Monday 26 September 2011

Shutdown looms as Congress debates spending plan

WASHINGTON  - Congress is once again allowing shutdown politics to bring the federal government to the brink of closing.


For the second time in nine months, lawmakers are bickering and posturing over spending plans. The difference this time is that everyone agrees on the massive barrel of money to keep the government running for another seven weeks.


"It is embarrassing," Sen. Mark Warner, D-Va., admitted Sunday on CNN's "State of the Union." Warner asked: "Can we, once again, inflict on the country and the American people the spectacle of a near government shutdown?"


At issue is a small part of the almost $4 trillion budget intended for an infrequent purpose: federal dollars to help victims of floods, hurricanes, tornadoes and other natural disasters and whether some of the expense should be offset by cuts in other government spending.


This sort of crisis management has cost Congress credibility in the eyes of the electorate, with about eight in 10 Americans disapproving of the institution's performance after this summer's debt crisis. A major credit agency downgraded the nation's ratings as a result, unnerving the world's financial markets.


The current standoff raises a question: If lawmakers can't even agree to help victims of natural disasters, how are they going to strike a deal to cut $1.5 trillion in spending this fall in the white-hot climate of presidential and congressional politics?


The uncertainty isn't helping officials in Joplin, Mo., desperate to"rebuild homes and put people back to work after a devastating tornado in May.


The House passed a "common sense measure," House Speaker John Boehner, R-Ohio, told reporters during the Senate vote. "It's time for the Senate to move."
Senate Majority Leader Harry Reid, D-Nevada, announced his intention to push for a new vote Monday on a compromise package incorporating the GOP's lower overall disaster relief spending levels while eliminating any cuts to clean energy programs.
Congressmen and senators need to "cool off for a little bit," Reid said Friday. "There's a compromise here."
"More reasonable heads will prevail," he predicted.
Meanwhile, the agency responsible for doling out disaster relief money -- FEMA -- could run out of funds as soon as Monday, according to Reid.
"If Congress does allow the balance of the Disaster Relief Fund to reach zero, there are laws that govern federal agency operations in the absence of funding," according to a FEMA statement released Friday. "Under law, FEMA would be forced to temporarily shut down disaster recovery and assistance operations, including financial assistance to individuals until Congress appropriated more funds. This would include all past and current FEMA recovery operations."
FEMA spokeswoman Rachel Racusen told CNN Friday that the agency is exploring other funding options as a way to continue providing disaster relief.
The House GOP legislation includes $3.65 billion in new disaster relief funding -- $1 billion in emergency funds available when the bill is enacted and roughly $2.6 billion to be budgeted for those federal response agencies for the 2012 fiscal year that begins October 1.
One key sticking point is that the House bill requires that the $1 billion in immediate disaster funding be offset with $1.5 billion in cuts to a loan program that helps automakers retool their operations to make more fuel-efficient cars. Another $100 million would be cut from an alternative energy loan program that provided funding for the solar panel firm Solyndra, a company that declared bankruptcy late last month despite receiving a $535 million federal guarantee in 2009.
Last week, the Senate passed a spending bill with bipartisan support that would provide $6.9 billion for FEMA and other federal agencies, to be used both for immediate disaster relief as well as in the new fiscal year. The Senate version required no spending offsets.
Democrats have said they will continue to oppose any offsets to counter the emergency spending for natural disasters.

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