What’s Happening with the Federal Budget and Debt Ceiling?

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This piece first appeared on National Priorities’ blog.

After final vote were cast, members of Congress walk down the steps of the House of Representatives as they leave for a five-week recess, at the Capitol in Washington, Friday, Aug. 2, 2013. With few accomplishments in the divided 113th Congress, the next big battle is over the budget, the nation's debt limit and the possibility of at least a partial government shutdown. (AP Photo/J. Scott Applewhite)

You’ve heard whispers. Perhaps here and there in the news there’s been mention, yet again, of the potential for a government shutdown. So here’s the update you need – in handy cheat-sheet format – of what’s happening with the federal budget.

Patching Together a Federal Budget

Right around now lawmakers are supposed to finish their work on appropriations bills to fund the federal government – everything from environmental protection to higher education to the military – for the start of fiscal year 2014 on Oct. 1, 2013. But Congress hasn’t made much progress on that. In part that’s because lawmakers failed their responsibility of agreeing on a budget resolution – a blueprint for the overall budget – which would have ensured that the House and Senate were using the same set of numbers to write appropriations bills. Instead, the two chambers passed wildly different budget resolutions back in March (we have all the details here). Since then, the House has succeeded at passing four of the necessary 12 appropriations bills, while the Senate has passed zero.

If There’s No Budget

It’s overwhelmingly likely that when Oct. 1 rolls around lawmakers will, once again, fail their responsibility to pass a budget for this country and instead pass a temporary spending bill known as a Continuing Resolution (CR) to fund the government in the new fiscal year. If they fail even to pass a CR, the government will shut down – though so-called essential services would continue, meaning the government would continue to conduct food safety inspections and send Social Security checks.

If you think that’s bad, it gets worse.

The Debt Ceiling

Looming sometime after Labor Day is the promise of the federal government hitting the debt ceiling, which is the limit Congress places on its own borrowing. We’ve spent a lot of time here talking about the debt ceiling and how failing to raise the ceiling is akin to ordering a big meal at a fancy restaurant and then skipping out on the check. In other words, the time to negotiate over how much to spend is during the budget process, not when the bill comes due. Nevertheless, it looks like the debt ceiling will once again be a highly politicized event. According to The New York Times, Republicans in Congress have said they won’t raise the ceiling unless President Obama agrees to some combination of tax reform and changes to programs like Social Security and Medicare.

If Congress Fails to Raise the Debt Ceiling

A stalemate over the debt ceiling could lead to a government shutdown when the Treasury runs out of authority to borrow money – and, in that case, essential services would not necessarily continue. Social Security checks could stop. The federal government would default on its debt payments. And that could lead to problems throughout the global economy, including higher interest rates for you and me.

So, that’s the lay of the land with Congress now off for its five-week August vacation.

Got Something to Say?

Leave your thoughts on the National Priorities’ Facebook page. And use our legislator meeting fact sheets – please – to make your voice heard in Washington.


Mattea Kramer is a senior research analyst at the National Priorities Project. She is lead author of the new book A People’s Guide to the Federal Budget.
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  • Anonymous

    Social Security has Zero to do with the budget! Keep shooting themselves in the foot! That’s the spirit of Republicanism!

  • margo

    Have yourself a merry vacation, guys. I’ll be working at my two jobs…every day.

  • Anonymous

    No, the spirit of the republicans is to take from those who can not fight back, children, the elderly, the sick, then take it all for themselves.

  • Robin Suzanne

    The United States of Exxon/Koch/Monsanto SUCKS! America is being held hostage by the large corporations.

  • Michele Heidt

    Pathetic — If I was a member of the House or the Senate I would hide my face in Shame — have anxiety attacks/get shingles/colon cancer and any tummy upset to make my life MISERABLE. They know what they are doing…they know this country is in big trouble — they drank the Kool-Aid and now think that the lies they have been told/and the lies they tell themselves are the TRUTH — sad, but true. We really need to IMPEACH all of them from the top down/clean house/set up a REAL way of SERVICE to this Country — not a way to sit back and earn the Big Bucks for partying with our friends in ‘high places’ with lots of $$ to give us/as long as we give them what THEY want!!

  • Shannon Mahoney

    OK…so I’m not a lawyer and I’m not a politician, I have not studied in school about these things…so forgive me if I’m off base here….but…surly these politicians are breaking the law. Seriously, I keep seeing all of these policies and such and wonder how these things can even be legal? Also I wonder why we do not have laws in place about being untruthful to the public when you hold a position of public office! Or of public service such as reporting the news. I value the idea of free speech for many reasons, like I can come on here and state my opinion and no one can drag me away to prison, however, as I watch what is happening in our country i question that Freedom of Speech should be carried over into deception via speech. At any rate, what is happening within our Government right now is the result of the constant abuse of misinformation over the years. Now we have complete area’s and millions of people that actually believe things like the IRS was targeting Republicans, and that our President was born in another Country!! I just look at how some of the States in this fine Country are passing laws that are blatantly discriminatory and that it isn’t against the law. Personally I have been feeling incredibly helpless to do anything about it. I vote and consiquentely we happen to have a pretty decent representation in Washington, and certainly for our State….but I am helplessly witnessing the horrors that are happening in Republican States, and it’s effect on the Country as a whole in Washington…that those people that are so willing to let their children die of starvation and no medical, that are willing to let them become uneducated to any type of standard, that are willing to put women’s health out to pasture and continue to repress minorities in return they get power and money. The problem is that currently they have hold of our government and are effecting the rest of us…the majority of us in a really really frightening manner. You know I’m beginning to wonder if those people in those States are somehow cut off from the rest of us…that maybe they actually are not getting the proper information…? I don’t know…but it’s frustrating…and scary.

  • Anonymous

    T he bloody bastards responsible for not thinking about their country should be docked pay for every day they failed to do their job, lose their retirement set-asides for that period of time, lose their tax paid health insurance for that same amount of time as well. NO ONE ELSE who really works in this country among the middle or low income households that will be the most affected by their inaction, would even be kept on their jobs, much less still receive such ripe benefits if they performed so poorly ! And when it’s time to vote again, we should ALL remember this.

  • Anonymous

    Good point!

  • Karen Shear

    You are so right , It makes no sense . The country is divided almost in half and nothing is getting done for the country . The poison and hatred fills the media with it every day , The Right has been so full of hatred since President Obama was elected and that hatred is even worse since his reelection . If you tell them he won the election they will say he stole it . It is insane that one political party is determined to hold the whole country hostage . We know that there are people who take advantage of most government programs , but most Americans that rely them are either sick or retired or wanting jobs that are not there . In the past ,even Republican Presidents have raised taxes on the wealthy when it was needed, even their beloved Reagan . To balance the budget on the backs of those that have nothing to live on, ,or shut the government down and hurt the country even worse is pure Insanity . This isn’t Politics it is Politicians that have been bought and paid for to protect big tax free profits .

  • curmudgin

    Thanks “Citizens United” & the Koch Brothers, & the Pecos Pipsqueak, and the “Gipper” and the Palm Beach “Mouth That Roars” and Rupert Murdoch’s Fixed Noise and Carl Rove and Sean Hannity and TeapubliKlans and Robert’s “Gang of Five” and, well you get the idea! Plutocracy is NOW!

  • Lynda Swanson

    And once again, Obama will be blamed for the entire thing. It amazes me every time.

  • Anonymous

    With the House only working 9 days in September and a looming October 1 deadline we have no hope of anything getting done…..

  • T Marq

    Neither the Budget nor the Debt Ceiling are the issues, both can be corrected by just getting the Senate and House under the Dems Hand. The issues are pretty simple, eliminate all those crooked loopholes embedded into laws over the years by the GOP. They want to protect MONEYS not PEOPLE. Seems to me they have their priorities in disorder.

  • Whitty66

    The citizens of this country who pay taxes should initiate a class action lawsuit against Congress for the income tax they paid to the Federal Government over the past 5 years. I did not pay taxes to have these clowns not pay the bills and shut down the government. The taxpayers are getting ZERO return on their investment.

  • IAMROSE

    Slavery is back in their crooked little lives…How sad.

  • mvd

    Shannon, you should run for office! I am also horrified that citizens (even the 1%) and stand by and watch the most vulnerable citizenry get stamped into the ground. Do we need to have our sick and disenfranchised citizens laying in the street before they are noticed?
    Wall Street bankers looked down on the Occupy Wall Street activists and laughed. This is a very sad time in our history.

  • oldindependent

    I think all salaries to members of Congress should be suspended pending accomplishment of work they were hired to do.

  • https://me.yahoo.com/a/mwx8R890nIRK21RU0fuylYYAtT4ItlY-#e145f max

    Heck with docking their pay. We need to seize their assets. Many congress critters have accumulated more wealth than can be calculated by their salaries minus living expenses due to the bribes; oops contributions, they have received from the oligarchs who give them their marching order.
    End campaign contributions over a hundred dollars and we will end the continual posturing for votes and the corruption of those who do manage to get elected.

  • https://me.yahoo.com/a/mwx8R890nIRK21RU0fuylYYAtT4ItlY-#e145f max

    No need to impeach. We have the ability to vote them out of office. We have met the enemy and it is us. Anyone who votes for an incumbent that has contributed to this oligarchy is complicit in the failure of our republic.

  • foxhole

    bring it on, seems like it will be the only way to properly “clean house”

  • Anonymous

    I donate to and communicate with Senators & Representatives regardless of state because how they vote matters to everyone. Yes – I think our Senators are great; my representative Doc Hastings is right of right and votes however the tea party tells him. Oh well – 2 out of 3 isn’t so bad.

  • Anonymous

    The tea party & other pseudo libertarian jerks are not republicans. Lincoln, TR, Eisenhauer, Nixon, Goldwater, Ford even Bush41 wete republicans. These real republicans would not know the current bunch – Goldwater & TR would denounce them in unambiguous language.

    What we can do is invest time & treasure to ensure that every legal voter has the ID needed & a ride to the polling place.

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  • Justin King

    The internal chaos within the Republican Party will cause brinksmanship that has never been seen before.

  • Anonymous

    He should be on both the Senate & Congress everyday to get this done. If he stays on the sideline & watches like a manager then yes, he’ll get lumped in as part of the problem. He has a bad habit of sometimes not getting in front of a situation & instead reacting after the fact.

  • Lynda Swanson

    Have to say that’s true.

  • Lynda Swanson

    I seriously think that we’re getting there. As soon as we grow a spine and demand better treatment watch out.

  • Lynda Swanson

    I really don’t understand all this impeachment talk. Who do you think will take over? And when you don’t like them, then who takes over and so on and so on. I wonder who those that want to impeach actually wants in office. Speak of the House perhaps? Nah.

  • Lynda Swanson

    MVD & Sharon, You are so right on. Where is the Occupy movement today? Not on the steps of congress where they should be. Where we all should be unless we are strapped to our desks trying to keep our head’s above water. A person has to pay the bills. Hmmmm, maybe that’s why they feel so comfortable up there, they know that’s exactly what most of us are doing.

  • Travis Rupe

    I am curious to know if the 14th amendment could be legally exercised if Congress fails in it’s duty, relegating debt payment authority to the executive branch? I think the constitutional implications of allowing the deadline to pass and using executive powers to make the payments ~ as ordered by the laws of Congress, and the constitution, would be an interesting thing.

  • Pete Joachim

    So Congress gets some European socialism with their 5 weeks paid vacation, but we would be shot on the spot if we asked for 50% of all our taxes be directed towards health care and education for everyone. What hutzpah!

  • fenton

    I agree 100 per cent

  • Robin

    As Chris Hedges has said, it is a “corporate coup d’état”. We are still asleep to what is going on. Just saw the film,” What a Democracy Looks Like” about the protest in Seattle in 1999. That is what should be going on now.

  • Anonymous

    That worked in California. No (balanced) budget, no legislative pay.

  • Anon 3rd Party Member

    We have nobody to blame but ourselves. There was just a major election last year-and despite the fact that there were over 25 presidential candidates to choose from -most people voted Obama or Romney. If we owned a company and the people who ran it were messing it up -most of us would fire those people and find some people who had different ideas. But we REFUSE to do that with our country. People say it’s throwing away your vote -but things will never change unless we make them change. We
    One third party candidate did actually get over 1.2 million votes. Maybe if the government shuts down and chaos breaks out -next time might be different-but I doubt it. We could fix the government -but we have to get rid of the people that ~work~ there and get some new people. Nobody wants to actually try it-but everyone wants to complain about the problems the people in office are creating.

  • Anon 3rd Party Member

    Actually here in California our budget is NOT balanced. HOW can you have a balanced budget when you have entire departments that are COMPLETELY bankrupt (like EDD) and run completely on Federal funding & have been for YEARS?? Something is really wrong with that. I’m curious to know what will happen to those services in California if the Feds do shut down….

  • Michael McClain

    You might check out the Million Mask March…November 5th on DC. There are elements I’m unsure of, but it looks like it will be big, AND met by much force. I’m tired of bitching about our goverment corruption on FaceBook, so I will be there.

  • neuromancer

    Correct me if I’m wrong, but raising the debt ceiling with such a deep national/international debt in the trillions sounds really stupid. Why not cease the activity of funding foreign governments, or have indepth inquests into the billions lost through gov./corporate transactions? This article really makes raising the debt ceiling sound like an intelligent action. It likens it unto wise fiscal preparations before eating at a fancy restaurant, when infact it’s more like spending beyond your means, calling your credit card company to raise your credit limit (which you already can’t pay back) so you can irresponsibly eat at an expensive restaurant, then later raise your credit limit and build more debt because you can’t pay the debt you already have (?)