Congress passes stop-gap six-month funding measure

WASHINGTON (Reuters) - The U.S. House of Representatives on Thursday approved a stopgap measure to fund the government for six months and eliminate any threat of a government shutdown fight that could damage lawmakers' re-election hopes.

After spending much of the past two years fighting over cutting government spending, the Republican-controlled House voted 329-91 to slightly raise spending from current levels. Votes in favor were evenly split between Democrats and Republicans.

The bill, which heads to the Senate for a vote expected by next week, will be the last piece of substantive legislation passed by Congress before the November 6 presidential and congressional election. It must be signed into law before September 30, when current government funding runs out.

"We have to pass this important bill to maintain the continuity of our government and to prevent its shutdown," said Representative Harold Rogers, the Republican chairman of the House Appropriations Committee.

The spending measure eliminates one task that Congress needs to complete before it wrangles over the year-end "fiscal cliff" of expiring tax cuts, automatic spending cuts, a debt limit increase and other fiscal deadlines.

By keeping the government's agencies and discretionary programs funded through March 27, lawmakers buy themselves some breathing room in the post-election "lame duck" session to tackle more difficult questions - how to avoid $109 billion in automatic budget cuts that start on January 2, and whether to extend some or all of the tax cuts enacted under former President George W Bush, which expire December 31.

The Congressional Budget Office predicts that the U.S. economy will experience another recession next year if these issues are not resolved. Moody's Investors Service warned on Tuesday that the United States could lose its top-tier credit rating if Congress fails to take action to reduce U.S. debt.

Rival ratings agency Standard and Poor's cut its U.S. rating last year after a grueling battle over raising the debt limit brought the government to the brink of a historic debt default.

That standoff resulted in a budget deal that led to the automatic spending cuts, known as a sequester, which were intended as a painful incentive for Congress to come up with $1.2 trillion in additional deficit reduction. That approach failed and a "meat axe" of $109 billion in across-the-board cuts evenly split between domestic spending and military programs is scheduled to fall on January 2.

NEW PLAN ON DEFENSE CUTS

House Republicans Tuesday took another stab Tuesday at avoiding the automatic cuts for defense, passing a bill that orders President Barack Obama to submit a plan to protect military spending by October 15 without any revenue increases.

The measure, approved on a party line vote of 223-196, faces certain death in the U.S. Senate and has drawn a veto threat from the White House.

Republicans in the House passed a similar sequester avoidance plan in May. Authored by Representative Paul Ryan, now the Republican vice presidential nominee, it attempted to halt the cuts and protect military budgets by substituting deep cuts to programs that aid the poor, including food stamps and Medicaid healthcare.

Ryan made his first appearance on Capitol Hill on Thursday since being chosen as Mitt Romney's running mate last month, but did not participate in the debate. He voted for both the funding resolution and the sequester plan.

Amped up with election-season rhetoric, Republicans dug into their positions insisting that deficit reduction come from spending cuts alone, while Democrats insisted on some new tax revenues from the wealthy.

"You tell the president that his plan cannot include one penny of revenue for reducing the deficit. In other words, you say the president's plan has got to look like your plan," Democratic Rep. Chris Van Hollen told Republicans.

TACTICAL RETREAT

The six-month budget measure passed on Thursday marks a tactical retreat by House Republicans from their demands for deeper spending cuts this year. The so-called continuing resolution funds the government's agencies and discretionary programs -- from defense to education -- at an annual rate of $1.047 trillion, a level set as part of last year's budget deal.

Republicans were seeking a spending level that was $19 billion lower, but backed off to avoid the risk of a nasty shutdown fight that could hurt their party's election prospects in November. Congressional approval ratings plunged to new lows after last year's debt fights.

But the deal assures them that a post-election lame duck Congress won't be able to push through big spending increases.

The measure also provides some increase in funding for specific programs, including federal efforts to combat wildfires, for nuclear weapons modernization and cybersecurity initiatives.

The continuing resolution drew criticism from the conservative Club for Growth business group.

"This CR (continuing resolution) is bad policy simply because it extends big spending programs, layers on extra riders, and provides only short-term funding for the government so that politicians can leave Washington and/or avoid politically sensitive events," the group said in a statement.

(Reporting By David Lawder; Editing by Fred Barbash and Stacey Joyce)

Source: http://news.yahoo.com/house-passes-six-month-stop-gap-government-funding-223036800.html

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