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April 12, 2011
Deal Announced
One Hour Shy of Deadline
Lawmakers took negotiations down to the wire on Friday, but emerged
with a deal that would cut $38.5 billion in federal spending over the
next five months, but would finally close the book on the Fiscal Year
2011 budget cycle that has dragged out since the fiscal year began on
October 1, 2010.
According to the
Washington Post, a majority of the cuts will affect
education, labor and health programs, including federal Pell grants,
as well as job training and childre's
health care initiatives.
The more controversial aspects of the Republican proposals that would
have restricted funding for Planned Parenthood and the Environmental
Protection Agency were ultimately removed. But in exchange,
Senate Democrats agreed to hold stand-alone votes on the measures.
With the deal coming late Friday, Congress was forced to pass another
short-term continuing resolution (CR) to fund the government through
Friday, April 15 to allow for the legislative text to be
drafted. The House is expected to vote on the bill tomorrow,
leaving the Senate two days to pass the bill before funding provided
by the one-week CR expires.
That could make for an interesting end of the week in the Senate,
where unanimous consent (UC) will be
required to move the bill expeditiously to the President for his
signature. If any Senator objects to the UC
request, congressional leaders will once again be scrambling for a
solution to avert a government shutdown.
In the wake of last week's deal, attention was already shifting on
the Sunday morning television shows to raising the debt ceiling
(currently set at $14.3 trillion), which the country is expected to
reach in early May. Both sides are already posturing for that
debate.
In addition, the House is expected to begin consideration of Budget Chairman
Paul Ryan's (R-WI) FY12 Budget on Thursday. The Chairman's
budget proposal calls for $6 trillion in cuts over the next 10 years,
while a competing proposal
by the Republican Study Committee calls for $9.1 trillion in cuts
over that same period.
Meanwhile, President Obama will speak to the nation tomorrow about
his long-term budget plan, two months after his FY12 Budget failed to
incorporate many of the recommendations from his own Deficit
Commission last October.
Unlike Republicans' unwillingness to include tax increases in their
plans, Obama plans on taking on revenue and spending, including
entitlement spending programs like Medicare and Social Security.
If you have any questions concerning these issues,
please contact Chris Wagner at 202.772.0924 or cwagner@clarkhill.com.
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