As we suggested during the August Congressional recess, September was setting up to be a month of tumult in Washington, DC and thus far, our prediction is proving true. Reacting as expected to the devastation in Texas from Hurricane Harvey, the House voted earlier today to approve a relief package of almost $8 billion with a majority of the supplemental funding going to FEMA and a portion going to the Small Business Administration. The vote was a very bipartisan 419-3.
At the time, popular wisdom had the bill then going to the Senate where it was expected to pass with the inclusion of a year-long increase in the federal debt limit. This maneuver was expected to face some resistance in the Senate but pass, and then face more resistance when it returned to the House for a vote. What was unexpected was a deal between the President and Congressional Leaders to pass the Hurricane Harvey aid bill with a three-month extension of the debt limit and a three-month continuing resolution (CR), both expiring on December 15th. This latest development puts Republican leaders in the House and Senate in a difficult and unpopular position as they will have to enter into negotiations again on the budget and debt ceiling at the same time they are attempting to pass tax reform. It also alienates conservatives in the House and Senate that wanted to include conditions including spending cuts in exchange for increasing the debt ceiling.
It is only Wednesday and it is possible the Congress will be in session over the weekend working on this ever-changing package so stay tuned as we keep you apprised of the status of these issues.