The threat of government shutdowns and the ‘New Normal’

Sounds familiar? The clock ticks towards another fiscal deadline while federal agencies and employees face the threat of another government shutdown. Since the passage of the Budget Control Act of 2011 (Public Law 112-25) and the subsequent sequestration process, Congress and the White House have been locked in an ongoing battle over tax and spending priorities. The latest skirmish is over whether Congress will pass a “clean” continuing spending resolution (“CR”), i.e. one that only funds agencies and programs at existing levels, before the 2013 Fiscal Year ends at midnight September 30th. Republicans in the House of Representatives have added an additional provision to the CR that defunds the Affordable Care Act, which the Senate has removed before sending the measure back to the House. If the House of Representatives does not agree to the Senate’s version of the CR, as is possible, much of the federal government would face a shut down on October 1st.

But the fact remains that the CR is only a temporary measure which will allow the federal government to remain open for a short time. Congress still has to fund the remainder of the 2014 Fiscal Year, leading to decisions on either additional CRs or an omnibus spending bill. Expect the battle over taxes and spending to continue as Democrats push for a overall spending level for Fiscal Year 2014 of $1.058 trillion, which is more than the spending level of $967 billion set in place under the Budget Control Act. And there has to be a decision, by October 17th, on increasing the national debt beyond the current $16.7 trillion ceiling.

So more chances exist for another budget standoff and government shutdown.

Welcome to the New Normal.