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Implications Of Short Term Budget-Debt Deal

Last weeks’ presidential-congressional agreement on a December 8, extension of the debt ceiling and FY 2018 appropriations has both political as well as practical effects.

For starters FEMA receives some much-needed immediate funds to help address the hurricanes.  The nearly $15 billion is just a down payment and will have to be addressed again very shortly.  The reality of the deal is that along with that disaster relief funding, the debt ceiling and FY 2018 appropriations, all will have to be confronted by Congress just before the December holiday break.

The political impact is unclear except for the fact that Republican leaders are angry that the President rejected both Republican proposals to extend the debt ceiling for at least six months if not their preferred (and the preference of the Secretary of Treasury) to extend it beyond the 2018 election.

With the ever-shift political dynamics here is what Congress must now address by December 8:

  • Raise the debt ceiling (presuming Treasury cannot use tools to stretch the December 8, deadline).
  • Extend funding for the rest of FY 2018.
  • Adjust the budget caps to allow at least for more defense spending (or the across the board cuts trigger in January).
  • Deal with various mandatory programs that were automatically extended until December 8 but may be challenged by short-term funding: Title IV-B child welfare programs parts 1 and 2, Home Visiting, CHIP, TANF and several other programs.

The unknown is what else each side will attempt to leverage.  For Democrats that will likely include a DACA replacement and for Republicans it may mean budget cuts or boarder security.  There is also the potential that Congress could address some of these issues independently.

 

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