Fed Update from NAM -- Bipartisan deal narrowly avoids default, reopens Federal Government.

By CMTA Staff

Capitol Update, Oct. 17, 2013 Share this on FacebookTweet thisEmail this to a friend

After a flurry of last-minute negotiations, Congress approved an agreement on October 16 that raises the federal government’s borrowing authority and provides funding for the federal government. The President signed the legislation just after midnight on October 17. While the 11th-hour deal avoided the federal government defaulting on its financial obligations and sends federal employees back to work after a 16-day furlough, it is only a temporary reprieve from the short-term fiscal issues facing the nation and does not address our significant, longer-term challenges.

In a statement issued immediately after the House and Senate votes, National Association of Manufacturers (NAM) President and CEO Jay Timmons noted that while the agreement “avoided immediate economic catastrophe…President Obama and Congress have done nothing to address the underlying causes of our serious fiscal problems. All that is guaranteed is that we will find ourselves in this situation again in a few months.” He called on lawmakers to “implement reforms that will address our broken tax code and massive entitlement costs to help our nation avoid such brinksmanship in the future.”
 
In recent weeks, NAM and many of its members and their employees communicated to Congress and the White House on a regular basis urging them to put aside partisan differences and support raising the debt limit to avoid a default that would have a catastrophic, long-term impact on our economy, businesses and workers.
 
The agreement, crafted by Senate Majority Leader Harry Reid (D-NV) and Senate Minority Leader Mitch McConnell (R-KY), funds the federal government until January 15 and raises the nation’s borrowing authority until February 7, forcing another debate on serious fiscal issues early in 2014. In the meantime, the agreement also calls for the House and Senate to conference their respective fiscal 2014 budget resolutions approved early this spring and come up with a compromise budget plan by December 13. 
 
The House and Senate conferees, who were appointed on the evening of October 16, are faced with a difficult task. The House and Senate have not agreed on a budget plan since 2009, and the separate plans approved by the two chambers are far apart on some critical issues. For example, the Senate plan calls for $1 trillion in new taxes through tax reform, $280 billion in health care savings and $1.85 trillion in deficit reduction over 10 years. In contrast, the House plan includes revenue-neutral tax reform, $3.7 trillion in mandatory spending cuts and $4.6 trillion in deficit reduction over 10 years. 
 
The conferees include seven House members (four Republicans and three Democrats) and 21 senators (12 Democrats and nine Republicans). House Budget Committee Chair Paul Ryan (R-WI) and Senate Budget Committee Chair Patty Murray (D-WA) will head the group. In addition to reconciling the House and Senate budget plans, the conference committee is expected to address the current across-the-board sequester cuts totaling $85 billion, which kicked in March 2013, and additional cuts of $109 billion ($54.7 billion from defense and $54.7 billion from nondefense) set for January 2014.
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