Congress Passes Stopgap Funding to Avert Government Shutdown

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The Senate gave final approval Thursday night to a short-term extension of federal funding to keep the government running for three more weeks while shoving a raft of fiscal and policy fights into the new year.

The spending measure, which now heads to President Donald Trump for his signature, would maintain current levels of spending through Jan. 19 and provide $4.5 billion in emergency funding for missile defense work as well as other Pentagon expenses.

It passed the Senate 66-32 after winning approval in the House 231-188.

It also would provide money for several health programs and a funding bridge of $2.85 billion for the Children’s Health Insurance Program, or CHIP. A temporary extension of a section of the Foreign Intelligence Surveillance Act, or FISA, that allows collection of emails and other messages without a warrant also was included.

Among the most noteworthy provisions in the stopgap measure is a waiver of a budget rule that would trigger automatic cuts to Medicare and dozens of other federal programs because of the deficit impact of the tax overhaul passed this week.

The waiver would clear the way for Trump to sign the tax legislation before the end of the year rather than waiting until January.

Disaster Aid

The Senate shelved a separate $81 billion disaster aid package passed by the House, a blow to representatives from Texas, Florida, California and Puerto Rico, all of which were hit by devastating natural disasters this year.

It was done in by a group of Republicans who argued it should be offset by spending cuts elsewhere and some Democrats who decried the package insufficient and want to use it as leverage on other issues.

The debate over the aid package now will carry into January, where it will be added to an already loaded agenda for lawmakers when they return from a holiday recess, which includes debates about the budget, immigration, health care and raising the federal debt ceiling.

The wrangling that it took to cobble together a stopgap spending plan that could pass both the House and Senate drained away some of the euphoria in the Republican ranks left over from passage of their tax overhaul.

“I think it’s an acceptable solution,” Representative Brett Guthrie, a Kentucky Republican, said after the House voted for the pared down stopgap measure. “It’s just frustrating that we’re doing it this way.”

House GOP leaders backed down from their initial plan to appease the defense hawks in their ranks by attaching full funds for the 2018 military budget and forcing the Senate to decide how to approach the Democrats whose help they would need to help pass it.

There was simmering resentment — as Republicans cast their votes just before leaving town for the holiday — that their policy making would once again be held hostage by the minority party in the Senate.

Republican unity still held strong enough in the House to approve the spending bill without having to count on votes from Democrats — 14 of whom voted for the measure.

But Wednesday’s late night negotiations on how to fund the most basic functions of government yielded a bill that was exciting to no one, but ultimately acceptable enough to send over to be tested by the tricky math of the slim GOP majority in the Senate.

As a sign of just how deep partisan divisions run, Republicans and Democrats couldn’t even agree on how to fund the Children’s Health Insurance Program, which provides assistance to low-income families. This program has been running on emergency funding for months, and in this bill receives only enough to get it through March.

The House passed a version of CHIP funding earlier this year, but Democrats opposed it because its costs were offset by cuts to other government health programs.

The Veterans Choice Act, to give veterans more flexibility in their health care options, also receives $2.1 billion under the spending bill.

And the defense spending that some conservatives have for weeks said was their No. 1 priority will continue for just three more weeks, along with some extra funds that the military requested for things like ballistic missile defense and repairs to naval ships.

House Speaker Paul Ryan, recognizing the political risks of removing the full defense spending bill because of Senate concerns, assured his members Wednesday night that Defense Secretary James Mattis had signed off on this strategy, according to a person who was in the closed-door meeting.

Republicans still have to negotiate with Democrats on the ultimate levels for defense and non-defense spending for fiscal year 2018, because the Budget Control Act of 2011 caps those costs.

Those levels must be worked out before congressional appropriators can write the package of spending bills that will last until the end of fiscal year 2018. Ideally, this legislation would be ready ahead of the new Jan. 19 shutdown deadline.

Tough Negotiations

However, the acrimony left over from Ryan switching strategies in the hours between the tax vote and the spending vote could limit his wiggle room on the tough negotiations that await when Congress returns in January.

Democrats stepped down from their demands for immigration protections this year, but the status of undocumented people brought to the U.S. as children must be resolved before March. Some Republicans like Florida Representative Carlos Curbelo and Arizona Senator Jeff Flake say this immigration fix is a priority for them as well.

Republican Senator Susan Collins of Maine also relented on her demand for legislation this year that would stabilize health insurance markets, but these bills — which are extremely unpalatable to House Republicans — are certain to resurface next year.

Although the Republicans who control Congress are on their way to avert a government shutdown on the heels of their tax victory, the tough decisions they didn’t confront this week sets them up for a difficult start to 2018.

Copyright 2017 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Certain firms are expected to benefit from the changes, while others may get mixed results.

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