Q+A: What’s next in the budget fight?

By Richard Cowan

WASHINGTON (Reuters) – Now that President Barack Obama and congressional leaders have reached a deal on U.S. spending for the remainder of this fiscal year, averting a government shutdown, what’s left to do on budget matters?

Plenty. Or, as the Republican House of Representatives Speaker John Boehner said on Fox News on Monday: “This is going to go on and on and on.”

Here are some questions for those watching the U.S. budget debate and answers to how things might play out over the next eight months.


Since lawmakers and their staffs are still working on exactly how to achieve the $28 billion in spending cuts on top of the $10 billion already enacted for the fiscal year ending September 30 everyone is still awaiting the details of the 11th hour deal reached on Friday by Obama, Boehner and Senate Democratic leader Harry Reid.

By midnight on Monday, those details should be available after the House Appropriations Committee publishes them.


The House is aiming to vote on Wednesday on funding for the government between April 15 and September 30. If the bill passes, as expected, the Senate probably would vote on Thursday, sending it to Obama for signing into law.

Just one thing to look out for: If too many Democrats and Tea Party Republicans withhold their support — for opposite reasons — the deal would be jeopardized. But that’s an unlikely scenario, especially because lawmakers are eager to leave for a two-week break on Friday.


The House on Thursday and Friday is expected to debate and pass the Republican budget blueprint unveiled last week that aims to trim $6 trillion in spending over a decade.

Senate Democrats will not go along with it though, complaining it asks the poor and middle class to shoulder most of the burden over the long run.

Democrats, who control the Senate Budget Committee, have not yet unveiled their counter-proposal. Committee chairman Kent Conrad has held up its release, hoping it could include a bipartisan plan to reduce deficits over the long term, according to an aide.

The so-called “Gang of Six” senators working on this plan — Conrad and fellow Democrats Mark Warner and Dick Durbin, and Republicans Saxby Chambliss, Tom Coburn and Mike Crapo — could finish up their work as soon as this week.

There is widespread skepticism that the House and Senate will be able to work out a deal on the budget blueprint. If they cannot, fiscal 2012 spending bills can move forward, but the process becomes messier.

A new wrinkle: Obama is scheduled to unveil his latest plan for tackling deficits long-term on Wednesday.


The Treasury Department desperately wants Congress to increase the amount of debt the country can rack up. Currently, it is capped by law at $14.3 trillion and the debt is galloping along, now at around $14.287 trillion.

The debt ceiling might be hit in mid-May, but Treasury says it could use some tools to put off the day of reckoning until July 8.

Without congressional action, the United States could default on its loans, many of which are held by foreign investors such as China, Japan and Britain. That would have enormous global implications.

Boehner acknowledges the potential fallout of a default but says he will not agree to raise the debt ceiling until he sees action on the underlying causes of record U.S. deficits.

Boehner and other top Republicans have said any debt-ceiling increase will have to contain measures to cut government spending in order to pass the House.

The Obama administration is nervous about the debt limit legislation getting sucked into a Capitol Hill brawl, further unsettling financial markets.

Some Tea Party fiscal conservatives want to see Congress pass, and the states ratify, a constitutional amendment requiring a balanced budget.


The budget blueprints written by the president and congressional leaders every year provide tax and spending guidelines and are never actually enacted into law.

The one-dozen fiscal 2012 appropriations bills Congress will debate are the actual mechanism for government spending on domestic programs — the same ones that have been bitterly fought over for the rest of the current fiscal year.

Given the deep splits in Congress, it is unlikely Congress will approve every one of them in an orderly way. That means Congress likely will engage in partisan fights over spending levels contained in these bills. Failure to pass them by October 1 could set the stage for government shutdowns.

(Additional reporting by Andy Sullivan; editing by Mohammad Zargham)

Q+A: What’s next in the budget fight?