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Friday, July 31, 2015 - 12:13

US Budget Week: GOP, Democrats Stake Out Fall Fiscal Stances


--House Speaker, Senate Majority Leader Reject Summer Talks
--Tsy's Lew Reminds Hill Debt Ceiling Must Be Lifted
--OMB's Donovan Warns GOP Of Vetoes Sans Discretionary Deal

WASHINGTON (MNI) - Even though the calendar says it's July, much of Washington is already thinking about September and the intense fiscal battles that await Congress and the White House.

The House has begun its summer recess and the Senate will hit the road next week, but the fiscal positioning for the autumn is already in full swing.

Congressional Democrats have spent the last several months calling for immediate bipartisan budget talks to rewrite the budget sequester and adjust discretionary spending limits for the 2016 fiscal year.

But top Republican leaders continue to summarily dismiss this idea.

"We're not talking about negotiation today," Senate Majority Leader Mitch McConnell said Thursday. "When we come back after August, we'll discuss the way forward on getting the government funded," he said.

When pressed on whether Congress should already be working on a stop-gap spending bill, or CR (for continuing resolution", McConnell was adamant.

"We haven't even begun to talk about the CR yet. We're going to discuss how to fund the government after the August recess," he said.

So far, Congress has approved none of the 12 annual spending bills for FY 2016, so a stop-gap measure will be required to keep the government funded when the 2016 fiscal year begins October 1.

House Speaker John Boehner has acknowledged that Congress will need to pass a stop-gap funding bill, but has said he has not even begun to think about the terms of the CR.

"No decisions have been made about that. We'll deal with it when we get back in September," Boehner said last week.

At his final Capitol Hill briefing of the summer on Wednesday, Boehner said he's confident that lawmakers will be able to manage spending bill deadlines and other pressing issues.

"I'm confident as we get into this fall we're going to have pretty smooth sailing," he said.

"Of course, we're going to glide right through it. It's going to be exciting...I'm looking forward to a very successful fall," Boehner said.

Republican aides say discussions on the length of the CR have begun at the staff level.

House Appropriations Committee Chairman Hal Rogers told reporters this week that if past patterns obtain, Congress will likely pass a CR that funds the government for a month or two while talks take place on longer-term spending bills.

Sen. Chuck Schumer, the third ranking Senate Democrat, continued this week to press for immediate bipartisan talks on the FY 2016 budget, repeating arguments he has been making since the spring.

"We're ready to sit down. The president's ready to sit down. Where are they (Republicans)? They can't get out of the pretzel that they've tied themselves in because of the right wing," Schumer said at a briefing.

"It would be a dereliction of duty for the Republicans to skip town without making any effort to avoid the cliff that's fast approaching. When we return from the August break, we'll have four short weeks to reach an agreement. They know they can't just jam the appropriations bills down our throats. That's not happening. So there's one solution: negotiate," Schumer said.

White House budget director Shaun Donovan has been calling for months for talks to revise the so-called Ryan-Murray agreement of 2013 that lifted discretionary spending caps for two years and offset this increase with entitlement savings and fee increases. That agreement expires on September 30.

As the House and Senate Appropriations have drafted spending bills this summer, Donovan has sent letters to key lawmakers saying the funding levels in them are insufficient and that President Barack Obama would veto these bills if they reach his desk.

This week Donovan sent a letter to Senate Appropriations Committee Chairman Thad Cochran on the State Department and Foreign Operations appropriations bill, but he made broader points.

Donovan once again called for bipartisan talks to revise the sequester.

"Sequestration was never intended to take effect: rather, it was supposed to threaten such drastic cuts to both defense and non-defense funding that policymakers would be motivated to come to the table and reduce the deficit through smart, balanced reforms. The Republicans' 2016 budget framework would bring base discretionary funding for both non-defense and defense to the lowest levels in a decade, adjusted for inflation," he wrote.

He said Obama "has been clear that he is not willing to lock in sequestration going forward, nor will he accept fixes to defense without also fixing non-defense."

He added: "We look forward to working with the Congress to reverse sequestration for defense and non-defense priorities, and offset the cost with commonsense spending and tax expenditure cuts, as Members of Congress from both parties have urged."

In addition to finding a way to fund the federal government for the 2016 fiscal year, Congress must increase or suspend the debt ceiling by the end of the year.

Treasury Secretary Jack Lew sent a letter this week to House Speaker John Boehner reminding him that debt ceiling legislation will be needed later this year.

He said he will extend the debt issuance suspension period through October 30.

"The effective duration of the extraordinary measures is subject to considerable uncertainty due to a variety of factors, including the unpredictability of September tax receipts and the normal challenges of forecasting the payments and receipts of the U.S. government months into the future," Lew wrote.

"Given this unavoidable uncertainty, Treasury is not able to provide a specific estimate of how long the extraordinary measures will last. Nonetheless, we believe that the measures will not be exhausted before late October, and it is likely that they will last for at least a brief additional period of time. We will continue to update Congress as more information becomes available," he added.

Lew ended his letter with a request - and a jab.

"I respectfully urge Congress to protect the full faith and credit of the United States by raising the debt limit as soon as possible. I hope that Congress will address this matter without controversy or brinksmanship."

--MNI Washington Bureau; tel: +1 202-371-2121; email: john.shaw@mni-news.com

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