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Category: Budget

Late Night Hurdles Lead to 9-hour Shutdown; Government Now Funded Through March 23

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Although there was a bipartisan agreement reached earlier this week on a two-year budget deal as part of the next short-term continuing resolution (CR), that did not mean that everyone was content.  Sen. Rand Paul (R-KY), a frequent critic of government spending, delayed the consideration of the measure on the Senate floor until after midnight, which meant that the CR that had been in place through last night had expired.  The expiration of that CR officially led to a government shutdown.  After he allowed the vote to proceed, the Senate overwhelmingly passed the CR by a vote of 71 – 28.

After Senate passage, the CR had to be sent back to the House, where there was more uncertainty about the level of support for it, with many Democrats concerned about the lack of an agreement on immigration and many hard-line conservatives wary of spending on domestic programs.  Ultimately, the House also passed the CR early this morning, by a vote of 240-186.

The measure was signed by the president at about 9 AM this morning, ending the shutdown.

Two-year budget deal reached in Senate

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Today, the Senate reached a far-reaching bipartisan budget agreement that would set top-line spending limits for FY2018 and FY2019, which would be added to the continuing resolution (CR) passed by the House.  The spending levels for the two years represent significant increases above what is currently allowed under the budget caps that were created in 2011.

Under the agreement, funding for non-defense discretionary programs would be increased by $63 billion in FY2018 and $68 billion in FY2019 while defense programs would see increases of $80 billion and $85 billion, respectively.

In addition, the deal includes an additional $2 billion for the National Institutes of Health over the next two years while also providing approximately $6 billion for the opioid crisis.  The agreement calls for $20 billion in infrastructure investment among its other provisions.

The deal does not address Dreamers and House Minority Leader Nancy Pelosi (D-CA) announced earlier in the day that she would not support any funding deal until she gets a commitment from Speaker Paul Ryan (R-WI) to bring an immigration bill to the floor.  The Senate agreement, which will be added to the short-term CR through March 23, must be sent back to the House and passed before midnight, Friday morning.

Read more about the deal here and here.

A budget deal on the horizon before a shutdown?

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As expected, the House agreed to yesterday by a vote of 245 to 182 the next short-term continuing resolution (CR) that would keep the government funded through March 23.  The current CR expires Friday morning at midnight.  The House-passed CR would fund the Department of Defense for the rest of the year at $30 billion over what the budget cap allows for while keeping the majority of the non-defense discretionary programs funded only through the length of the CR.  Senate Democrats, not surprisingly, have rejected the House approach.

One of the biggest reasons why the government has had to function through a series of short-term CRs is because of Congress’ lack of agreement on how much money should be available overall for FY2019.  It appears that the two parties and the two chambers might be reaching an understanding on the “top line” for this year and next.  While details have not yet been confirmed– with reports in the neighborhood of an increase for both defense and non-defense programs of $300 billion for two years– the Senate could very well strike the defense-only parts of the House-adopted CR and replace them with those that would set the new overall spending levels in its version of the CR.

Regardless of what the Senate does, unless it accepts the exact same legislative package as the House’s, the Senate language would need to return to the House for its consideration and adoption before the end of tomorrow in order to avoid a shutdown.

Still unresolved in all of this is the Dreamers situation.  To end the shutdown back in January, Senate Majority Leader Mitch McConnell (R-KY) committed to allowing the Senate to debate possible ways to address Dreamers if no solution was found before the expiration of the current CR.

Debt Ceiling and Appropriations

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Late yesterday, the Congressional Budget Office (CBO) said the Department of Treasury might make it into the first half of March before running out of cash to pay its bills, or a little later than Treasury’s latest update earlier in the day.

In November, CBO had projected that the statutory debt limit would not be reached until late March or early April. But because of legislation signed into law since the last estimate, most notably the tax code overhaul projected to lose at least $1 trillion in 10-year revenue, CBO is bumping up their time frame by a few weeks. Treasury’s own estimates, updated Wednesday, project borrowing can continue through Feb. 28, or slightly earlier.

Meanwhile, House and Senate Republicans are meeting for their three-day policy retreat in West Virginia. Republican leadership is confident they will avert another government shutdown. Currently, the House is preparing to pass a 6 week continuing resolution, which would keep the federal government open until March 22, 2018. Congress has yet to pass a long-term spending bill for fiscal year 2018, and lawmakers have relied on a series of short-term patches to keep the government open.

The House is expected to take up the measure early next week before the Democrats attend their annual retreat. Meanwhile, there appears to be little progress on spending caps and immigration. House and Senate leaders from both parties are negotiating a possible two-year spending deal that could include nearly $300 billion in additional appropriations, but the two sides remain apart on the distribution between defense and nondefense funds.

Meanwhile, discussions over both spending and immigration have halted virtually all other legislation moving and that could prevent Congress from advancing the Administration’s infrastructure proposal or proceeding to other legislative priorities for 2018.

OMB Targets Feb 12

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The Office of Management and Budget (OMB) announced the intent to release the Administration’s FY 2019 President’s Budget Request to Congress on February 12. Incidentally, that date is the Monday following the date set for the the expiration of recent CR passed earlier this week.

The release was slightly delayed because of time lost during the recent three-day government shutdown. The budget is legally required the first Monday of February, but this and past Administrations have missed the deadline. This will be the second budget by the Trump Administration.