This week, Senate Majority Leader Harry Reid, House Speaker John Boehner and officials from the White House reached a deal in principle to fund the federal government, through March 2013, at levels set during tense budget negotiations last year. If you recall, threats of a government shutdown were commonplace as the two parties negotiated the budget late last year. With current funding set to expire just weeks before the 2012 elections, neither Republicans nor Democrats wanted to have a high-profile government shutdown fight and risk the political consequences.
The deal leaves in place planned “sequestration” cuts, amounting to a 2 percent across-the-board reimbursement cut for Medicare providers, set to go into effect January 1, 2013. Additional legislation will be needed to stave off $1.2 trillion in total cuts to defense and non defense programs as a result of the deal reached as part of the debt ceiling negotiations in the summer of 2011. With congress heading home for their customary August recess, the deal will likely be voted on upon their return in September.
The passage of the spending agreement by the house and senate will likely be the only piece of major legislation that is signed into law prior to the 2012 elections. All eyes now point to the lame duck congressional session that will be convened after the November elections and will have a jam-packed agenda to deal with. Finding pay for options for the sequestration cuts, the renewal of income tax cuts for all income brackets, the renewal of a tax extenders package that includes many popular tax breaks for alternative energy and business development are just a few of the topics that will be discussed; many more are sure to pop up, especially if the elections produce a new President or Senate/House majority.
OPGA Government Relations will keep you informed on the lame duck session and any other issues that come up between now and the election.