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Friday October 31, 2014

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Washington Resumes Normal Operation

With passage of a bill to restore government operations, Washington is now returning to the normal level of activity. The bill passed with a vote of 285-144 in the House of Representatives and 81-18 in the Senate. It ends the 16 day shutdown and enables government workers to return to their positions.

Most Americans welcome the reopening of the national parks. Park rangers and other civil service workers from hundreds of departments are now back at work. All of the civil service workers will receive pay for the 16 day shutdown.

The bill funds the federal government until January 15. The debt limit has been increased and is expected to be sufficient to carry the nation through February 7, 2014.

President Obama held a press conference on October 17th and indicated that there were "no winners" in this event. He urged Congress to return to work on three major projects. First, it is important to come to a budget agreement. Second, he hopes that the House will proceed with immigration reform. Third, it is necessary to pass a new farm bill.

President Obama continued to call for a "balanced" approach. The Democratic proposal involves substantial new taxes and spending.

The two Republican leaders of the House and Senate taxwriting committees gave reluctant support for the bill. Sen. Orrin Hatch (R-UT) is the Ranking Member of the Senate Finance Committee. He voted in favor of the bill and stated, "This bill isn't perfect, but it is a path forward to reopen the government and prevent an economy-shaking default. When Republicans control only one-half of one-third of the federal government, we have to understand what is achievable and what is not. This legislation locks in significant spending reductions against bitter opposition from the other side of the aisle who want to raise the American people's taxes to spend more money we simply don't have."

The Chairman of the House Ways and Means Committee is Dave Camp (R-MI). Camp also voted for the bill because he noted it is important to "prevent the country from defaulting on its debt." However, Camp also expressed concern that "families are still struggling in this economy, and they deserve a government that can work together to tackle the tough issues. One of the most important things Congress can do to strengthen the economy, encourage job creation, increase wages and reduce spending is to fix our broken tax code."

Editor's Note: The shutdown and the bill reflect major differences between the two parties. The Joint Budget Committee that is now tasked with creating a resolution will find major challenges in coming to agreement.

Friendly Tone in First Budget Meeting

The four leaders of the House and Senate Budget Committees met for a cordial session on Thursday, October 17. The key Senate leaders in attempting to craft the new budget agreement are Senate Budget Committee Chair Patty Murray (D-WA) and Ranking Member Jeff Sessions (R-AL).

The House Budget Committee Leader is Chairman Paul Ryan (R-WI). The ranking member on the House Committee is Rep. Chris Van Hollen (D-MD). The Thursday meeting was described as "friendly in tone" and will be followed by conferences with the full 30 members of both budget committees.

It is likely that the future meetings will be fairly contentious. However, House Budget Chairman Paul Ryan stated, "We want to look for ways to find common ground. Our goal is to do good for the American people."

Sen. Murray also noted in a positive statement that, "Our challenge is to have a reconciliation between the House budget and a Senate budget." However, Murray warned that this may be difficult. This is the first actual conference committee on the budget since 2009. The House budget drafted by Chairman Ryan includes far greater spending reductions and major changes in Medicare.

The Senate budget created by Sen. Murray reflects a "balanced" approach. This translates into substantial new taxes and higher spending levels. Murray noted that Chairman Ryan is not going to accept her budget. She stated, "I know he is not going to vote for mine. We are going to find the common ground between our two budgets that we both can vote on."

Sen. Sessions also agreed that it is important not "to raise expectations beyond reality." However, he believes there are some potential areas of agreement.

Editor's Note: The bill continuing government operations until January 15 maintains the sequestration levels of spending. However, the House and Senate budgets are approximately $1 trillion apart on spending and taxes. This divide has previously been extremely difficult to bridge. In the meantime, House Ways and Means Chair Dave Camp indicates that he will proceed with the markup of a tax reform bill. The House Ways and Means staff have been drafting bill language for the past several weeks and several committee members hope to have an actual bill to mark up by the end of October.

Published October 18, 2013
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