Deficit negotiations between President Barack Obama, Senate Minority Leader Mitch McConnell (R-KY) and House Speaker John Boehner (R-OH) continued through Sunday, July 10. As of July 10, no agreement on whether revenue will be included in a deficit reduction deal or a total amount for spending cuts had been brokered. The President said that he will meet with Congressional leaders every day this week. House and Senate leaders and the President have agreed to work towards an agreement by the end of the week of July 11 in order to leave enough time for Congress to legislate the deal prior to the Administration’s August 2 deadline to raise the debt ceiling (see Memo, 7/1).
The President took over the negotiations originally led by Vice President Joseph Biden when an impasse was reached over including revenue as part of a deficit reduction package (see Memo, 7/1).
The country is nearing the August 2deadline for raising the debt ceiling to avoid the U.S. defaulting on its debts. Lawmakers and the Administration have been working towards an agreement to avoid a short-term solution to raising the debt ceiling, a step that many feel would undermine confidence in U.S. economic stability and unnecessarily prolong arrival at a sustainable solution to the nation’s debt and deficit challenges.
Meanwhile the House is proceeding with a balanced budget amendment proposal. In June, the House Committee on the Judiciary marked up H.J. Res. 1, which would amend the constitution to require that the federal government balance its budget annually and cap spending at 20% of gross domestic product. The House is now expected to debate H.J. Res.1 on the floor the week of July 18. The House was originally expected to be in recess during that week (see Memo, 6/17).
The Senate Judiciary Subcommittee on the Constitution, Civil Rights and Human Rights has not yet taken up a similar resolution, S.J. Res. 10.
Both the deficit reduction agreement and a balanced budget amendment would establish the parameters for FY12 spending. However, the House is proceeding with development of its FY12 appropriations bills. The House Committee on Appropriations Subcommittee on Transportation, Housing and Urban Development and Related Agencies (T-HUD) is scheduled to mark up its FY12 T-HUD bill on July 14. The Committee on Appropriations is scheduled to mark up the bill on July 26.
The Senate Committee on the Budget has not yet marked up an FY12 budget resolution (see Memo, 6/17). The Committee met the week of July 5 to discuss a framework for the resolution but details of this agreement have not been released. It is not clear whether the Committee will proceed with marking up a resolution or if it will wait until after the deficit negotiations are complete to make that decision.