The Treasury Department can use so-called extraordinary measures to extend that date so an increase won’t be needed until August, said Steve Bell, senior director of the economic policy project at the Bipartisan Policy Center in Washington.
The gap until the next potential fiscal showdown buys time for lawmakers working on tax policy to focus on a possible rewrite of the U.S. tax code instead of wrangling with more immediate issues. The House Ways and Means Committee has set up 11 bipartisan working groups to grapple with revising the code, and they are scheduled to report to the full panel by April 15.
“It’s an important time for us to be pushing the ball down the field,” said Representative Pat Tiberi, an Ohio Republican and Ways and Means member.
House Speaker John Boehner, an Ohio Republican, said that “talk about raising revenue is over,” on ABC’s “This Week” program yesterday. “It’s time to deal with the spending problem.”
Similarly, the Senate Finance Committee is starting a series of bipartisan meetings on a tax overhaul.
Meanwhile, the automatic cuts that started March 1 will remain in place. The reductions total $85 billion this year and $1.2 trillion over nine years. Because government agencies must give employees a 30-day notice of furloughs, some effects of sequestration will start being felt.
Federal Aviation Administration workers, including air-traffic controllers, have been told that furloughs will begin April 21. Private firms that operate airport towers are awaiting the FAA’s decision on how many will be shut starting April 7.
Supreme Court justices Anthony Kennedy and Stephen Breyer told lawmakers last week that cuts affecting the federal judiciary would undermine its work if left in place for more than a few months. The reductions amount to about 5% of the court’s budget, or $3.7 million, for the rest of the fiscal year, which would be absorbed temporarily through furloughs and shorter work days for some employees.