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September 19, 2014

Use This Recess to Prepare for Budget Chaos

Congress has begun its annual August recess, with plans to return in early September. Stan Collender looks at the “somehow-still-increasingly-intractable budget politics” that they will face when they return and prepares for “budget bedlam this fall and beyond.”

1. Debt Ceiling. I’m listing this first only because it’s not something that that has to be dealt with immediately. Yes, the debt ceiling will have to be raised at some point, but the latest word from the Treasury is that the “extraordinary measures” it can take to delay the day of reckoning will last into November.”

2. Government Shutdown. It’s important to note that I’m not labeling this ‘fiscal 2014 appropriations.[‘ The truth is that none of the individual appropriations bills — the legislation that supposed to be signed into law before the fiscal year begins — have any real chance of being enacted by October 1. That means we’re talking about a continuing resolution…or a shutdown… concluding that a shutdown is more likely this year than it was last year actually is quite easy.”

3. Sequester. Let me start by correcting a common misperception: If there is a sequester for fiscal 2014, it won’t happen on October 1 or any time this fall. Sequestration takes place 15 days after the end of the session of Congress… at the very least, the possibility of the across-the-board reductions that could happen in January will have an impact on every budget negotiation. For many, the sequester spending levels will be the default position and the minimum they will accept.”

4. The Grand Bargain. Can we all please stop talking about a grand budget bargain this fall as if it is anything but a fantasy?”

5. Tax Reform. See #4 above.”

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