The 3 most pressing issues Congress must address before the August recess

The Capitol in Washington is quiet after lawmakers departed the for the Independence Day recess, Friday, June 30, 2017. The Republican leadership in the Senate decided this week to delay a vote on their long-awaited health care bill in following opposition in the GOP ranks.(AP Photo/J. Scott Applewhite)

Congress is back in Washington this week after the July 4th recess and facing a heavy legislative agenda with only three weeks to go before they leave town again for the month of August.

The time crunch has left many wondering whether the Republican-led Congress will be able deliver. Others, including President Trump, are calling for the August recess to be canceled altogether so lawmakers will have something to show the folks who put them in office.

There are three big items on Congress' to-do list:

1. Pass a bill to repeal and replace Obamacare.

2. Implement tax reform to shape the FY 2018 budget.

3. Deal with the debt ceiling.

If Congress is unable to accomplish these three, experts say they will not only put themselves and President Donald Trump in political jeopardy, but they also risk throwing the country into crisis.

While not all of these agenda items have to be dealt with before the five-week August recess, there is a growing sense of urgency that is driven by the coming end of the fiscal year on September 30.

Between the end of the August recess and the start of the 2018 fiscal year, the Senate has only 17 legislative days scheduled. The House has 14.

In that time, Congress must pass a budget resolution and appropriations or face a government shutdown.

A significant part of the 2018 budget is dependent on securing tax cuts that President Donald Trump and his allies in Congress believe will shrink deficits and jettison economic growth. The budget is also expected to take into account the billions of dollars in savings resulting from the repeal of Obamacare. If those policies fail to materialize, it could mean a rising deficit and an end to the reign of economic confidence that has characterized Trump's first months in office.

Even more serious, Congress must deal with the debt ceiling, the U.S. government's borrowing limit representing the government's ability to pay bills and make good on its debts. The Congressional Budget Office warned members of Congress last month that if they fail to raise the borrowing limit, the Treasury will run out of cash by early to mid-October.

Treasury Secretary Steve Mnuchin has repeatedly called on Congress to pass a "clean" debt ceiling hike before they leave town in August, advising members during a June hearing that the financial markets "don't want us to wait" to approve the measure that will stave off a U.S. government default.

The question that Senate Majority Leader Mitch McConnell and House Speaker Paul Ryan will have to answer this month is whether they have enough time to accomplish what they have to do before sending members back home until Labor Day.

Since the start of the year, the GOP legislative agenda has been hung up on health care. Progress has been slow and there is not yet a clear path to bring the moderates and conservatives on board to get the 50 votes needed for passage.

McConnell and other Republican leaders in the Senate have indicated that there will be a vote on a revised health care bill before the August recess.

Donald Trump is itching for at least one major legislative victory, repealing Obamacare, and he wants Congress to stay in session until he has a bill on his desk.

On Monday he tweeted, "I cannot imagine that Congress would dare to leave Washington without a beautiful new HealthCare bill fully approved and ready to go!"

Trump is not alone. On June 30, ten Republican senators signed a letter to Mitch McConnell asking him to cancel or shorten the August recess.

The number of legislative days remaining before the October 1 start of the fiscal year, the senators wrote, "does not appear to give us enough time to adequately address the issues that demand immediate attention." This includes repealing and replacing Obamacare, passing a budget and of course, dealing with the debt ceiling.

Every year at least a handful of lawmakers propose canceling the long summer recess, but the senators warned that "the stakes are much higher this year."

Since Trump's election, financial markets have posted record gains in anticipation of tax cuts and regulatory reform. Businesses have also prepared to reap the benefits of tax reform.

With tax reform "in the balance," the senators are pressing for more time, warning that "failure to deliver could have devastating economic consequences."

A similar charge is being led by 12 House Republicans who signed a letter to Speaker Ryan asking him to cancel the August recess "to ensure there is enough time to address the long list of pressing issues on our docket."

Citing GOP campaign promises, the congressmen explained, "Our constituents expect us to work hard and will be disappointed if we shut down for four to five weeks when we could move our agenda forward. ... We cannot afford to lose any of the momentum we have and therefore request that you cancel August recess."

According to Steve Bell, senior adviser at the Bipartisan Policy Center, the Congress hasn't been faced with a more challenging schedule in years.

"They have got as jammed a schedule as I have ever seen, especially on the fiscal front," Bell noted.

The tensions surrounding both the debt limit and the passage of a budget, combined with revised government projections of fewer tax revenues and a larger than expected budget deficit have created a kind of perfect storm. Some analysts have compared it to the 2011 fiscal cliff, which resulted in the first ever downgrading of the U.S. credit rating.

"There is nothing in the financial world that would be as catastrophic as the United States not paying its debt," Bell said, noting the urgency for Congress to raise the debt ceiling. "It would be the nuclear event in the markets."

As far as passing a budget and getting tax reform, those may have to wait. Given the fact that Congress rarely passes a budget on time, missing the September 30 deadline would not be a catastrophe.

But tax reform was built into President Trump's budget request and is a considerable factor for members of Congress who are now drafting the budget. Trump's 2018 budget would break congressionally mandated spending caps, cut spending on domestic spending and increase the defense budget by nearly 10 percent. The budget also anticipates $2 trillion in additional revenue over ten years and economic growth reaching 3 percent annually by 2021. All of this borne out of large tax cuts for individuals, businesses and corporations.

Peter Ferrara, senior policy analyst at the Heartland Institute said that if Congress doesn't pass tax reform or repeal and replace Obamacare in the coming months, it may leave holes in the budget but it won't be "disabling." Eventually, he says, the Republican Congress and Trump will enact their agenda, because the political costs of not doing so are too high.

"The stakes couldn't be larger for Trump right now," Ferrara explained. "If he passes the Obamacare repeal replace and the tax reform gets passed ... the economy is going take off. When the economy takes off he's going to be guaranteed reelection."

"If they don't pass that stuff, it's not just Trump that won't be reelected," he continued. Moderate Senate Republicans will be vulnerable if they block the health care bill and even Democrats can "expect retribution" if the president's agenda is blocked.

All of this pressure to make good on long-term campaign promises has shaped Ferrara's belief that the August recess will be canceled.

According to Bell, the mounting pressure on the Republican Congress and on President Trump to get a win on health care and avert a fiscal catastrophe has created an extraordinary set of circumstances, and even some opportunities.

"That opens up this possibility: That they would say for the first time [in at least forty years] we're going to come back two weeks early and we're going to work again on health care and the budget," Bell suggested. "Because they will face, in September, this logjam which would be impossible to address under normal circumstances."

If the Republicans can't secure a health care vote before the August recess and aren't making sufficient headway on the budget, tax reform by the end of the fiscal year, the only option left could be (gasp) bipartisanship.

"I think at some point [President Trump] will probably say either publicly or privately, let's get the Democrats in and get some deals. Because above all, I think the president wants a couple victories," Bell noted.

Whether returning to Washington a few weeks early or canceling the August recess altogether will result in any legislative victories is still a gamble, Bell concluded.

"The question you have to ask is this: Even if they come back early, can they get everything done?"

close video ad
Unmutetoggle ad audio on off