US House Passes $1.1-T Spending Bill

Posted by: : Paul EbelingPosted on: December 12, 2014 US House Passes $1.1-T Spending Bill

US House Passes $1.1-T Spending Bill

Swapping crisis for compromise, the House narrowly approved $1.1-T in government-wide spending Thursday night after US President Barack Hussein Obama and Republicans joined forces to override Democrats’ complaints that the bill would also ease bank regulations imposed after the economy’s near-collapse in Y 2008.

The 219-206 vote cleared the way for a final showdown in the Senate on the bill, the last major measure of a 2 yr Congress far better known for gridlock than for bi-partisan achievement.

Hours before the vote, House Democrat leader Nancy Pelosi delivered a rare public rebuke to Mr. Obama, saying she was “enormously disappointed” he had decided to embrace legislation that she described as an attempt at blackmail by Republicans.

The White House stated its own objections to the bank-related proposal and other portions of the bill in a written statement. Even so, officials said Obama and Vice President Joe Biden both telephoned Democrats to secure the votes needed for passage, and the president stepped away from a White House Christmas party reception line to make last-minute calls.

In addition to the government funding, the bill also sets a new course for selected, highly shaky pension plans.

Despite the day’s drama, 57 Democrats supported the bill, including two of the top 3 party leaders and Rep. Debbie Wasserman Schultz (D-FL), who doubles as the chair of the Democratic National Committee.

The outbreak of Democratic bickering left Republicans in the unusual position of bystanders rather than participants with the federal government due to run out of funds at midnight.

Even so, there was no threat of a shutdown in federal services — and no sign of the brinkmanship that marked other, similar episodes. Instead, the House passed a measure providing a 48-hour extension in existing funding to give the Senate time to act on the larger bill.

Said a relieved Speaker John Boehner (R-OH), “thank you and Merry Christmas.”

Hours before the mid-evening final vote, conservatives had sought to torpedo the measure because it would leave Mr. Obama’s immigration policy unchallenged. Boehner patrolled the noisy, crowded House floor looking for enough GOP converts to keep it afloat.

He found them, after the vote to move ahead on the bill went into overtime in retiring Rep. Kerry Bentivolio of Michigan as well as Rep. Marlin Stutzman of Indiana. The vote was 214-212.

Even so, Republican defections required Mr. Boehner and supporters of the measure to seek Democratic votes for passage. “Remember this bill was put together in a bi-cameral, bi-partisan way,” he said. Officials in both parties said Ms. Pelosi was fully informed of the bill’s contents before it was released to the public, and did not signal her opposition.

If there was political drama in the House, there was something approaching tenderness in the Senate, where several lawmakers are ending their careers. Sen. Tom Coburn, (R-OK), choked up as he delivered a farewell speech from his desk, and Republicans and Democrats alike rose to applaud him when he finished speaking.

The spending measure was one of a handful on the year-end agenda, with the others ranging from an extension of expiring tax breaks to a bill approving Mr. Obama’s policy for arming Syrian forces fighting ISIS forces.

The $1.1-T legislation would provide funding for nearly the entire government through the end of the budget year next 30 September, and lock in cuts negotiated in recent years between the White House and the Republican rank and file.

The only exception is the Department of Homeland Security. It is funded only through 27 February, when the specter of a shutdown will be absent and Republicans hope to force the president to roll back an immigration policy that promises work visas to an estimated 5-M immigrants living in the country illegally.

When Congress convenes in January, Republicans will have control of the Senate for the 1st time in 8 yrs and will hold their strongest majority in the House in more than 80 yrs.

A provision in the big bill relating to financially failing multi-employer pension plans would allow cuts for current retirees, and supporters said it was part of an effort to prevent a slow-motion collapse of a system that provides retirement income to millions.

The Pension Benefit Guaranty Corp. estimates that the fund that backs multi-employer plans is about $42.4-B short of the money needed to cover benefits for plans that have failed or will fail.

The legislation drew a mixed reaction from unions and the opposition of the AARP, but the White House written statement on the legislation did not mention it as a concern.

The White House did raise objections to a provision that would roll back one of the regulations imposed on the financial industry after the economic near-collapse of 2008, and to a separate element of the bill that would permit wealthy contributors to increase the size of their donations to political parties for national conventions, election recounts or the construction of a headquarters building.

Democrats cited the same issues, but Boehner on Wednesday rejected their request to jettison either or both of the provisions. Republicans noted that 70 members of the Democratic rank and file supported easing the bank regulations on a stand-alone vote in October of last year.

Remarkably, there was relatively little controversy about the spending levels themselves that form the heart of the bill.

Stay tuned…

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Paul Ebeling

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.
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