Budget Deficit

Avoiding a Government Shutdown Means Adding $30 Billion (at Least) to the Debt

The House-passed continuing resolution died Friday in the Senate, but any deal to keep the government operating will likely do similar damage to the deficit.

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Caro / Sven Hoffmann/Newscom

Keeping the government open will come with a hefty price tag, and lawmakers seem poised to put it all on the nation's credit card.

With a possible shutdown of the federal government looming unless lawmakers agree to a new spending plan before midnight on Friday, the House on Thursday passed a continuing resolution (CR) extending current spending through February 19. Tied up with the CR to keep the government open are bills to extend funding for the Children's Health Insurance Program (CHIP) for six years and a deal to address the status of so-called "Dreamers," illegal immigrants who came to the United States as children, which is itself tied up with Trump's desire to ramp-up security along the U.S.-Mexico border.

Because the CR requires 60 votes to pass the Senate, Republicans are unable to pass it without Democratic votes. Those votes are, for now, not forthcoming. What happens in the next 10 hours, before the shutdown happens, is still anyone's guess—about the only thing that is clear is that House-passed CR is dead in the Senate.

And for anyone worried about the status of the federal debt, that's good news.

Though it was largely lost behind the other issues being discussed in advance of the possible shutdown, the CR passed by the House on Thursday would have added another $30 billion to the national debt. It would have ignored spending caps set by Congress in 2011 and would have disregarded cuts implemented as part of the 2013 sequester.

Tax cuts included in the CR would further add to the national debt. As the Committee for a Responsible Federal Budget points out, the bill would have included a two-year delay of the so-called "Cadillac tax" on high-cost health insurance plans, which is set to go into effect in 2020, a one-year suspension of the health insurer tax, which was suspended last year, went into effect for 2018, and would be suspended again for 2019, and a two-year delay of the medical device tax, which came back into effect in 2018 but no tax has been due yet.

"We need our leaders to reach a budget deal that sets achievable discretionary caps and finances any near-term spending increases with permanent spending cuts or new revenue," said Maya MacGuineas, president of the CFRB, in a statement about the House-passed CR. "The ultimate goal should be to reduce ballooning deficits – this bill increases them."

It could get worse. Rep. Justin Amash (R-Mich.) tweeted Thursday before the House vote that the CR was a prelude to further increases in those spending caps.

Coming as it does in the immediate aftermath of the passage of a major tax cut that will reduce government revenues by about $1.5 trillion over the next 10 years, the idea that Congress is trying to increase spending seems like the height of fiscal insanity. Every dollar spent today must be collected in taxes someday later. Cutting taxes is great, but it's also easy. Cutting spending, it seems, is near impossible for Congress to even consider—indeed, they are far more interested in finding ways to get around existing limits on spending than they are in reducing spending at all.

It appears that the House-passed CR is dead. Whatever comes next could quite possibly be worse.

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  1. Unless Congress comes after the extensions and passes a budget bill that lowers overall spending.

    Clearly Republicans are scared to end Senate rules requiring a 60 vote majority, so they feel they need to cater to Democrat demands.

    The Senate should vote to change Senate rules which only requires a simple majority. Change the Senate rules to simple majority on all bills. If Republicans ever lose their majority in the Senate, vote to require 75+ votes for all legislation and that changes to Senate rules require 100 votes to pass.

    1. “If Republicans ever lose their majority in the Senate, vote to require 75+ votes for all legislation and that changes to Senate rules require 100 votes to pass.”

      Won’t the incoming Senate majority simply rewrite the rules as they see fit?

      1. They would need 100 votes to change the rules. A single Senator could prevent the rule change.

      2. Each new session of the Senate agrees to new rules. So the “100 votes” rule of the previous session would simply be removed.

    2. Lol.

      Also, I don’t think the Republicans can even hold their 51 votes together to pass something even if they only needed a simple majority.

      1. Except Tax reform.

        The Republican fear over lefty media propaganda is starting to falter. Maybe ObamaCare repeal in 2018 or maybe in 2021 after Trump second term as president.

        1. I was specifically talking about the current budget battle.

  2. So since reason is so concerned over the deficit, I guess they are opposed the Senate “Dreamer” bill that would add close to 30 billion dollars to the debt.

    CBO Says Senate DREAM Act Would Cost Taxpayers Billions

    https://tinyurl.com/y7vxe4fx

    1. That’s different. And also not a peep on how the shutdown will end up costing even more because, of course, we have to give all those gov’t workers backpay. It’s not their fault that they’re already working jobs they can never be removed from and receiving higher pay than their private sector twins.

  3. Cutting taxes is great, but it’s also easy. Cutting spe

    Sorry, but I can’t hear you over the sound of all the #Winning!

  4. Who cares, it’s not real money anyway. It’s just a bunch of numbers based on wishful thinking.

  5. When will Republicans start limiting government?

    If I had a $5 million earmark for every time I heard that ?

    1. They’ll get right on it any minute now, they promise.

  6. Amash can blow it out of his craphole because he voted to add $1.5 trillion to the debt just a few weeks ago. This after voting against giving aid to hurricane victims because it would add to the debt.

    “But I want a minarchist government eventually!” is of course not an excuse, since a grown adult should know that he’s not going to get that any time soon.

    Obviously, sleazy wordplay doesn’t change the fact that he voted, as a policy, to give tax cuts regardless of its massive effect on deficits and debt, and only cares about deficits and debt when it had to do with helping desperate people, which makes him a bad person and a hypocrite.

  7. Says a lot about the GOP’s priorities that given the choice between an increase in welfare spending and allowing minorities to stay in the country, DACA is the deal breaker.

  8. Only $30B?

    Why put it on my credit card and give yourself a 25% tip!

  9. National Debt Looms Out Of Control – US Government Forced To Sell off Assets, Seeks Bankruptcy Protection Status – Future Forecasts.

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