Harvey relief high on priority list as Congress returns
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By Jessica Wehrman
Threat of a government shutdown looms as end of fiscal year nears.
Even before Hurricane Harvey, lawmakers had a legislative storm brewing for their long-awaited return to Washington.
Now with Harvey relief rising to the top of the priority list, it has potential to impact everything from the border wall to the threatened government shutdown.
And with so many people in Houston and other communities in Harvey's path needing help, all eyes will be on Congress to see if it can put aside partisan tendencies and tackle a daunting to-do list.
ExploreRELATED: How you can help the victims of Hurricane Harvey
Some legislative years are marathons. This one ends as a sprint. With a September 30 deadline looming on a host of big-ticket items, such as keeping the government open and raising the debt ceiling, there are just 12 days when both houses of Congress are scheduled to be in session before the end of the fiscal year.
Here is a list of what's on tap and why you should care.
The debt ceiling
Deadline: Sept. 29
Why it matters: Unless Congress raises the $19.8 trillion debt ceiling this fall, the government will run out of money to pay its bills. It's unclear exactly when the money will run out — it could last into mid-October — but Treasury Secretary Steve Mnuchin has imposed a Sept. 29 deadline for Congress to act.
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The hang-up: The House Freedom Caucus — a group of between 30 and 40 conservative Republicans including Reps. Jim Jordan, R-Urbana, and Warren Davidson, R-Troy — threaten to oppose any efforts to increase the debt limit unless there are corresponding cuts in spending.
Democrats and GOP leadership, meanwhile, say they want to vote for a debt ceiling increase only if no other strings are attached, though some Democrats have hinted they could use the debt ceiling to demand that they, too, are involved in tax reform.
"There should not be a question about our debt ceiling," said Rep. Joyce Beatty, a Columbus Democrat. "We should be embracing it in a bipartisan fashion as we have done in the past."
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Davidson said he's confident the caucus can increase the debt limit and cut spending. "We're not going to default on our debt," he said.
And Jordan argues it would be irresponsible to raise the debt limit without addressing the overall problem.
"You have to control the overall spending relative to the size of the (gross domestic product) to begin to deal with a problem of this magnitude," he said.
If it doesn't happen: Congress fought an earlier version of this fight in 2011, just narrowly meeting the debt ceiling deadline. Still, Standard & Poor's downgraded the nation's credit rating. Even a near-miss could take a toll on the markets.
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If the government defaults, the Treasury Department will have to determine which bills to pay and which ones to delay. That means it would have to choose whether to pay bondholders, federal contractors, Social Security beneficiaries or even U.S. service members. Shai Akabas, director of economic policy at the Bipartisan Policy Center, said a default "would be unprecedented."
"The consequences could really have a ripple effect that impacts almost every American in their everyday lives," he said.
Why it matters: Congress has to pass a spending bill — or even an extension of the current one — or the government will shut down on Oct. 1. Although that wouldn't be unprecedented — it happened most recently in 2013 — it tends to be hugely unpopular with the public and potentially politically catastrophic for the party that runs Congress, in this case Republicans.
ExploreRELATED: Temporary extension avoided Spring shutdown
The hang-up: Well, there are always hang-ups when it comes to legislation to keep the government running. During an August rally in Phoenix, President Donald Trump threatened to shut down the government if it did not pay for the $1.6 billion border wall that he made a centerpiece of his 2016 campaign. "If we have to close down our government, we're building that wall," he said.
But Trump has since toned down his rhetoric on using the wall as leverage in talks over shutting down the government, and most people view a shutdown as politically disastrous with so many victims of Hurricane Harvey needing federal help.
Steve Ellis, vice president of the fiscal watchdog Taxpayers for Common Sense, said it's possible Congress could pass Harvey spending apart from the overall spending bill, keeping open the possibility of a showdown over the wall.
But Sen. Sherrod Brown, D-Ohio, said the wall shouldn't get in the way of helping people who have lost their homes, belongings and in some cases their family members.
"I don't want to spend billions on a border wall when we need to spend billions on Hurricane Harvey," Brown said.
If it doesn't happen: Using the most recent shutdown as a template, most non-emergency work for the government would stop. The government would furlough workers, close office buildings and public facilities and delay paperwork.
Why it matters: Even before it expires, the National Flood Insurance Program is already roughly $25 billion in the hole – and that's before the claims from Harvey kick in.
The hang-up: This program is historically fraught with controversy: Some argue that the government has no business providing flood insurance. It's also not a great insurance model: For the most part, the people who buy the insurance are the ones at high risk of having to use it.
"This isn't a partisan issue for the most part," said Ellis. "It's more about, 'are you a major user of the flood insurance program or are you a major benefactor of the flood insurance program?"
More than half of the flood insurance policies in the United States are held in three states: Texas, Florida and Louisiana, Ellis said. According to a 2016 poll by the Insurance Information Institute, only 12 percent of U.S. homeowners have a flood insurance policy. In the Midwest, only eight percent of homeowners do.
If it doesn't happen: If Congress doesn't renew the program by Sept. 30, the current policies will remain in place. But the federal government would not be able to issue new policies, and that could dramatically impact the real estate market. If would-be homeowners who need flood insurance can't get it, lenders won't loan them money to purchase the home.
The program has lapsed before: Before its last full reauthorization in 2012, Ellis said, the program was temporarily reauthorized more than a dozen times and even lapsed a few times. Each time, Congress ultimately extended it retroactively.
Why it matters: The Children's Health Insurance Program, which covers low-income children who don't qualify for Medicaid, covered 8.9 million children last year, including 223,583 Ohio children. The program is authorized through 2019, but the money for it expires at the end of September.
The hang-up: Even though the Senate failed to repeal Obamacare, the issue isn't going away, and some predict that this will be the latest battlefield for the fight over the 2010 health care law.
If it doesn't happen: If CHIP spending is exhausted, the federal matching rate for kids insured through the program will fall back to the regular matching rate, meaning Ohio will be on the hook to pay more in order to keep those children insured, according to a report by the Medicaid and CHIP Payment and Access Commission. Ohio would exhaust its funds by March 2018, the organization reports.
Why it matters: The last bill authorizing the FAA expired in 2015, but since then, Congress has passed a series of short term extensions of that bill. The FAA has known this threat before: In 2011, Congress went home without extending the bill authorizing the agency, putting an abrupt stop to a handful of airport construction projects and spurring a furlough of some 4,000 employees.
The hang-up: This year's House bill includes a provision that would privatize the nation's air traffic control system. The provision has divided the aviation industry, with larger airlines and air traffic control unions supporting the move and general aviation and business aviation opposed.
If it doesn't happen: The last time Congress missed a deadline to reauthorize the FAA, the FAA stopped collecting ticket taxes because it no longer had the authority to do so. Realizing what a hole that could put in the nation's revenue, Congress rushed back to town to pass the bill.
Dorothy Robyn, who served as a special assistant to the president on economic policy in the Clinton administration, predicts Congress will extend the current reauthorization, but may not have the votes to privatize air traffic control.
"There will be an extension," she said. "A continuing of the status quo."
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