Back in September, Congress passed yet another stopgap continuing resolution to fund the U.S. government.
That authority lapses on December 16.
No new funding authorization bill, no more government spending, and a shutdown of all except the most critical government services.
Can a lame-duck Congress with a thin Democratic majority in the House and a 50/50 Senate (plus the Vice President’s tie-breaker 51st vote) get another stopgap bill passed before a new Congress with a thin Republican majority (it’s now projected) takes over the House of Representatives in January?
This spending authorization is in addition to other tiny, insignificant financial matters before the lame-duck Congress. Little matters like extending the debt ceiling so the government can keep on funding its operations. Or the expiration of the Trump administration’s tax cuts for businesses. Or making the expanded family tax credit permanent. Or aid for Ukraine. Or funding for hurricane disaster relief. (The list of non-financial issues is just as long or longer.)
The pressure is on for this session since leaders of the incoming Republican House have signaled that they will block a spending deal and the extension of the debt ceiling unless they get concessions such as the annual sun-setting Social Security and Medicare.
One possible deal would be to link payments to low-income families with children and renewal of the Trump tax breaks. (I have to say I’m not sure that linking a big spending initiative with big tax cuts is a sound policy while the Federal Reserve strives to lower inflation.) A short-term deal might run through the end of the government’s fiscal year in September 2023.
That would still leave the debt ceiling dangling and financial markets fretting. Nothing the global bond markets would like less than the possibility of a U.S. default on its debts. The U.S. will, probably, not hit its debt limit until the middle of 2023. Any debt ceiling battle would likely be protracted and ugly since extreme Republicans have said they want to use the debt ceiling battle to advance their solutions to non-financial issues such as illegal immigration.
“We’re not going to just keep raising the debt ceiling without structural reform,” Republican Senator. Rick Scott (Fla.) said on Sunday on Fox News. I think can’t be sure but I think “structural reform” would target Social Security and Medicare.