WASHINGTON – The U.S. Congress approved a short-term funding bill Thursday that ends the possibility of a federal government shutdown next week, but a broader budget battle about taxes and spending for 2013 is only just beginning.
The stop-gap spending resolution, approved on a broad bipartisan vote in the House of Representatives, locks in the $85 billion across-the-board spending cuts known as the sequester through the Sept. 30 end of the fiscal year.
But the legislation includes provisions that will blunt the impact of the sequester. Within hours of the bill’s passage, the Defense Department announced that furlough notices scheduled to go out Friday to 800,000 civilian workers will be delayed until April 5.
That will give officials time to see whether the new budget will still require 22 unpaid days or could result in fewer lost days for workers.
Congress’ action also halted furloughs for thousands of meat inspectors by transferring $55 million from other agriculture programs to ensure meat and poultry plants stay open, agriculture officials said.
The meat lobby, as well as Agriculture Secretary Tom Vilsack, pressed the issue with Congress and the Obama administration, saying the furloughs threatened a multibillion-dollar industry and would have forced an increase in retail prices.
The House vote, which provides funding for the government for the six months starting March 28, came a day after the Senate approved the bill. It now goes to President Barack Obama for his signature, ending a relatively smooth and drama-free process for a Congress that has repeatedly found itself deadlocked on spending issues.
Still, the measure covers only the next six months. Lawmakers are debating how much to tax and spend for the years to come.
On Thursday, the House also approved a budget blueprint by Republican Rep. Paul Ryan in a mostly partisan 221 to 207 vote. Ten Republicans joined House Democrats in opposing the Ryan budget measure. Ryan’s plan calls for balancing the budget over the decade by slicing $5 trillion from future spending, including by block-granting programs for the poor and overhauling Medicare for people aged 54 and younger.
Conservatives had insisted that the Ryan plan lock in a balanced budget within the next 10 years. His spending proposals of the past two years took at least 30 years to bring spending into line with government revenue.
Democrats slammed Ryan’s plan as too austere — particularly its proposal to end Medicare as a guaranteed benefit for seniors. They said voters defeated that idea in November’s presidential election.
The Ryan proposal clashes dramatically with a budget proposal offered by Senate Democrats that could face a vote as soon Friday. The first budget put forward by Senate Democrats in three years, by Sen. Patty Murray, would raise taxes by nearly $1 trillion over the next decade in an effort to stabilize deficits but would not balance the budget in that period.
Trying to reconcile those two visions will consume Capitol Hill in the coming months, as leaders warily look to the next fiscal showdown: the yet-to-be-determined deadline, sometime in late summer, when the Treasury will be out of options to manage the federal debt and will require congressional approval to increase its borrowing authority.
In blunt terms, House Speaker John Boehner, an Ohio Republican, acknowledged Thursday that the path ahead is murky. Republicans are demanding reforms to reduce entitlement spending in exchange for increasing the debt ceiling — a position Democrats object to unless large tax revenue is included beyond the more than $600 billion in tax hikes approved New Year’s Day.
“At this point in time, I don’t know how we go forward,” Boehner told reporters.
As Congress prepared to leave for a two-week holiday recess, the attention was fixed on the chamber’s success in solving an immediate problem: ensuring the government remains funded.
“This is a good bill. I’m proud of it. I’m proud of the fact that we’ve been able to do all this frankly, as smoothly as it’s gone,” Appropriations Committee Chairman Harold Rogers, told Republican colleagues on the House floor, noting the continuing resolution would be passed more than a week earlier than required.
The resolution will block the impact of the sequester by adding money to certain programs just before the across-the-board reduction hits. But all additional money was offset with reductions elsewhere, reflecting the sequester’s impact. The government will be able spend $982 billion for the year.
Defense officials have been saying for weeks that the spending cuts would force them to furlough civilian employees for up to 22 days between April and the end of the fiscal year. Unions representing federal defense workers have been negotiating with management over conditions of the furloughs, which would have begun one day a week from late April.
The overall size of the cuts will remain the same, but the Pentagon will add $10.4 billion to its operations and maintenance budget, where shortfalls have led to plans to curtail training, suspend some maintenance work and other steps that commanders feared would take a toll on troop readiness. Also, the agency will be able to move forward with new investments and contracts that had been held up.
Defense spokesman George Little called the delay a “responsible step to take in order to assure our civilian employees that we do not take lightly the prospect of furloughs and the resulting decrease in employee pay.”
It was unclear Thursday whether a handful of other agencies afforded some flexibility by the bill and that had also said their employees faced furloughs would be able to pare back unpaid days. But a lobbyist for the meat industry praised the action for sparing food inspectors.
“We became one of the big examples that was cited of a major impact of sequestration,” said Janet Riley of the American Meat Institute. “If you’re going to put all of our inspectors out, we won’t operate.”
The measure also eliminated the chance of a pay raise for federal employees this year, denying a 0.5 percent increase that Obama had proposed and that otherwise would have taken effect in April. The extension of the pay freeze also applies to members of Congress and high-level political appointees. Federal salary rates have been stagnant since January 2010.