Congress narrowly avoided the potential crisis of a government shutdown, because FEMA found enough funding to last through Fiscal Year 2011, which ends this week. This eliminated the need for emergency 2011 funding, which was attached to a continuing resolution to fund the government. So they dropped that funding along with the offset that was the major bone of contention.

However, $2.65 billion in FEMA spending above the cap from the debt limit deal was included in the package. And the Office of Management and Budget plans to make that last as long as possible to avoid another showdown.

The White House signaled Tuesday that it will take a very expansive view of the new spending authority promised to FEMA by Congress and won’t need to return for more disaster aid prior to mid-November, when the pending continuing resolution expires [...]

The House will meet Thursday in a pro forma session to quickly approve and send to President Barack Obama a four-day stopgap measure to avoid any disruption Friday night when the current budget year ends. And with lawmakers returning next week, the House has scheduled votes Tuesday on a larger Senate-passed CR running to Nov. 18 and providing $2.65 billion in spending authority for Federal Emergency Management Agency disaster relief in 2012.

For most federal accounts, FEMA’s disaster share would translate into about $345 million over the next seven weeks, since spending under a CR is typically apportioned according to the length of the resolution. But in a letter to House and Senate leaders Tuesday, Office of Management and Budget Director Jack Lew indicated a far more generous approach, and officials said later that the disaster relief funds would be apportioned on an “as needed” basis rather than the standard “pro rata” formula.

The administration said this was not new for the disaster relief fund but conceded that what’s unique is the fact that fiscal 2011 will end Friday night with virtually nothing left in reserve. The empty coffers highlight the more expansive apportionment, and as much as $1.5 billion could go out the door before Nov. 18 by some estimates.

This just kicks future funding decisions until November 18, which runs right up to a Thanksgiving recess when lawmakers are going to want to leave town, by the way (that’s not a little thing and will move in the direction of a resolution). The White House will not have to come back before then for FEMA emergency funding. But they will need to include more FEMA funding above the cap in the next continuing resolution or omnibus appropriation for the rest of 2012. The White House expects that all $2.65 billion will be used up by the end of December, for ongoing cleanup operations. That’s if there are no additional disasters between now and then.

So FEMA funding will continue to be a feature of the next showdown, which has a host of moving parts. There’s an agreed level of spending, but Republicans may again call for offsets for the disaster relief funding over the spending cap.  And the most conservative members may want to use that $1.043 trillion number from the debt limit deal as a ceiling, not a floor.

Conservative House members don’t want a large omnibus appropriations bill that combines all the spending measures, but there’s no other practical way to do it. Distributing the $1.043 trillion in discretionary spending to the various agencies will be a bigger source of contention in the next fight, because there probably won’t be just an across-the-board haircut. And the possibility exists for unrelated policy riders to be thrown into that next bill. The November hostage event, then, will look similar to the one in March and April.

And don’t forget that the Super Committee recommendations could come out right at this time as well.

All in all, it is a bit of a joke that a seven-week spending bill is seen as a great source of progress and an example of Congress working.