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Congress returns to pressure to get spending deals done

Key to budget deal is agreement between Pelosi and Trump, GOP senator says

Senate Appropriations Committee Chairman Richard Shelby had hoped to start marking up fiscal 2020 spending bills after the July Fourth recess, but that looks unlikely now. (Tom Williams/CQ Roll Call file photo)
Senate Appropriations Committee Chairman Richard Shelby had hoped to start marking up fiscal 2020 spending bills after the July Fourth recess, but that looks unlikely now. (Tom Williams/CQ Roll Call file photo)

With only a month to go before the August recess and three months until the end of the fiscal year, House leaders will not bring the two remaining fiscal 2020 appropriations bills — Homeland Security and Legislative Branch — to the floor due to divisions within the Democratic caucus over those bills and diminishing floor time.

Some Democrats are opposed to an inflation adjustment to lawmaker salaries, as allowed in the Legislative Branch bill. Other Democrats are opposed to immigration and border funding provisions in the Homeland Security bill.

“We’re not expecting to take up the two remaining appropriations bills,” a senior Democratic aide said. “The Senate needs to start acting on their bills, so we can move ahead with the appropriations process and prevent another Trump shutdown at the end of the fiscal year.”

In a letter to House Democrats on Friday, House Majority Leader Steny H. Hoyer, D-Maryland, said the chamber will take up a defense authorization bill this week and follow up with additional legislation later in the month, including bills to raise the minimum wage, bring down health care costs and other initiatives.

Hoyer had set a goal of passing all 12 appropriations bills before the end of June, and the House succeeded in passing 10 of them. The legislation advanced across the floor primarily in two batches on party-line votes. The House set a discretionary topline of $1.295 trillion in a deeming resolution in April.

Senate Appropriations Chairman Richard C. Shelby, R-Alabama, had hoped to begin marking up fiscal 2020 bills after the July Fourth recess, with the option of using temporary spending allocations in the absence of an agreement between the Senate, House and White House to raise the spending caps.

[Familiar offsets could resurface in spending caps talks]

But that prospect appears unlikely after Senate Majority Leader Mitch McConnell raised objections last month to proceeding without an agreement, as a GOP aide confirmed.

Going forward with markups without a deal with the White House could drive a wedge between the Senate GOP and President Donald Trump and undermine the White House and Senate GOP negotiating positions, according to a Republican senator and former GOP aide who spoke on condition they not be identified.

The senator said the key to getting a budget deal is an agreement between House Speaker Nancy Pelosi and Trump on a plan that is acceptable to the Senate but not too objectionable to House Republicans, in order to avoid a friction point between the president and conservatives ahead of the 2020 election.

Negotiations continue

Top House and Senate leaders and White House negotiators have met several times to discuss raising the caps. Up to now, the talks have focused mainly on the fiscal 2020 caps, people familiar with the conversations said.

If not raised, the fiscal 2020 caps would fall by about $125 billion, or 10 percent, from current levels to $576 billion for defense and $543 billion for nondefense discretionary, as the 2011 deficit-reduction law kicks back in after the expiration of the latest two-year budget agreement.

In the talks, negotiators face the challenge of finding a way forward between Trump’s request for a $750 billion defense topline (including war funding) and a cut in nondefense spending, and Democrats’ demand for parity, or equal increases in defense and nondefense spending limits.

House Democrats marked up their bills under a $733 billion defense topline (including $69 billion in overseas contingency operations funds, or OCO), and a $639 billion nondefense topline (including $8 billion in OCO). The House plan also permits additional cap adjustments for nondefense, including $7.5 billion for the census in fiscal 2020.

In the Senate, there appears to be a bipartisan majority in favor of the $750 billion defense level requested by Trump. The Senate on June 27 passed, 86-8, a defense authorization bill that would authorize about $742 billion for the military. Other committees are expected to authorize the remaining $8 billion for the military.

During the last negotiating session, Treasury Secretary Steven Mnuchin and acting White House Chief of Staff Mick Mulvaney suggested freezing discretionary spending at current levels for a year coupled with a one-year suspension of the debt limit as a fallback in case a caps deal cannot be reached. Democrats generally oppose that idea.

And last week, 15 Senate Republicans, including three appropriators, urged the White House to abandon the proposal, arguing that a spending freeze would not provide sufficient funding for the military.

In a letter Wednesday, the GOP senators said the Pentagon has never had to operate under a stopgap funding measure for a full year, and that if it has to do so, the Defense Department “would be incapable of increasing readiness, recapitalizing our force, or rationalizing funding to align with” the president’s National Defense Strategy.

The signers of the letter, including Senate Armed Services Chairman James M. Inhofe, R-Oklahoma, and Sen. David Perdue, R-Georgia, said they believe that any savings from freezing spending would be “dramatically offset by the additional expenses that DOD will be forced to absorb due to uncertainty and inefficiency.”

In a statement on the Senate Republicans’ letter, a senior administration official said a stopgap would avoid the threat of Democrats’ insisting on new provisions in appropriations bills that would restrict the president’s deregulatory and border security plans.

“If these members have another plan for fiscal restraint, then we’re all ears,” the administration official said. “However, pointing to elusive mandatory spending cuts while letting discretionary spending skyrocket and dismissing it as ‘squabbling’ is a cop-out.” The official said the letter “ignores the House meltdown over a simple humanitarian supplemental . . . and lacks a plan to stop Democrats from dismantling the President’s deregulatory and border security agendas with poison-pill riders.”

Democratic aides, speaking on background, say there is disagreement between the White House and other Republicans over the shape of a budget deal, noting the Senate Republicans’ letter as an example. At the same time, House Democrats have different views on raising the caps, with some liberals opposed to a defense increase and some moderates concerned about the overall increase in spending.

The House bills are written under a base defense limit of $664 billion and a nondefense limit of $631 billion. The deeming resolution also allows for cap adjustments, including $69 billion in OCO for defense, which brings defense up to $733 billion, and $8 billion in OCO for nondefense.

Unless an agreement is reached in the coming weeks, the pressure to come together on fiscal 2020 appropriations and extend the debt limit will only intensify after Congress returns from the monthlong August recess. The Congressional Budget Office has estimated that so-called extraordinary measures, the accounting maneuvers that have been used to avoid breaching the debt limit since the last suspension expired in March, could be exhausted by late September or early October. The Treasury said the measures could run out as early as this summer.


John M. Donnelly contributed to this report.

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