a spending target of $1.028 trillion while the Senate chose to stick to the $1.047 trillion amount set by last summer’s Budget Control Act, which raised the debt ceiling.

Given the highly partisan environment and the insistence of leaders in both chambers to stick with their respective spending targets, the $19 billion difference between the two chambers was unlikely to be resolved, making a government shutdown a very real possibility when the current fiscal year ends on September 30. Instead, with an agreement in place to use the Senate’s higher number, final spending decisions for FY 2013, including for federal education programs, should be much easier.

Members of the conservative Republican Study Committee agreed to go with the higher spending target in exchange for a longer CR that will extend temporary funding until the next Congress convenes in January. By pushing for a longer CR, they are betting that their party will make gains during the November elections that will make it easier to push through deeper spending cuts.

By coming to an agreement that will postpone the annual appropriations process, congressional leaders hope to spend the rest of the year—including a possible post-election “lame duck” session—on expiring tax cuts and the $1.2 trillion in automatic across-the-board spending cuts over ten years, formally known as sequestration, that are set to occur on January 2.

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