Shutdown Averted, Debate Resumes

April 15, 2011 Updated: October 1, 2015

House Minority Leader Rep. Nancy Pelosi (D-CA) speaks during a news conference on Apr. 15 on Capitol Hill in Washington, D.C. House Democrats were calling on Republicans not to end Medicare.  (Alex Wong/Getty Images)
House Minority Leader Rep. Nancy Pelosi (D-CA) speaks during a news conference on Apr. 15 on Capitol Hill in Washington, D.C. House Democrats were calling on Republicans not to end Medicare. (Alex Wong/Getty Images)
The House voted to pass the 2011 budget on April 14, averting a shutdown for now.

Their agreement will last until the end of the fiscal year, September 30, when the wrangling could ramp up again. Legislators are trying to reconcile ideas about what the 2012 budget should be, and about how to reduce the national debt. They will need to decide about raising the $14.3 trillion debt ceiling in the near future.

The two parties have serious disagreements. Essentially, for Republicans, cutting spending is the highest priority. Democrats propose maintaining government services by cutting spending and raising taxes. During the Bush administration the tax rates for those with the highest incomes were cut, and those cuts continue. President Barack Obama declared he would not compromise by extending those cuts again.

A bipartisan deficit reduction commission, nicknamed “the Gang of Six,” is working on recommendations about how to reduce the deficit.

The House of Representatives passed the Republican Paul Ryan’s 2012 budget proposal on April 15. House Minority Leader Nancy Pelosi (D-CA) called it a “wrong choice,” C-Span reported. She said the budget gave tax breaks to oil companies and the richest individuals, and shifted costs to seniors.

The Senate, which is controlled by Democrats, is unlikely to pass the proposal.

The total 2011 budget package is $1.049 trillion, which is $78.5 billion less than Obama had requested. The Federal spending cut affecting the year 2011 will be $38.5 billion.

Key decisions in the 2011 compromise include dropping the hated 1099 reporting requirement, a part of health care reform. It mandated that businesses file a 1099 Form with the IRS for every purchase of goods and services over $600 per year. The president signed a repeal of the requirement on April 14.

Funding for government transparency was also reduced.