CONGRESSIONAL LEADERS POISED TO END SHUTDOWN, AVOID DEFAULT
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With the Oct. 17 deadline for raising the nation’s debt ceiling now only hours away, Senate party leaders appear to be putting the finishing touches on a deal to end the government shutdown and avoid default. The federal government has been in a partial shutdown since Oct. 1, when the president and congressional leaders failed to reach an agreement on a continuing resolution. Senate Majority Leader Harry Reid (D-Nev.) and Republican Leader Mitch McConnell (Ky.) were close to a deal on Columbus Day, but then had to scrap negotiations when House Republicans caught wind of the particulars and began drafting their own proposal. When that proposal fell apart in yet another intraparty meltdown the following day, Reid and McConnell resumed talks.
The tentative agreement would extend the debt limit through Feb. 7 and include a continuing resolution to fund the federal government until Jan. 15. The deal would also call for a budget conference report by the two houses by Dec. 15, and an antifraud provision verifying income for those who receive subsidies under the new health care law. The Senate could expedite the votes in order to avoid the Oct. 17 deadline, but that would require the consent of all 100 senators to proceed. No easy task. And while conservatives in the House are clearly not happy with the proposal, House Speaker John Boehner (R-Ohio) may not have a choice but to bring to the floor whatever passes the Senate.
Unfortunately, as the rest of the nation waits for the shutdown to be resolved, economic uncertainty abounds. Because Federal Highway Administration employees and the federal highway program are supported by the Highway Trust Fund, and not the general fund, all federal-aid highway and bridge projects should continue without interruption. However, a debt ceiling default would tighten credit markets and likely worsen lending terms for the transportation construction industry, making the launch of new projects even more difficult.
NSSGA has weighed in with the business community urging action on the debt ceiling and continued government funding. See the attached letter
sent to members of the U.S. Congress.