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Deal close on fiscal 2023 spending framework as stopgap prepped

Democrats seem willing to accept lower nondefense spending level, given slim margin and prospect of GOP control next year

House Appropriations Rosa DeLauro, D-Conn., speaks before HHS Secretary Xavier Becerra testified during a budget hearing on Thursday, March 31, 2022.
House Appropriations Rosa DeLauro, D-Conn., speaks before HHS Secretary Xavier Becerra testified during a budget hearing on Thursday, March 31, 2022. (Tom Williams/CQ Roll Call)

Negotiators are nearing a bipartisan funding agreement to pave the way for an omnibus package to clear both chambers next week, with appropriators in both parties signaling Democrats are willing to accept a lower nondefense allocation than they would prefer.

Lawmakers still need to iron out final kinks that will allow them to distribute compromise subcommittee allocations to appropriators, but those involved in the negotiations say they’re nearing a framework deal that will allow them to write the final fiscal 2023 spending measure.

“We’re very close to getting an omnibus appropriations bill that would be, I think, broadly appealing,” Senate Minority Leader Mitch McConnell said at a news conference Tuesday afternoon. 

The emerging agreement would set defense spending at $858 billion, in line with the annual authorizing bill the Senate is considering this week, “without having to pay a bonus above what President Biden asked for, for domestic priorities of the Democrats,” the Kentucky Republican said. 

Senate Republicans have said they would not go above Biden’s overall topline of nearly $1.65 trillion, leaving room for roughly $787 billion in nondefense spending. That would be close to an 8 percent or $57 billion boost over the previous year, compared to a nearly 10 percent or $76 billion increase for defense spending. 

Democrats had been seeking a more than 11 percent or $83 billion increase for nondefense. But Republicans have been adamant that’s too large, given Democrats pumped hundreds of billions of dollars into domestic programs through two major partisan budget laws this Congress.

Dollar ‘delta’ shrinking

While negotiators wouldn’t get into details on the numbers, all indications are that Democrats are moving toward the Senate GOP position to secure a deal before Republicans take control of the House next Congress.

“We’re not done and anything could fall apart at any moment, but the sentiment is good, and the delta in terms of the dollar amount difference is shrinking,” Transportation-HUD Appropriations Subcommittee Chairman Brian Schatz, D-Hawaii, said after the Democratic Caucus lunch Tuesday. “We’re making the numbers work.”

Schatz didn’t expect a topline deal to come together Tuesday despite being “reasonably hopeful” it was close. Senate Appropriations ranking member Richard C. Shelby, R-Ala., was more optimistic, saying earlier Tuesday that a deal “in principle” could happen “maybe today.”

Senate Majority Leader Charles E. Schumer said at a news conference following the Democratic Caucus lunch that the parties are getting closer to a deal but “there’s still some disagreements.” 

‘The best we can’

Senate Minority Whip John Thune, R-S.D., said House Democrats’ desire to increase nondefense spending seems to be the main obstacle to a deal. 

Still, House Democratic appropriations have started to signal they’re willing to accept a lame-duck deal that doesn’t go as far as they prefer since the party will be in a weaker negotiating position next year when Republicans take control of the House.

“The groundwork was set yesterday to say, ‘we’re fighting as much as we can; we’ll do the best we can because next year is going to be even tougher,'” Rep. Henry Cuellar, D-Texas, a senior appropriator, said. He was referring to a discussion Democrats had on the state of omnibus negotiations during their Steering and Policy Committee meeting Monday night.

House Appropriations Chair Rosa DeLauro acknowledged that Democratic negotiators have to make the best deal they can, given voting margins in both chambers, and then sell it to their members. 

“There’s a real healthy understanding that the government should not shut down, that we have some very, very good things in the bill,” the Connecticut Democrat said. “No bill is going to be everything that you want to have. They know that.”

DeLauro wouldn’t comment on where the numbers will land, saying there are still issues to work out.

One of those appears to be the treatment of veterans health care funds. Both parties appear to be on board with a nearly 22 percent, or $21 billion, increase above fiscal 2022. Since that hefty boost would cut into Democrats’ other nondefense priorities, there’s been talk of classifying some of the funding as mandatory so other domestic accounts wouldn’t have to compete for money.

House Military Construction-VA Appropriations Subcommittee Chair Debbie Wasserman Schultz, D-Fl., said that discussion wasn’t yet resolved. 

Senate to start 

Assuming an omnibus deal comes together, it will start next week in the Senate. That’s intended to demonstrate a show of bipartisan support to any House holdouts on either side of the aisle.

Senate Republicans say they’re not willing to stay in town past Dec. 22. 

“This needs to be finished no later than late evening on the 22nd. We intend to be on the road going home on the 23rd,” McConnell said. “We intend not to be back here between Christmas and New Year’s. And if we can’t meet that deadline, we’d be happy to pass a short-term CR into early next year.”

Democrats, however, have said the only alternative to an omnibus is a yearlong CR. 

“The thing is if we have a continuing resolution, then it would be to the end of next year because the House next year would never be able to put together their own omnibus,” Senate Appropriations Chairman Patrick J. Leahy, D-Vt., told reporters. “It’d be cuts in defense, cuts in nondefense cuts, cuts in COVID [aid] … name the thing you like whether you’re on the right or the left, it’d be cuts.”

Thune said he “can’t envision a scenario” where Congress actually enacts a full-year CR, noting that has never been done for all 12 appropriations bills. He thinks Democrats would negotiate if the need for a CR arises.  

An omnibus agreement needs to come together quickly if lawmakers want to avoid that negotiation, Thune said. “We’re almost past the point of no return just in terms of writing it up and reading it and scrubbing it and all that,” he said.  

However, Leahy said Democrats have most of an omnibus drafted already. Once negotiators reach agreement on the toplines, the tweaks that will be needed to reflect that are “easy things that can be done in a day,” he said.

One-week stopgap 

To buy time for writing the massive year-end package, expected to span thousands of pages, lawmakers plan to take up a one-week continuing resolution to replace the one expiring Friday.  

The House Rules Committee met Tuesday to report out the one-week CR, using an unrelated vehicle so it can pass as a motion to concur in the Senate amendment, which will allow that chamber to skip some procedural hurdles. The rule also sends another unrelated bill back to the Senate, so they have an expedited vehicle to use for the omnibus.

House Republican leadership is whipping against the one-week bill because they prefer a CR to the next Congress, but there are expected to be enough Senate Republican votes to get it through that chamber. 

Whether the Senate can clear it in time to beat the Friday deadline is an open question, since any senator can object to a unanimous consent agreement. 

But the White House budget office typically sends out guidance to agencies not to start shutdown procedures if action is imminent.

Schumer said on the floor he hopes nobody in the Senate stands in the way of passing the one-week CR through unanimous consent, if needed. 

But Sen. Mike Braun, R-Ind., said that was wishful thinking, as several senators want to make a point about bigger spending and the rapid run-up in federal debt.

“There are seven or eight of us who are not going to, you know, just let this go through without some kicking and screaming,” Braun said. 

Add-ons

Once a deal on funding toplines is reached, appropriations subcommittees in both chambers can finalize their portions and leaders can negotiate unrelated add-ons.

All four congressional leaders support adding an overhaul of the Electoral Count Act to clarify the certification of Electoral College votes, Schumer said.

The deal was expected to include at least a portion of a White House request for $85 billion in supplemental funding. That request included $37.7 billion for aid to Ukraine, $10 billion for the COVID-19 pandemic, and $37.3 billion in disaster relief, mostly to address hurricane damage in Florida and Puerto Rico.

Schumer said the package would likely include more Ukraine funding, which has bipartisan support. So does disaster relief, but Republicans have balked at additional funding for the pandemic.

Several matters unaddressed in the National Defense Authorization Act the Senate aims to clear this week, from Boeing’s 737 Max certification deadline to banks’ dealings with cannabis companies, could be candidates for omnibus add-ons.

A year-end tax package is also under discussion, and lawmakers need to deal with massive automatic cuts to programs like Medicare and farm price supports early next year.

Shelby cautioned against too many ride-alongs, however. “The train moves faster if it’s not overloaded,” he said.

Paul M. Krawzak and David Lerman contributed to this report.

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