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Temporarily Avoiding the Cliff: Congress reaches deal that will fund U.S. Government for 6 months

Posted in News and Recent Decisions, Uncategorized

Through use of a Congressional budget tool called a “continuing resolution,” leaders of the U.S. Congress reached a deal yesterday that would fund the United States Government for part of the upcoming 2013 Congressional fiscal year (the entire Congressional fiscal year 2013 is October, 2012 through September, 2013).  Funding under the continuing resolution would be from  October 1, 2012 through March 31, 2013 at spending levels very similar to what they have been for the current Congressional fiscal year which ends on September 30, 2012.  Continuing resolutions are special joint resolutions of the Senate and House that are used to fund governmental agencies when a formal appropriations bill has not been signed into law by the end of  a Congressional fiscal year.  By agreeing to this contininuing resolution, Congress has temporarily avoided a political showdown about  the so called “fiscal cliff” that is looming at the end of 2012 and has also delayed such showdown until after the upcoming presidential election in November, 2012.  The “fiscal cliff” refers to the fact that under current law, all of the Bush-era tax cuts and Obama stimulus measures such as the payroll-tax reprieve  are set to expire on December 31, 2012 at the same time when cuts in federal spending that were passed in 2011 will be kicking in.  Many on both sides of the political aisle believe that if action is not taken before then, i.e. that we fall off the “fiscal cliff,” our economy will be rocked back into recession.