Late yesterday, a potential budget agreement between the White House and Congress was released. It would boost both defense and domestic spending over the budget caps for the next two years, and lift the nation’s debt limit through March 2017. If the deal holds, it would eliminate the dual threats of a government shutdown and a debt default until after the November 2016 elections.
The Bipartisan Budget Act of 2015, which has not yet been finalized, would boost defense and domestic spending above sequestration levels by $50 billion in the first year and $30 billion in the second year. In each year, there would be an additional $16 billion spent using the Overseas Contingency Operations fund. It would also curtail a huge increase in Medicare premiums due to go into effect in January for some beneficiaries.
Specifically, the deal would:
- Increase discretionary spending by $80 billion above sequester-level spending caps (PL 112-25), with the increase split evenly between defense and nondefense programs. Sequester relief of $50 billion would be applied to FY 2016 and $30 billion for FY 2017.
- Include an additional $32 billion in Overseas Contingency Operations war account funding, split evenly between FY 2016 and FY 2017. That means spending would rise by $66 billion above the caps for FY 2016 and $46 billion above the caps for FY 2017.
- Draw offsets from other legislation, such as the House-passed 21st Century Cures medical research initiative (HR 6).
- Raise the debt limit, giving Republicans the opportunity to sell the package as raising the debt limit in exchange for constraints on spending. Democrats will insist that it is a so-called clean debt limit increase that is attached to other legislation. Two aides said the government’s borrowing authority increase would likely last through March 2017.
While it is no grand bargain like the Murray-Ryan Budget Deal from 2013, it will eliminate the risk of sequester cuts and provide some certainty in federal budget and appropriations for research universities.