With so much sound and fury out of Washington one would imagine something big must be happening. One would be wrong. The ongoing theatrical strawman between Republicans and Democrats is merely a massive spectacle which has one outcome: a compromise. But why not score some brownie points from the constituency in the meantime by "sticking firm to principles." And of course the spin by the MSM will lead to a huge relief rally in stocks once we get news on Thursday in the 11th hour that the government will not shut down. As if the government would shut down when it prints $100 billion in debt every two weeks. In the meantime here is a summary of the key parts and intermissions for the ongoing DC melodrama for the balance of the week, courtesy of Goldman.
Tuesday, April 5
- Working deadline for FY2011 budget deal. The legal deadline for extending funding authority for the federal government isn’t until Friday, but in order to get a bill passed in the House and the Senate by Friday night, it will need to arrive in the Senate no later than Wednesday, and will need at least one day of lead time in the House before that. In theory, passage Tuesday would mean that the House would break its own rule requiring that legislation is made public 72 hours ahead of any vote.
- House Republican budget resolution unveiled. The resolution (a non-binding outline that sets spending and revenue goals for the next decade) is expected to propose major reductions in discretionary spending and health-related entitlements, along with less specific reforms in Social Security and revenue-neutral reform of the tax code. The details of the resolution are generally less important than the signal the document sends; in this case Republican leaders may also hope that it shifts the debate away from the 2011 budget and toward the longer-term budget debate.
- GSE reform bills likely voted on in House Financial Services Committee. Republican Committee members introduced eight bills last week (among them: raising guarantee fees, accelerating portfolio wind-down, and eliminating housing goals) which are likely to pass in the committee this week. Movement on GSE reform in the Senate is expected to be much slower.
- President Obama meets with Israeli President Shimon Peres in Washington. Peres will meet with Sec. of State Clinton on April 4.
Wednesday, April 6
- Committee vote on House Budget Resolution? It hasn’t been formally scheduled yet, but the committee is expected to “mark up” its budget resolution this week, most likely on Wednesday. This normally involves votes on amendments to the budget package, followed by approval of the package, which then goes on to be considered by the full House. In order for the resolution to have an effect on the budget process, a single final version must be approved by both chambers of Congress; this may be too difficult a challenge this year given split control of Congress and policy differences seen to date.
- Possible Senate votes on EPA greenhouse gas regulation and/or ethanol subsidies. These are among the amendments the Senate may consider to a pending small business bill being considered as it awaits a spending deal. These votes have already been pushed back several times, and may not happen at all.
- NAT GAS Act reintroduced. Following the president’s speech last week that called for reducing oil imports through a variety of mechanisms, congressional sponsors of previous legislation to incentivize the use of natural gas vehicles will reintroduce their legislation. The bill is generally viewed as more likely than some of the other ideas the president highlighted to win bipartisan support (the previous legislation had more than 150 cosponsors, from both parties). Still, it would probably need to pass as part of a broader energy legislative effort, so it could still be weighed down by other broader energy issues.
Thursday, April 7
- House votes on blocking EPA greenhouse gas regulation and, separately, a bill to block FCC net neutrality regulation.
- Biofuel proposals will be the subject of a hearing in the Senate Energy and Natural Resources Committee. It will consider a bill sponsored by Sen. Harkin (D-IA) to provide loan guarantees for renewable fuel pipelines, require 90% of vehicle to be dual-fuel capable by 2016, and provide grants for blender pump installation.
- House Ways and Means Committee hearing on South Korea trade agreement
Friday, April 8
- Government shutdown deadline. By the end of Friday, Congress must approve legislation, and the president must sign it into law, to extend spending authority for the government past April 8, when the most recent stopgap spending bill expires. The most likely scenario is that this will happen, either through a last-minute deal on the remainder of 2011 (more likely) or another short-term spending measure (less likely, but possible). If agreement on either of these isn’t possible, “non-essential” federal operations would cease (this definition applies to roughly 40% of federal employees) until funding is restored. If a shutdown occurs, the most likely scenario is that it would last only a few days before a deal is reached to restore funding.