On Congress's Plate: Federal Budget, Debt Ceiling, ESEA and More

This week, the U.S. House and Senate returned to session after an unusually long summer recess. Greeting members upon their return are several pressing fiscal issues.

First, the current fiscal year is set to expire on September 30, and despite action taken in both the House and Senate appropriations committees, neither chamber has made significant progress toward producing a formal budget for fiscal year 2014. As a result, next week the House is expected to vote on a continuing resolution (CR) that would keep the federal government operating until December 15. While Congress’s inability to pass a budget is frustrating, it does, at least in the short-term, protect the National Endowment for the Arts (NEA) from the devastating 50% reduction in funding proposed in the House of Representatives.

What isn’t clear at this time, though, is what will be included in the bill. Democrats in Congress and the president are calling for what is known as a clean CR, which would essentially fund government agencies, including the NEA, at current levels. Some Republicans in Congress are calling for the bill to include a provision that would prevent the Obama administration from funding implementation of the 2010 health reform law. While the inclusion of such a provision might pass in the House, it would be roundly opposed in the Senate (which is controlled by Democrats) and by the president, thereby putting the government at risk of shutting down on October 1.

If and when this issue is resolved, another issue is complicating the budget picture: the looming standoff over whether Congress should approve an increase in the federal government’s debt authority. You may recall that in 2011, Congress and President Obama engaged in an intense debate over whether Congress would agree to raise the Treasury Department’s statutory debt ceiling. At the 11th hour, Congress agreed to approve an increase, but only after the president agreed to significant reductions in mandatory and discretionary spending through a measure known as sequestration.

According to the Obama administration, the Treasury Department will once again reach its borrowing authority sometime in mid-October. As a result, the federal government will default on its loan obligations if Congress does not agree to an increase. While five weeks remain before the threat of default becomes real, Republican leadership in the House of Representatives is calling for another round of spending reductions—reductions that the president has said he will not entertain. The timing and significance of this standoff could have serious implications for negotiations over the budget for FY2014. The president, Democratic leadership in the Senate, and several prominent House Republicans have spoken about the importance of preserving steady funding for the NEA, but NASAA and other arts advocates in Washington are preparing for a difficult budget season this fall.

In other news, several significant pieces of legislation appear to have stalled. You may recall that legislation reauthorizing the Elementary and Secondary Education Act (ESEA) passed out of the Education Committees in both the U.S. House and Senate this year. ESEA is the primary law through which the federal government funds and directs public education programs, including several arts education programs. The law has not been reauthorized since 2002, and the passage by both committees gave rise to optimism that a deal between the House and Senate could be reached. Unfortunately, since passing the legislation out of the House Education and Workforce Committee earlier this year, neither the House nor the Senate has scheduled a vote on the bill.

Similarly, legislation reforming the nation’s immigration laws won overwhelming support in the Senate earlier this year. Arts advocates were particularly pleased that a provision long supported by NASAA was included in the legislation; the provision would fix a shortcoming in current law that results in long and unpredictable wait times for artists seeking O and P visas to perform in the United States. Unfortunately, to date, the House of Representatives has not produced a bill of its own, and with an election year just a few months a way, the prospects for such an action taking place in the House become less certain.

Further complicating matters, of course, is whether the president will ask members of Congress to vote to authorize military action in Syria. Should such a request be made, the timetable for action on all of the issues above will become even more muddled.

As these issues continue to unfold, NASAA will monitor events closely and keep you up to date on any developments. If you have any questions in the meantime, please do not hesitate to e-mail meor contact me by phone at 202-540-9162.