Shutdown Averted, But Congressional Showdown Continues

by Laura Walling, Senior Director of Government Relations, Goodwill Industries International

With a few hours to spare, Congress narrowly avoided shutting down the federal government after passing a continuing resolution to keep the government open until December 3rd.  Lawmakers hope that the extension will given them ample time to pass the twelve appropriations bills, some of which have passed the House, but none have passed the Senate.  Continuing resolutions have become the norm, with Congress enacting one or more in all but three of the last 44 fiscal years.  In addition to keeping the government running, the legislation also provides $6.3 billion to help Afghan refugees resettle in the United States and $28.6 billion to help communities rebuild from recent natural disasters including hurricanes and wildfires.

The House has now shifted focus to the bipartisan infrastructure framework which has already passed the Senate.  At the time of this writing, a vote has not taken place.  Progressives are holding firm on their opposition to passing the bill until the Senate passes a reconciliation package.  The infrastructure bill includes several provisions of interest to nonprofits including grants to for energy efficiency, funding for broadband expansion and digital equity, and a concerning early end to the employee retention tax credit.  Moderates in the House want to see the bill passed and sent to the President as soon as possible.

Details of the reconciliation package which will further President Biden’s Build Back Better agenda are still being negotiated and things are changing rapidly.  What started as a proposal that would cost as much as $8 trillion was lowered to $3.5 trillion in a framework from the House.  To pass the Senate via the reconciliation process, all 50 Democrats would have to support the bill and at least two such Senators want to see the price tag lowered.  Senator Manchin would support a top line figure of $1.5 trillion.  It remains to be seen where the cuts in the $3.5 trillion package would be made.  Some proposals could be removed outright, while others may be time limited and/or have income restrictions and means testing put in place to limit eligibility.  Free community college, universal preschool, paid leave and strengthened childcare support continue to be top priorities.  Goodwill continues to work with our allies and advocate for strong investments in the workforce development system.

How to address the looming debt ceiling is a final point of major disagreement.  The debt ceiling, or debt limit, is the maximum amount of money that the federal government can borrow to meet its existing legal obligations, including Social Security, military salaries, and interest on the national debt.  Once the government hits the debt ceiling and exhausts all other options, it can no longer borrow; since the US government runs an annual deficit, it will run out of money soon after it hits the limit and temporarily default on obligations.  According to Secretary Yellen, the Treasury will run out of money on October 18, at which point the US could default.  Democrats have tried multiple times to extend the debt ceiling, but to avoid a filibuster in the Senate, the measure would need 60 votes – which they don’t have.  The reconciliation bill could address the debt limit, but Leader Schumer has said that he does not want to go that route.  A lot can happen between now and October 18th.  Stay tuned for additional updates and ways in which you can engage and support our advocacy efforts.