Congress Expected to Pass Six-Month Continuing Resolution

With the end of the current fiscal year (FY) approaching on September 30, Congress is expected to vote when it returns in two weeks on a Continuing Resolution (CR) that would fund the government at current FY ’12 levels for six months.

Neither Republicans nor Democrats want to get bogged down in the political gamesmanship that usually accompanies a budget deadline this close to the elections. Congressional leaders already agreed in principle on the outlines of the budget deal before leaving for the August recess.

However, looming over the FY 13 budget process is the “sequester” mechanism that was put in place by the budget deal last year. If Congress has not agreed on a budget by January 2, 2013, it will trigger an estimated $109 billion in across-the-board spending cuts. While the details of how the sequester would be implemented have yet to be determined, estimates are that it would result in cuts of up to 10 percent in federal agency budgets.

While the CR delays the difficult decisions on the budget until after the election, it would create a situation where a lame-duck Congress, and potentially a lame-duck president, will have to arrive at a compromise and avert the draconian cuts that would result from the sequester.