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Conflicting incentives for quick election-year spending deal

Retiring senators could fuel deal, but elections often drive delays

Retiring Sen. Richard C. Shelby, R-Ala., may want to enact one more spending package before he retires.
Retiring Sen. Richard C. Shelby, R-Ala., may want to enact one more spending package before he retires. (Tom Williams/CQ Roll Call file photo)

ANALYSIS — The optimistic case for passing appropriations bills this year goes something like this:

A renewed focus on defense spending brought about by the war in Ukraine and Chinese saber-rattling across the Taiwan strait could help facilitate a deal. The coming retirement of Senate appropriations leaders could build momentum. And the worst inflation in 40 years could expedite the process, as stopgap funding would bite worse than usual.

Yet the experience of the past dozen years encourages pessimism.

In theory, lawmakers are supposed to complete a dozen spending bills by Sept. 30 each year. While that almost never happens on time, election years are typically worse.

Over the past six election cycles, lawmakers have sent a total of six spending bills to the president’s desk before voters went to the polls in November. Five of those were signed into law in 2018 in a rare burst of speed and bipartisan comity, before the end of the fiscal year Sept. 30.

Democrats took back the House in the 2018 midterms. From there the process promptly degenerated into the longest partial government shutdown in history for the remaining agencies, as then-President Donald Trump battled victorious Democrats over funding for his prized border wall. The remaining seven spending bills didn’t pass until the following February.

The closer corollary in recent history may be 2010, when Democrats held Congress and the White House. The midterm tidal wave crashing into them was already evident in April, as generic ballot polling showed the GOP with a sizable advantage.

House Democrats brought only two spending bills to a full Appropriations Committee markup and the floor. Senate appropriators reported all but one bill out of committee; none went to the floor. Republicans went on to take 63 seats and control of the House in the midterms, and the “lame duck” session was focused on extending expiring tax cuts and other higher-profile matters.

Unfinished fiscal 2011 spending bills were punted into the following March. Republicans then pushed through a series of spending cuts in short-term continuing resolutions before lawmakers cleared a yearlong CR attached to a full-year Defense spending bill in April 2011; billions of dollars in home-state earmarks were scrapped.

Given similar polling facing President Joe Biden and the Democrats today, Republicans again have an incentive to delay spending bills, potentially until next year, when they may have control of the House and possibly the Senate.

“I would be absolutely shocked if Congress were to finish the appropriations process before December at the very earliest,” former Democratic budget aide Tom Kahn, a distinguished faculty fellow at American University, said. “Republicans have every incentive to delay the process until they control Congress,” when they would have “the leverage to add riders, cut nondefense spending and increase defense spending.”

‘Four corners’ meeting

A key meeting this week may shed some light on which approach Republicans take.

The “four corners” of the spending committees — House Appropriations Chair Rosa DeLauro, D-Conn., and ranking member Kay Granger, R-Texas, Senate Appropriations Chairman Patrick J. Leahy, D-Vt., and ranking member Richard C. Shelby, R-Ala. — plan to meet Thursday to begin discussions on budget caps.

If Republicans are ready to make an offer, it could signal seriousness about passing appropriations bills this year. Another thing to watch is whether Democrats start the negotiations at something close to Biden’s appropriations request: $1.6 trillion, roughly evenly divided between defense and nondefense programs.

That’s a no-go for Republicans who panned the Biden request as soon as it was released.

Domestic and foreign aid accounts would see a 14 percent boost over this year on average; the Pentagon and other defense-related accounts, 4 percent. And among nondefense agencies, Homeland Security would receive just a 1 percent boost, while a handful of other departments would get close to, or above, increases of 20 percent.

Biden’s first budget last year proposed a less than 2 percent bump for defense, with 16 percent more for nondefense. Given the Senate’s 60-vote threshold for appropriations bills, Democrats knew they ultimately had to cut a deal that moved closer to the GOP’s “parity” demand. Once that framework was in place, a fiscal 2022 omnibus came together fairly quickly.

It’s not just Republicans pushing more defense spending. Last year, the House and Senate Armed Services committees nearly in unison voted for much higher defense budgets than Biden requested, which was a catalyst for the eventual appropriations deal.

And some centrist Democrats in tough races are expressing concern as well. Rep. Elaine Luria, D-Va., a Navy veteran running in a district GOP Gov. Glenn Youngkin carried by a large margin, slammed the Biden defense proposal after it was released. During a House Armed Services hearing April 5, she expressed skepticism that the Navy and Air Force are sufficiently prepared for a potential invasion of Taiwan by China.

“If I am the big four of appropriations, I am probably looking at the model that jump-started them last year and seeing whether or not that could be employed to getting bills this year,” former top GOP appropriations aide Jim Dyer, a senior adviser at Baker Donelson, said. “You also have to put the question to the House Republican leadership — do you want bills?”

House Democratic leaders said they will try to reach a quick agreement with Republicans on a spending framework, but they won’t wait to get started. As of now House Democrats are planning to mark up fiscal 2023 bills in June and bring them to the floor in July, with or without a deal.

In the Senate, the retirements of Leahy and Shelby at the end of this Congress give both an incentive to complete spending bills and leave on a high note.

And Sen. Susan Collins, R-Maine, who’s in line to take over next year as the top Appropriations Republican, said she’d prefer to wrap up this year’s business first.

“We want to start with a clean slate,” Collins said of herself and Sen. Patty Murray, D-Wash., who’s likely to assume Leahy’s position next year.

Inflation, earmarks, uncertainties

Rising inflation — the consumer price index in March rose to 8.5 percent for the preceding 12 months — also will put pressure on the Congress to pass an appropriations package rather than rely on temporary stopgap spending bills or continuing resolutions, which would generally continue spending at current levels for federal agencies. The Biden budget projected inflation would rise by only 2.3 percent next year, based on an economic forecast that was locked in last November.

“When inflation’s 2 percent and you do a CR and a freeze, no big deal,” Marc Goldwein, senior vice president at the Committee for a Responsible Federal Budget, said. “You can figure any agency can find 2 percent in their budget especially if you can slow stuff down.” But, he added, “when inflation is 8 percent, that becomes a little more challenging.”

Another development that could increase pressure for a deal is the return of earmarks last year after a 12-year hiatus. Delaying final spending decisions until after the elections or next year would at least postpone the inclusion of additional projects and cast uncertainty over their future under potential GOP control.

Lawmakers obtained $9 billion in local projects in the omnibus enacted last month. Shelby led the pack, securing more than $548 million in home-state projects without the help of other members. Other top Senate GOP appropriators came in close behind, including Missouri’s Roy Blunt, who’s also retiring. Leahy came in fifth, with just short of $160 million.

Top House earmarkers included conservatives like Daniel Crenshaw, R-Texas, who had more than $26 million in the final bill. That’s a very different dynamic from 2010, when earmark-related scandals and rising deficits led lawmakers to ban earmarks starting in 2011.

Other factors, like opposition to lifting the pandemic-related Title 42 restriction on immigration next month — which has already stymied a $10 billion pandemic response package — could stand in the way of a deal. The uncertainties of the war in Ukraine, the possibility of another COVID-19 surge and the prospect of a recession that some economists are predicting also could frustrate appropriators.

“All of that makes it hard to see where things will stand in September,” Robert L. Bixby, executive director of the Concord Coalition, said. “But the election is a certainty, and I can’t see any agreement before then.”  

Lindsey McPherson and Aidan Quigley contributed to this report.

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