Congress successfully punts on a government shut down–but creates an impossible January

Yesterday Congress did indeed find a way to pass a bill that extends government funding from today’s December 22 deadline until January 19.

Congress achieved this goal by punting on just about everything. The legislation included a waiver so that the automatic cuts that are supposed to take effect when Congress blows through budget caps (as it just did) won’t take effect until January 19. The House approved an $81 billon in additional disaster recovery funding, but the Senate didn’t even take up the matter. Efforts to deal with DACA protection for children of illegal immigrants? Postponed. Funding to stabilize Obamacare insurance markets? Postponed. Increased military spending? Postponed. A decision on whether to raise spending caps on domestic as well as military spending? Postponed. A further suspension of the debt ceiling limit that expires today? Postponed.

All this and more has been pushed off into January. (Even the few spending items actually included in the bill were stop gap measures, such as less than six months of funding to postpone a shutdown in some states of the Children’s Health Insurance Program.)

I think this was nothing more than battle fatigue as even normally “never-compromise” groups such as the ultra-conservative Republican Freedom Caucus decided not to kill the extension even though it didn’t include such demands as an increase in long-term defense funding.

But none of these battles have been ended–and the disappointed reaction among some groups of Republican and Democratic members of Congress to the extension suggests that positions will harden by January. Brinkmanship to the right and brinkmanship to the left.

All this and a debt ceiling crisis that threatens the government’s ability to pay its bills by sometime toward the end of the month or by mid-February….

It’s hard for me to imagine that the markets won’t find something to make them nervous in all this come January 2018.