Shutdown averted but 'fiscal cliff' awaits

WASHINGTON (AP) — Congress is moving to quash the threat of a government shutdown, but the prospect of a one-two punch of tax increases and slashing, automatic spending cuts will still confront lawmakers when they return to Washington after Election Day.

The House on Thursday passed a six-month stopgap spending bill to keep federal agencies running past the end of the budget year, the elections and into the spring. It effectively scratched a major item off of Congress' to-do list heading into a potentially brutal postelection, lame duck session.

The bipartisan 329-91 House vote for the measure sent it to the Senate, which is expected to clear it next week for President Barack Obama's signature, capping a year of futility and gridlock on the budget despite a hard-fought spending and deficit-reduction deal last summer.

The short-term spending measure funds the day-to-day operating budgets of Cabinet agencies that are financed annually by Congress through 12 appropriations bills. It would fund the government through March 27 and relieve lawmakers of the burden of trying to pass a catchall omnibus spending measure in November after the election.

While taking the possibility of a government shutdown out of the equation, the so-called fiscal cliff — a combination of automatic spending cuts and tax hikes set to slam the economy in January — still hangs over Congress and President Barack Obama.

More than $100 billion in cuts to defense and domestic programs alike loom as punishment for the failure of last year's deficit-reduction supercommittee to strike a follow-up bargain to last summer's debt and budget pact between the lawmakers and the president. The automatic cuts are set to hit at the same time that the Bush-era tax cuts, which were extended two years ago, are set to expire again.

Passage of the stopgap spending measure is likely to be Congress' last major act before lawmakers go home to campaign for re-election. Wrestling with how to avert the fiscal cliff is sure to dominate the lame duck session in November.

The temporary spending bill is needed to avert a government shutdown when the current budget year expires Sept. 30.

Thursday's vote represented a retreat by tea party Republicans since the stopgap measure permits spending at a pace that's $19 billion above the stringent budget plan authored by Rep. Paul Ryan, R-Wis., his party's vice presidential nominee.

Instead, the measure permits spending at the higher budget "caps" permitted under last summer's deal. Typically, short-term spending bills freeze agency budgets at existing levels, but Thursday's measure actually would permit an across-the-board 0.6 percent increase, in keeping with the budget accord. It also maintains spending on domestic programs rather than shifting $8 billion from domestic programs to the Pentagon.

Ryan, who is chairman of the House Budget Committee, returned to the Capitol from the campaign trail to vote for the half-year measure, even though it spends billions of dollars more than his budget plan, which has helped define the tight race for the White House.

It is routine for Congress to require one or more temporary spending measures, known as continuing resolutions, because Congress invariably misses the deadline for completing the annual appropriations bills.

But this year the appropriations process has collapsed completely. While the House has managed to pass seven of the 12 spending bills, the Democratic-controlled Senate hasn't passed a single one, despite optimism earlier this year that last year's budget deal could help get the appropriations process back on track.

Democrats say the decision by House GOP leaders to abandon the budget agreement is to blame because it set up a fundamental mismatch between the spending bills produced by the House and Senate Appropriations committees.

"This appropriations process was destined to fail from the start as Republicans chose to ignore the budget (deal's) statutory spending caps in favor of the unworkable caps in the Ryan budget," Rep. David Price, D-N.C., said.

Still, it was remarkable that the Senate didn't take up any appropriations bill. Republicans said Senate Majority Leader Harry Reid, D-Nev., was too busy teeing up votes to send political messages — while protecting vulnerable Democrats from difficult votes in relation to spending bills.

The House-passed measure would replenish disaster aid coffers, finance the food stamp program after it lapses on Sept. 30 and reauthorize for six months federal grants to states to run their welfare programs.

Just a handful of high-priority programs would be awarded larger increases, including an initiative to protect government computers from cyberattacks, wildfire suppression efforts, a drive to modernize the U.S. nuclear arsenal and processing of veteran disability claims. A popular initiative to repair the dome of the Capitol was left unfunded, despite a high-profile push by Senate Democrats.