With Congress momentarily freed from the Syrian crisis, lawmakers plunged back into their fiscal standoff Thursday as Speaker John A. Boehner appealed to the Obama administration and Democratic leaders to help him resolve divisions in the Republican ranks that could lead to a government shutdown by month’s end.
In meetings with Democratic and Republican congressional leaders Thursday after a session with Treasury Secretary Jacob J. Lew on Wednesday, Boehner sought a resumption of negotiations that could keep the government running and yield a deficit-reduction deal that would persuade recalcitrant conservatives to raise the government’s borrowing limit.
Much of the federal government will shut down Oct. 1 unless Congress approves new spending bills to replace expiring ones, and by mid-October, the Treasury Department will lose the borrowing authority to finance the government and pay its debts.
“It’s time for the president’s party to show the courage to work with us to solve this problem,” said Boehner, who argued that budget deals have been part of past agreements to raise the debt limit
But a bloc of 43 House Republicans undercut the speaker’s deficit-reduction focus, introducing yearlong funding legislation that would increase Pentagon and veterans spending and delay President Barack Obama’s health care law for a year — most likely adding to the budget deficit. That bloc is large enough to thwart any compromise that does not attract Democratic support.
“Obamacare is the most dangerous piece of legislation ever passed in Congress,” said Rep. John Fleming, R-La. “It is the most existential threat to our economy” that the country has seen “since the Great Depression, so I think a little bit of additional deficit is nothing,” he added.
Just five scheduled legislative days stand between the House and a government shutdown that has loomed for months. As of now, Republican leaders appear to have no idea how to stop it. House members are preparing for the worst. Rep. Scott Rigell, R-Va., began circulating a 14-page fact sheet on the impact of a government shutdown.
This week, Rep. Eric Cantor of Virginia, the No. 2 House Republican, proposed a two-step resolution to the fiscal impasse. Cantor’s plan offered a stopgap spending bill to keep the government operating through mid-December at the current level, which reflects sharp, across-the-board cuts known as sequestration. That bill would have a companion resolution to withhold all money for the health care law, but the Senate could simply ignore that resolution and approve the short-term spending bill.
Then the House would vote to raise the debt ceiling enough for a year of borrowing, but demand a year’s delay in carrying out the health care law.
Within 24 hours, the House’s most ardent conservatives declared the defunding resolution a gimmick that fell well short of their drive to undo the health care law. House Democrats said they would oppose not only stripping the health care law of money but also a spending level that maintains sequestration.
Budget deficit shrinks 35 percent
The U.S. government posted a narrower budget deficit in August compared with a year ago, keeping the annual gap on track to be the smallest in five years.
The deficit for August was $147.9 billion, the Treasury reported Thursday. That brought the annual budget gap through the first 11 months to $755 billion, or 35 percent lower than the nearly $1.2 trillion in red ink for the same period last year.
The budget year ends on Sept. 30. The Congressional Budget Office projects the government will run a surplus this month, lowering the annual deficit to $642 billion. That would be the first annual deficit below $1 trillion in five years.
The federal deficit represents the annual difference between the government’s spending and the tax revenues it takes in. Each deficit contributes to the national debt, currently $16.7 trillion.