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FACTBOX-A year of lows for U.S. Congress

Source: Thomson Reuters Foundation - Fri, 23 Dec 2011 00:03 GMT
Author: Reuters
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(Reuters) - A tough year for the U.S. Congress is drawing to a close after Democrats and Republicans agreed to temporarily extend a payroll tax break following a bruising fight and as the two parties try to position themselves for next year's elections.

Here is a recap of some of the battles that helped reduce U.S. public approval of Congress to new lows around 10 percent.

APRIL SPENDING BILL

This was the first pitched battle over spending and taxes after Republicans won control of the House of Representatives in November 2010. Tea Party conservatives, now major players in Republican politics, demanded big spending cuts and a commitment to smaller government by party leaders.

Democrats resisted deep cuts to education and other government programs they said were needed to help people struggling in a sluggish economy. The two sides were also embroiled in disputes over social issues like abortion rights.

The squabbling nearly halted government operations in April for the first time since a 21-day shutdown between Dec. 15, 1995 and Jan. 6, 1996. A deal cutting spending by ${esc.dollar}38 billion was struck at the last possible minute to avert the crisis.

DEBT CEILING FIGHT

Tensions boiled over during the summer over increasing the U.S. credit limit to allow the federal government to continue to pay its bills. U.S. creditworthiness was being questioned by investors, including China, the top international investor in U.S. Treasuries.

President Barack Obama and congressional leaders tried to come up with a deal that would satisfy Tea Party demands for more spending cuts and Democratic desires to raise taxes on the wealthy to reduce deficits. Nothing seemed to work and global financial markets grew increasingly nervous.

In the end, congressional leaders struck a face-saving agreement that allowed Obama to raise the debt ceiling. It included ${esc.dollar}917 billion in spending cuts over 10 years and a promise of an additional ${esc.dollar}1.2 trillion. The deal was signed into law in early August.

The vitriolic debate leading up to the agreement fueled public disgust with Congress and prompted Standard & Poor's credit rating agency to strip the United States of its stellar AAA rating.

FEDERAL AVIATION ADMINISTRATION SHUTDOWN

A dispute over labor rights and subsidies for small community air service triggered a partial shutdown of Federal Aviation Administration services over two weeks in July and August, putting thousands of government workers and contractors temporarily out of work.

A bipartisan compromise that left core issues unresolved permitted Congress to fully fund aviation spending through September. A subsequent agency funding extension expires in January.

STANDOFF OVER DISASTER RELIEF

A battle over funding for the Federal Emergency Management Agency in September threatened a spending bill that would keep the government functioning beyond Oct. 1, when the new fiscal year began.

The dispute focused on much needed disaster relief for communities ravaged by tornadoes, floods and other calamities in one of the most extreme years for weather in U.S. history.

Democrats and Republicans had deadlocked over whether some short-term funding for FEMA would have to be offset with spending cuts. A government shutdown was averted after the agency said it had enough to last until the fiscal year began. Congress then passed a temporary government funding measure that gave lawmakers more time to work through their differences.

DEFICIT REDUCTION COMMITTEE

The August debt ceiling agreement created a special congressional committee that was asked to find at least ${esc.dollar}1.2 trillion in deficit reduction over 10 years.

The panel of six Democrats and six Republicans began negotiations with high hopes of reaching agreement but ended nearly three months of closed-door talks in failure.

Credit rating agencies have warned that further failures by U.S. lawmakers to come to grips with budget deficits or efforts to block automatic spending cuts now set to begin in 2013 could trigger a downgrade of U.S. debt.

PAYROLL TAXES, 2012 SPENDING BILLS

Lawmakers came close to shutting down many government agencies in November after becoming deadlocked over an extension of a popular tax break for workers. The impasse threatened a massive spending bill to fund much of the government through the rest of fiscal 2012, which began on Oct 1.

With just hours to spare before government agencies began laying off workers and suspending operations, Congress passed the spending bill. The Senate overwhelmingly approved a two-month extension of the payroll tax to give lawmakers more time to negotiate a way to cover the cost.

House Republicans balked.

But House Speaker John Boehner came under increasing pressure, much of it from his fellow Republicans in the Senate, to pass the temporary extension. The stalemate was damaging the image of Republicans heading into next year's congressional and presidential elections, analysts said. Boehner relented and reached an agreement with Senate Democratic Leader Harry Reid to pass the Senate's two-month extension with a minor change. (Reporting by Donna Smith; Editing by Paul Simao)

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