Congress Must Move Quickly on Budget, Debt Limit

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Congress returned from recess Monday confronted by rapidly approaching fiscal deadlines. The Senate and House will both be in session only eight more days before the fiscal year ends Sept. 30. Lawmakers will need to quickly approve a spending plan for the new fiscal year and take action on the debt limit.

With overall spending targets in the House and Senate $91 billion apart and no appropriations bills signed into law, Congress has little choice but to pass a continuing resolution or face a government shutdown.

While a continuing resolution is clearly preferable, sequestration has made adopting one more difficult because Congress must decide whether to set it at pre- or post-sequester levels. In a recent blog post, Concord Coalition analyst Ben Ritz points out that the challenges posed by the sequester will only get worse as time goes on.

“With sequestration cutting deeper into discretionary spending in the coming years — in addition to the reductions imposed by the Budget Control Act of 2011 — Congress will find these low levels of discretionary spending increasingly difficult to maintain,” Ritz says. “It would be wiser to replace the sequester with comprehensive fiscal reforms, including measures to slow the growth of entitlement programs — a key driver of future deficits.”

He also points out that a government shutdown would be less likely to trigger panic in global financial markets than failing to raise the debt ceiling — a failure which he says would be “fiscal and economic suicide.”

External links:
Treasury Secretary Jack Lew’s Letter to Congress on Debt Ceiling Increase
Federal Debt and the Statutory Limit (CBO)

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