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Granger sets fiscal 2024 funding targets below debt limit deal

Regular nondefense appropriations would face deeper cuts

Rep. Kay Granger, R-Texas, leaves House Republicans’ conference meeting at the Capitol Hill Club on May 10.
Rep. Kay Granger, R-Texas, leaves House Republicans’ conference meeting at the Capitol Hill Club on May 10. (Bill Clark/CQ Roll Call)

With House GOP leaders under pressure from hard-right lawmakers, Republican appropriators in that chamber will write their fiscal 2024 spending bills to meet the tight budget caps that Freedom Caucus and other spending hawks have sought since January.

The subcommittee allocations that Appropriations Chairwoman Kay Granger, R-Texas, rolled out to Republican panel members at a Monday evening meeting would, on paper, cut funding levels enacted last December back to what was appropriated for fiscal 2022. That’s what conservatives have been demanding since a group of holdouts initially blocked Speaker Kevin McCarthy from winning the gavel.

The new “302(b)” allocations reviewed by CQ Roll Call total $1.471 trillion, or $119 billion less than the spending caps outlined in the debt ceiling package negotiated by McCarthy and President Joe Biden and $131 billion less than the current fiscal year. McCarthy and other top Republicans in recent days have been describing the debt deal’s caps as a ceiling, not a floor.

All of those reductions would be on the nondefense side of the ledger, as military and security-related spending would meet the law’s $886 billion cap under Granger’s plan.

Regular nondefense appropriations would face deeper cuts — $159 billion below fiscal 2023 — to make up for the increases to the Pentagon and related accounts. And within nondefense totals, veterans and border security funds would receive slight increases, concentrating the pain on other domestic and foreign aid programs.

But there’s a catch: Granger is committed to clawing back more than $115 billion from previously enacted but still unspent funds to be used as offsets, bringing actual spending levels back much closer to the $1.59 trillion ceiling written into the debt ceiling law.

In a statement, Granger cited more than $3 trillion in new spending approved during the 117th Congress, when Democrats controlled both chambers and the White House.

“Because of years of out-of-control spending, it has been and will continue to be my priority to pass conservative bills that focus our limited resources on the core responsibilities of the federal government, including national defense, our veterans, and our border,” Granger said.

Where all of that $115 billion will go hasn’t yet been specified. But sources familiar with the planning say it is likely to come from the IRS, EPA, Agriculture Department and other agencies that got hefty increases in the last Congress, which in turn would allow fiscal 2024 additions to bills above their base allocations.

Total funding in the dozen bills, before offsets, would still be roughly equal to the $1.586 trillion limit contained in the automatic sequester mechanism in the debt limit law, an enforcement tool to ensure lawmakers complete the annual spending bills. That figure is 1 percent below a continuing resolution at fiscal 2023 levels.

The base subcommittee allocations do not include $25 billion in special cap adjustments allowed in the bills for purposes like disaster relief, or extra funding paid for by rescissions and other offsets.

Markup plans

The first full committee markup, of the Military-Construction bill, is scheduled for 10 a.m. Tuesday, and the 302(b) allocations are set to be considered after the Wednesday full committee markup of the Agriculture bill. The committee also plans to hold subcommittee markups for the Defense and Energy-Water bills on Thursday, sources familiar with the schedule say.

The new allocations will likely satisfy members of the House Freedom Caucus, who say McCarthy promised to write the appropriations bills at that level during his bid for the speakership. Leaving a meeting in McCarthy’s office Monday night, Rep. Ralph Norman, R-S.C., said conservative holdouts agreed to lift their blockade on unrelated floor action for now, though they were still working out how to handle spending bills.

However, the levels may be harder for moderate Republicans to support, though moderates did back aggressive spending cuts in the House Republicans’ initial debt limit bill while arguing that the measure was a negotiating position and wouldn’t ultimately become law. Similarly, the House spending bills will serve as a starting point for talks with the Senate Appropriations panel, which is expected to write very different and larger bills.

As Republican appropriators have promised, the Defense, Military Construction-VA and Homeland Security bills were spared from cuts. The Defense measure, which makes up most of the broader defense budget category would be funded at $826.5 billion, the level laid out in the debt limit deal and Biden’s request, a 3.6 percent and nearly $29 billion boost over the current fiscal year.

The Military Construction-VA measure will feature $155.7 billion in discretionary spending, a 1 percent increase over last year’s level. That is $15 billion less than it was when it was marked up in subcommittee last month, as part of the debt limit deal is classifying that spending as mandatory under last year’s toxic exposure benefits law. Democrats consider keeping that funding mandatory as a key victory in the debt limit talks, as it frees up more room for other nondefense spending.

The bills that are facing the largest percentage cuts include the Financial Services measure, which will experience an extraordinary 59 percent cut in its allocation below this year’s levels. Much of that will likely be negated by clawbacks of IRS enforcement funds, however, as well as extra General Services Administration funding appropriated in the last Congress.

Other bills with cuts of 25 percent or greater in their allocations are the Agriculture, Commerce-Justice-Science, Interior-Environment, Labor-HHS-Education, State-Foreign Operations and Transportation-HUD measures. In dollar terms, Labor-HHS-Education — the largest nondefense bill — would take the biggest hit, at more than $60 billion from its current-year allocation.

However, the clawbacks from major pieces of legislation enacted in the previous Congress, including the pandemic aid measure, the Democrats’ climate, tax and health care legislation and even the bipartisan infrastructure law, will lessen the severity of the cuts, Agriculture Appropriations Chairman Andy Harris, R-Md., said last week.

“There are a lot of dollars that can come back, that can help backfill that … allocation, which keeps us funding government, maybe not at [last year’s] level, but pretty close,” he said.

“We’re going to take a lot of Democrat overspending over the last two years, especially, to claw that back,” he said. “And to me, that’s a different way of thinking. That’s not the normal way we think about appropriations.”

Moving forward

House appropriators reported four bills out of subcommittee in May, but Granger announced that markups were on hold due to the debt limit negotiations. However, Steve Womack, R-Ark., chairman of the Financial Services subcommittee, acknowledged that Republicans were also having trouble getting the votes needed to advance their bills.

After the debt limit deal, House appropriators had been grappling with where to write the appropriations bills to — the caps laid out in the debt limit measure, the much lower fiscal 2022 levels or something in between.

Senate appropriators are expected to write to the caps in the debt limit measure – ranking member Susan Collins, R-Maine, said last week that she was surprised that McCarthy was considering writing under the caps.

While House moderates had been signaling that appropriators could write the bills to the caps, members of the Freedom Caucus have been steadfast on the fiscal 2022 level.

“They weren’t requirements of a minimal spending level, they were indeed caps,” Michael Cloud, R-Texas, a member of the House Freedom Caucus and an appropriator, said last week. “It meant you can’t spend more than that. It would be a great time for Republicans to walk the walk, and not just talk the talk.”

The chances of the Freedom Caucus attempting to defeat the bills in committee has apparently lessened following Granger’s decision to still write the bills to the fiscal 2022 level. Harris, who signaled support for Granger in a Monday statement, is expected to back the bills.

Harris said that Granger “has been accommodating to all members of the House conference, including the House Freedom Caucus, as we work together to both rein in wasteful Washington spending and return spending levels, except for Defense, Homeland Security, and the VA, to pre-Covid levels.”

However, members of the Freedom Caucus will likely pursue amendments both in committee and on the floor, and Republicans may face issues on the floor with both moderates and conservatives with only a few votes to spare with the party’s slim majority. Democratic support is unlikely for most of the bills, especially those facing cuts.

For example, Rep. Marjorie Taylor Greene, R-Ga., tweeted Monday that she was going to write an appropriations rider to defund special counsel Jack Smith’s office, which conducted the investigation into former President Donald Trump’s handling of classified documents.

“I will not vote for ANY appropriations bill to fund the weaponization of government,” she said. “I hope every one of my Republican colleagues will join me.”

John T. Bennett contributed to this report.

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