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2011: Past is Prologue

01-13-2012

The second session of the 112th Congress formally convened January 6 for largely ceremonial meetings, though the House and Senate won’t get down to real business until January 17 and January 23, respectively. When they do, the legislative agenda will look a lot like last year’s to-do list mostly, well, because Congress actually didn’t finish its work. But before wading into this year’s agenda, we thought it might be a good time to review the high drama and brinksmanship that marked 2011.

As usual, the budget consumed an inordinate amount of time and energy. Indeed, it wasn’t until April that lawmakers finally settled on fiscal year 2011 appropriations by passing legislation that cut an unparalleled $40 billion in federal spending.  Also in April, the House adopted Rep. Paul Ryan’s budget resolution, which would have cut $6 trillion in spending over 10 years; dramatically remake major entitlement programs; and reduce non-security discretionary spending below 2008 levels. But all that was overshadowed when Standard & Poor announced that it was downgrading the U.S. credit rating for the first time in the country’s history. For the next several weeks, “gangs” sprung up across the federal triangle, all struggling to come up with a bipartisan agreement to avoid a fiscal meltdown.

Eventually, just before the August recess, a debt limit agreement was forged that cut over $900 billion by freezing discretionary spending, with the promise of at least another $1.2 trillion in spending cuts later in the year. When the super committee tasked with coming up with those cuts threw in the towel in November, that set the stage for across-the-board cuts, a process known as sequestration, to be triggered in January 2013.

Back on the appropriations front, it wasn’t until December—11 weeks behind schedule—when Congress and the president finally reached an accord over an omnibus appropriations bill for fiscal year 2012. (On the bright side, the agreement marked the earliest finish in seven years!)

So what’s on the docket for 2012? Here’s a short list:

  • Negotiating the extension of the current payroll tax holiday and unemployment insurance benefits.
  • Looking for common ground on job-creation legislation.
  • Averting deep cuts in Medicare payments to physicians and hospitals.
  • Finding new revenues to fund highway, transit and rail programs.

 

Undoubtedly, the same partisan splits we saw in 2011 will be reprised in 2012. But we’ll delve more deeply into the specifics in upcoming blogs.

 

Dom Ruscio, Partner

Cavarocchi-Ruscio-Dennis Associates


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