September 23, 2011

More Budget Drama: Senate Defeats House Spending Bill

Government shutdown looms, again, as Congress prepares to adjourn for a week as deadline nears

On Friday afternoon, the U.S. Senate defeated by a 59-36 margin a government funding bill that the House had passed early Friday. The bill would have funded the government through Nov. 18 by meeting a Sept. 30 deadline for an expiring continuing resolution on government spending, but with both chambers due to begin a week-long recess beginning Friday, the next step on funding the government is unclear, though the Senate Democratic leadership said that body would stay in town and vote on a revised bill on Monday.

Among the agencies that could run out of funding by Monday is the Federal Emergency Management Agency, according to the Washington Post. The resolution currently keeping the federal government open is set to expire on Sept. 30. The House had passed the spending bill, 219 to 203, in the early hours on Friday morning after a similar version failed on Wednesday.

However, Senate Majority Leader Harry Reid (D-Nev.) said following Friday afternoon's vote, according to the Wall Street Journal, that "the government's not shutting down. FEMA's not out of money. We'll come here Monday; more reasonable heads will prevail; and I would hope over the weekend that the four leaders can lead their troops in the right direction."

As previously reported by AdvisorOne, the Wednesday measure provided far less funding for disaster relief than Democrats wanted and offset much of that funding with cuts to a program to build energy-efficient cars that Democrats said had already produced 40,000 jobs. The New York Times reported that the new bill was almost identical to the old one, with the exception of one largely Pyrrhic gesture—the rescinding of $100 million from an Energy Department loan to the now-defunct Solyndra, the manufacturer of solar panels that declared bankruptcy just last month. The loan program itself expires next week anyway.

The Senate had earlier passed a version of the bill with nearly twice as much money to aid natural disaster victims, without any offsets; it was passed with the aid of Republicans whose states are in need of the funding.

House Republicans, however, insisted that the bill failed to cut spending, and had to be cajoled by party leaders into supporting the new version; half of those who had opposed the Wednesday bill were convinced to approve the Friday bill, and the measure passed.

The Senate has promised to defeat it, but Rep. Eric Cantor, R-Va., said the House planned to adjourn for a planned week-long break Friday regardless. He warned then that should the Senate fail to pass the measure, as it did, the blame would fall on Senate Majority Leader Harry Reid, D-Nev., and the Democrats. House Speaker John Boehner, R-Ohio, however, promised that the differences over the bill would not lead to a government shutdown, and pointed out that Congress has over a week to resolve its differences.

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