'Cromnibus' deal reached

A $1.1-trillion budget deal was reached by House and Senate negotiators last night that will fund most of the federal government through September of next year.  The Department of Homeland Security was funded only through February 27, setting up a showdown on immigration in a GOP-controlled Congress.

Reuters:

As the funding deadline loomed, Republicans successfully negotiated a number of policy provisions into the measure, including easing of regulations ranging from the environment to financial derivatives trading.

The measure was expected to be put to a House of Representatives vote on Thursday. But to enable Senate passage, a short-term extension of one or two days was being prepared, congressional aides said.

"This bill will allow us to fulfill our constitutional duty to responsibly fund the federal government and avoid a shutdown," House Appropriations Committee Chairman Hal Rogers said in a statement.

The measure largely keeps unchanged fiscal 2015 domestic spending, while adding funds to fight Islamic State militants in Iraq and Syria and to fight Ebola in West Africa.

It funds all government agencies through September 2015, except for the Department of Homeland Security, which would be extended only through Feb. 27. That move aims to give Republicans leverage over the agency implementing Obama's immigration order.

Next year, when Republicans control both the House and Senate, they intend to pass restrictions barring federal funds for Obama's plan to let millions of undocumented immigrants stay and work in the United States.

Current government spending authority expires at 12:01 a.m. EST on Friday.

Negotiations were delayed by wrangling over a Republican effort to block new curbs on derivatives trade that would require banks to shift these activities to units that do not benefit from federal deposit insurance and Federal Reserve loans.

The compromise that ended up in the bill grants a reprieve for derivatives trades on behalf of farmers and other commodity producers, who had feared the rule would require them to put up more collateral.

A bipartisan provision to shore up distressed multi-employer pension plans and the government fund that guarantees them was taken out of the bill and proposed as an amendment facing a separate vote. Changes include raising insurance premiums for these plans and allowing them to cut benefits for non-disabled beneficiaries under 75.

These continuing resolutions do nothing to cut the budget or bring spending under control because they never deal with entitlement issues.  Medicare is on life support, and Social Security isn't far behind.  If Republicans want to prove to the American voter that they can govern, they will act courageously and seek reform of entitlements in the next two years.

But whom am I kidding?  Politicians, by nature, are not courageous, and reforming entitlements will set off a political firestorm.  Only in the last extreme will anything be done about entitlements, and by then it will be hugely expensive to fix, not to mention the reforms causing enormous pain to people receiving them.

So Congress will continue patching together these short-term funding bills that only grow the size of government and put us deeper in debt.  Until we see real leadership from the White House and Capitol Hill, that will be America's fate for the foreseeable future.

A $1.1-trillion budget deal was reached by House and Senate negotiators last night that will fund most of the federal government through September of next year.  The Department of Homeland Security was funded only through February 27, setting up a showdown on immigration in a GOP-controlled Congress.

Reuters:

As the funding deadline loomed, Republicans successfully negotiated a number of policy provisions into the measure, including easing of regulations ranging from the environment to financial derivatives trading.

The measure was expected to be put to a House of Representatives vote on Thursday. But to enable Senate passage, a short-term extension of one or two days was being prepared, congressional aides said.

"This bill will allow us to fulfill our constitutional duty to responsibly fund the federal government and avoid a shutdown," House Appropriations Committee Chairman Hal Rogers said in a statement.

The measure largely keeps unchanged fiscal 2015 domestic spending, while adding funds to fight Islamic State militants in Iraq and Syria and to fight Ebola in West Africa.

It funds all government agencies through September 2015, except for the Department of Homeland Security, which would be extended only through Feb. 27. That move aims to give Republicans leverage over the agency implementing Obama's immigration order.

Next year, when Republicans control both the House and Senate, they intend to pass restrictions barring federal funds for Obama's plan to let millions of undocumented immigrants stay and work in the United States.

Current government spending authority expires at 12:01 a.m. EST on Friday.

Negotiations were delayed by wrangling over a Republican effort to block new curbs on derivatives trade that would require banks to shift these activities to units that do not benefit from federal deposit insurance and Federal Reserve loans.

The compromise that ended up in the bill grants a reprieve for derivatives trades on behalf of farmers and other commodity producers, who had feared the rule would require them to put up more collateral.

A bipartisan provision to shore up distressed multi-employer pension plans and the government fund that guarantees them was taken out of the bill and proposed as an amendment facing a separate vote. Changes include raising insurance premiums for these plans and allowing them to cut benefits for non-disabled beneficiaries under 75.

These continuing resolutions do nothing to cut the budget or bring spending under control because they never deal with entitlement issues.  Medicare is on life support, and Social Security isn't far behind.  If Republicans want to prove to the American voter that they can govern, they will act courageously and seek reform of entitlements in the next two years.

But whom am I kidding?  Politicians, by nature, are not courageous, and reforming entitlements will set off a political firestorm.  Only in the last extreme will anything be done about entitlements, and by then it will be hugely expensive to fix, not to mention the reforms causing enormous pain to people receiving them.

So Congress will continue patching together these short-term funding bills that only grow the size of government and put us deeper in debt.  Until we see real leadership from the White House and Capitol Hill, that will be America's fate for the foreseeable future.