Congress was faced with the threat of a government shutdown today if no action was taken on a Continuing Resolution (CR) to keep government funds flowing.  Before it went home for the Presidents Day break the House had passed a three-week extension of government spending running until March 11.  The Senate had a two-pronged challenge: it had to pass a CR before midnight tonight, and it couldn’t make any changes to the House-passed bill since the House had left town. 

To add some additional tension to the deadline, many Senators had left town and the leadership wasn’t 100% sure who was in town to vote.  Also, a handful of Republican Senators wanted to score political points by forcing votes on partisan issues such as blocking any vaccine mandates and a balanced budget constitutional amendment.  Fortunately, both leaders, Schumer and McConnell were on the same page of wanting to pass a bill and avoid any government shutdown issues.  At the end of the day, all the amendments were defeated, and the final CR passed on a vote of 65 to 27, allowing Senators to start their recess and leave DC.

When Congress returns on February 28 they will hear the President address the nation in his first State of the Union (SOTU) address on March 1, and the House and Senate will also start work on the delayed FY 2022 budget in order to meet the new March 11 deadline.   While it is possible for Congress to kick the can down the road once again, there is growing optimism that, in the next few weeks, an agreement can finally be reached on the budget for the fiscal year that began on October 1, 2021.

A large bipartisan majority favors a substantial increase in Defense spending, but Democrats will demand an equal increase for nondefense spending.  Some on the left are not happy with this deal as they want to cut defense spending and have larger increases in non-defense items, but in a 50/50 Senate that is just not going to happen.

Ukraine will hang over the geopolitical landscape in the coming days as the Made In Russia crisis continues with President Putin holding all the cards.  While US sanctions will make life more difficult for Russia, at the end of the day Putin may find the restoration of Ukraine to the Russian empire worth the cost – hard to tell. While Congress left town without passing a sanctions bill, the most potent sanction – blocking Russian account – can be done with an Executive Order.

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