Government Nears Shutdown as Congress Debates Spending Bill

The U.S. House of Representatives and the Senate have yet to agree upon terms for new emergency funding, leaving them unable to vote on a short-term spending measure needed to keep the government running into the new fiscal year that begins on October 1.

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The measure includes additional money for the Federal Emergency Management Agency and Army Corps of Engineers, after their emergency aid funds were depleting following Hurricane Irene, Tropical Storm Lee, and various wildfires and tornadoes that ravaged the U.S. this year.

Last week, House Republicans passed a bill that would cut spending elsewhere in order to offset some of the increased disaster relief aid, but Senate Democrats immediately voted down the measure, 59-36, opposing any offsets for emergency aid. The package would fund the government for the first seven weeks of the new fiscal year, through November 18, beginning Saturday. If Congress cannot agree upon a short-term spending plan by Friday, the last day of the current fiscal year, the result will be a partial government shutdown.

Republicans want less disaster aid including in the bill than do their Democratic colleagues, and also want to pay for it by cutting funding for programs designed to encourage clean energy innovation. According to House Speaker John Boehner, an Ohio Republican, the House passed a “common sense measure” and now “it’s time for the Senate to move.”

Senate Majority Leader Harry Reid, a Nevada Democrat, is looking for a compromise, pushing a package that would incorporate the GOP’s lower overall disaster relief spending, while eliminating aspects of the measure that would cut spending on clean energy programs. On Friday, Reid said that congressmen and senators needed to “cool off for a little bit” and predicted that “more reasonable heads will prevail,” as talks continue. However, FEMA could run out of funds as soon as today.

“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 is currently exploring other funding options.

The measure passed by the House last week includes $3.65 billion in new disaster relief funding — $1 billion available as soon as the bill is enacted and roughly $2.6 billion for the 2012 fiscal year beginning Saturday — but would offset the $1 billion in immediate funding with $1.5 billion in cuts to a loan program that helps automakers retool operations to make more fuel-efficient cars. Another $100 million would be cut from an alternative energy loan program that notoriously providing funding for Solyndra, which filed for Chapter 11 bankruptcy last month after receiving $535 million federal guarantee in 2009.

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The Senate also passed a spending bill last week, which received bipartisan support and would have provided $6.9 billion for FEMA and other federal agencies without any spending offsets. Democrats remain adamantly opposed to any measure that would require spending cuts.