House, Senate reach short-term funding agreement as debt limit looms

A continuing resolution to fund the federal government through mid-February should stave off the imminent risk of a government shutdown, though with a looming Congressional battle over the U.S. debt limit, cities need federal budget clarity for the new year.

Early Thursday, House Appropriations Committee Chair Rosa DeLauro, D-Conn., introduced the Further Extending Government Funding Act, to fund the federal government through Feb. 18. DeLauro indicated that the House could take up the stopgap funding measure almost immediately.

In a release, DeLauro said that the funding bill, which includes $7 billion to support Afghanistan evacuees, contains “”only minimal changes” to current funding and policy.

“This agreement allows the appropriations process to move forward toward a final funding agreement which addresses the needs of the American people,” DeLauro said in a statement.

Vice-chair of the Senate appropriations committee Sen. Richard Shelby, R-Ala., expressed support for the agreement in a statement. “I’m pleased that we have finally reached an agreement on the continuing resolution. Now we must get serious about completing [fiscal year 2022] bills.” Shelby said.

If passed, the continuing resolution will give Congress about 12 weeks to iron out party differences on trillions of dollars of discretionary spending. Both DeLauro and Shelby have expressed the need for an omnibus spending bill.

“Instead of short-term funding patches like this, working families, small businesses, veterans, and our military need the certainty that comes with passing an omnibus,” DeLauro said.

Shelby said that he looks forward to “maintaining legacy riders, eliminating poison pills, and getting serious about the funding we are going to provide for our nation’s defense. If that doesn’t happen, we’ll be having this same conversation in February,” he added.

Uncertainty surrounding the potential for a government shutdown always has wide-ranging impacts, but those impacts are currently heightened for some cities and localities.

“City leaders depend on Congress to meet their most basic obligations to maintain government operations and services without interruption,” said Mike Wallace, legislative director for housing, community, and economic development at the National League of Cities.

“Even partial interruptions result in unanticipated harmful impacts on programs that grow local economies, offer relief to residents in distress, and support the missions of local public servants,” Wallace added.

Wallace pointed out that an interruption in federal funding of just a week or less would create uncertainty for local leaders who are currently increasing interactions with federal agencies to administer economic relief and programs like the State and Local Fiscal Relief Fund and the recently passed bipartisan infrastructure Act.

Although that would not necessarily impact city budgets, Wallace said that “cutting off city’s contacts with federal agencies for even a short time would result in expenditure and compliance delays at the local level [and drag] out federally-supported efforts to overcome COVID-19 related harm to public health and the economy.”

Thankfully most Democrats and Republicans appear to agree that passing the continuing budget resolution is a necessary first step to shore up federal funding. But Congress has a lot on its plate and not much time to waste.

Treasury Secretary Janet Yellen has warned lawmakers that the U.S. could reach its $28.9 trillion borrowing limit as early as Dec. 15. “The full faith and credit of the United States should not be put at risk,” Yellen said in a letter.

To continue funding the government, both the House and Senate need to pass the continuing resolution and President Biden needs to sign the bill by Friday before the Friday midnight deadline.

Then almost immediately, and before their scheduled holiday recess, lawmakers will need to reach a bipartisan agreement to avoid a U.S. government default.