By Erik Wasson - 01/15/13 01:05 AM EST
The White House has informed House Budget Committee Chairman Paul RyanPaul RyanCoal’s clout in Congress to take a hit Overnight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal Overnight Defense: Benghazi report fallout | Nearly 50 dead after Istanbul attack MORE (R-Wis.) that it will miss the legal deadline for sending a budget to Congress.
Acting Budget Director Jeff Zients told Ryan in a letter delivered Friday that the budget will not be delivered by Feb. 4, as required by law.
Zients blamed the delay on the late passage of the “fiscal cliff” deal, and wrote that the administration is “working diligently on our budget request.”
Under the law, President Obama must submit a budget by the first Monday in February, but he has met the deadline only once. The annual budget submission is supposed to start a congressional budgeting process, but that has also broken down. The Senate last passed a budget resolution in 2009.
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Ryan last Wednesday had asked the White House in a letter if it would miss the deadline, and Republicans are likely to hammer the administration more the later the budget is delivered.
Ryan’s office says that Obama has missed the budget deadline more than any president since the 1920s. Obama’s first budget was delayed until May, while his second budget was delivered on time. The last two budgets were late but came in February.
Congress and the White House struck a deal on New Year’s Eve on the “fiscal cliff” of spending cuts and tax hikes. The agreement extended current tax rates on annual household income below $450,000, but allowed rates on income above that threshold to expire.
The agreement also delayed, for two months, the 2013 budget sequester that would impose spending cuts on the government. Those cuts were agreed to as part of a 2011 deal to raise the debt ceiling.
Because the deal was not reached until Jan. 2, “the administration was forced to delay some of its FY 2014 budget preparations, which in turn will delay the budget’s submission to Congress,” Zients wrote in the letter to Ryan. “We will submit it to Congress as soon as possible.”
That last-minute deal has thrown a wrench into the annual budget process, sources say, because it did not finalize 2013 appropriations or replace the nearly $1 trillion in automatic discretionary cuts imposed by the August 2011 debt-ceiling deal.
“They have no baseline,” one expert said.
The expert said the Obama administration might not want to have its budget taken as an opening offer in the coming fight over raising the nation’s $16.4 trillion debt ceiling. Obama on Monday demanded that Congress raise the debt ceiling.
The nation could exceed the debt limit and default by the end of February without action by Congress.
The Congressional Budget Office also faces fiscal cliff-related challenges in writing its annual budget outlook. That outlook, which normally comes out in January, will be released on Feb. 4, the CBO announced Monday.
Republicans are demanding that Obama propose sharp spending cuts to offset any increase in the ceiling.
But Obama reiterated his stance in a press conference Monday, pressing lawmakers to raise the debt limit without tying it to cuts or entitlement reform.
Failure to raise the ceiling will cause a default on payments ranging from Social Security benefits to tax refunds to bond interest, depending on how long it takes Washington to raise the limit and what bills Treasury decides to pay.
The Bipartisan Policy Center estimates default could come as early as Feb. 15.
The White House announcement comes as former Obama budget director and current Chief of Staff Jack LewJack LewIRS inversion rules face blowback Overnight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal Senate faces critical vote on Puerto Rico MORE is awaiting confirmation as Obama’s new Treasury secretary, replacing outgoing Secretary Timothy Geithner.
House Armed Services Committee Chairman Buck McKeon (R-Calif.) complained that the Pentagon’s 2014 budget was being delayed due to the potential for across-the-board spending cuts under sequestration.
In a letter to Zients obtained by The Hill, McKeon questioned why the Pentagon now says sequestration is preventing its budget from being completed when OMB told the Pentagon last year not to plan for the cuts in the months before they were scheduled to take effect.
“If sequester was not enough of a threat to do any planning or comply with the law, I can only assume it is not enough of a threat to delay your budget,” McKeon wrote.
— Last updated at 8:05 p.m.