Budget Deal Stalls Increasing Chances of Government Shutdown
Political wrangling on payroll tax breaks has stalled the release of a fiscal year (FY) 2012 budget bill that was expected to be released yesterday. A day after key lawmakers reported that Congress had reached a deal on legislation to fund federal programs for the remainder of the 2012 fiscal year, the budget bill has once again stalled.
The fate of the budget deal that would set funding levels for the federal student aid program for the 2012-13 award year is now connected to the fate of a payroll tax benefit package.
“If the [budget bill] moved forward, the House could move its payroll bill and the [budget bill] and leave town, leaving it up to the Senate either to approve the GOP payroll tax cut bill or to let it die," The Hill reports. "This would put Reid and Senate Democrats in a tough position, since they could get the blame for letting the tax cut expire. By holding up the [budget bill], Reid could keep both chambers in town until a compromise is reached on the tax bill, since neither party wants to risk a government shutdown.”
House Republicans approved a one-year extension of the payroll tax cut yesterday despite threats from the President to veto the Republican's version of the bill. Senate Majority Leader Harry Reid said the House payroll tax cut bill is “dead on arrival” in the Senate, where Democrats have their own version of the tax cut extension.
The federal budget is currently being funded by a stop-gap spending measure that is scheduled to expire on Dec. 16. To prevent a federal shutdown, Congress must pass a FY 2012 budget or another stop-gap spending bill -- known as a Continuing Resolution.