President Obama Signs Legislation Lifting Debt Ceiling, Reopening Federal Government
By Cathy Weatherford
Insured Retirement Institute (IRI)
October 17, 2013 - President Obama signed bipartisan legislation this morning to lift the debt ceiling. The bill extends U.S. borrowing authority until February 7 and preserves the Treasury Department's ability to use "extraordinary measures" to prevent default during future debt ceiling debates. These measures permit Treasury to shift money around government accounts and issue IOUs to government employee retirement funds. This compromise also allows the federal government to reopen. It funds the government through January 15, 2014. It also provides back pay for federal workers who were furloughed during the shutdown.
Lawmakers also agreed to name members to a conference committee to hash out a budget plan with a December 13, 2013, deadline for reporting back to Congress. The conference committee will be chaired by Senate Budget Chair Patty Murray (D-Wash.) and House Budget Chair Paul Ryan (R-Wis.). Republicans are expected to push maintaining the discretionary spending level called for with the automatic budget cuts, known as sequestration, in the Budget Control Act of 2011, while Democrats will want to increase that spending cap and raise revenue. The Insured Retirement Institute does not expect efforts for major reforms on entitlements to go anywhere with this conference committee.
This shutdown and fiscal fight began with an effort led by several Senate Republicans to defund or delay President Obama's Affordable Care Act. Their efforts were not successful, but they did manage to include a provision tightening income verification for people receiving subsidies for health insurance. Efforts to delay or repeal the medical device tax and reinsurance fee in the health care law were not included in the fiscal package, nor was a move to eliminate the employer contributions for members of Congress and their staff. As such, the next budget battle - expected to occur in the beginning of the new year - will likely focus more on government spending instead of the Affordable Care Act.
As the government works to shore-up the nation's debt and deficit, the tax-deferred treatment of annuities may be at risk. Sign IRI's petition today to tell lawmakers to oppose any legislation that would erode these critical retirement savings incentives.
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