Speaker Mike Johnson is taking a hard line in negotiations over final spending levels for fiscal 2024, imperiling odds of a deal on appropriations toplines that’s needed in the next week for lawmakers to have any chance of finishing full-year bills by deadlines early next year.
Defense and security-related funding levels are largely locked in at $886.3 billion under the terms of last spring’s debt limit law and backed up by the annual defense authorization bill that’s nearing completion.
But under pressure from House Freedom Caucus-led conservatives, Johnson is seeking to hold nondefense funds below the $772.7 billion ceiling that negotiators agreed to in the debt limit law and associated “side deal” to boost spending through accounting maneuvers.
Freedom Caucus and other hard-liners don’t want to go above $703.7 billion for domestic and foreign aid funds — the amount that’s actually written into the debt limit law. That would mean 9 percent cuts on average below current levels.
What’s more, they’re pushing Johnson to account for any emergency supplemental funding for the wars in Israel, Ukraine and other purposes within the total “capped” amount of $1.59 trillion for fiscal 2024. That would mean cutting other spending by $110.5 billion if they wanted to include the entire Senate Democratic supplemental package unveiled Tuesday, for instance.
Almost no one believes the Freedom Caucus position will win out. But Johnson, R-La., is clearly trying to move in their direction, offering a figure in talks with top Democrats that’s well below their target for nondefense funding.
Even more establishment-type members of the GOP conference, like Rules Chairman Tom Cole, R-Okla., are taking the position that the topline should be $1.59 trillion without extras added.
“I’m very supportive of the [$1.59 trillion] deal, and very leery of anything that’s added on top of it, either as designated emergency spending, or side deals, or whatever,” said Cole, who’s considered an early front-runner to take over for retiring House Appropriations Chairwoman Kay Granger, R-Texas.
A spokesman for Senate Majority Leader Charles E. Schumer, D-N.Y., said diplomatically they were carefully reviewing Johnson’s proposal — a positive sign that talks haven’t blown up yet, at least.
The speaker believes he has leverage: His fallback if there’s no deal would mean a full-year continuing resolution that would lead to an across-the-board “sequester” of more than 9 percent for nondefense programs, while defense wouldn’t face any cuts below current levels.
That’s what would occur under the simple “date change” CR that Johnson is considering, according to Senate Appropriations Chair Patty Murray, D-Wash., who said in an interview such a scenario would be “devastating.”
“We would essentially be ceding our ground to our competitors around the globe on virtually everything we need to do to get our economy up and running,” she said.
For example, Murray said under a full-year CR, there would be no increase in Pell Grants for the first time in over a decade, no new funding to deal with the fentanyl crisis and no new investments in biomedical research that many members are pushing for.
‘Date change’ implications
Murray’s been using the term “date change” this week to describe what Johnson has communicated: Taking the two-tiered deadlines in the current stopgap measure, Jan. 19 and Feb. 2, and replacing them with Sept. 30.
Under a widely held interpretation of the debt limit law, a full-year CR would need to adhere to the basic defense and nondefense spending caps for fiscal 2024, or face automatic across-the-board cuts to eliminate amounts appropriated over those caps. Those cuts would trigger within 15 days of enactment of a CR that’s above the caps.
Simply extending the latest stopgap bill for the remaining months of the fiscal year would mean defense is well within the fiscal 2024 cap, since the Congressional Budget Office scored defense and related spending in the latest CR at $26.6 billion below the capped level.
But nondefense programs would be forced to take a much larger $73.3 billion hit, if no other changes were made to the CR’s provisions. That may be artificially high due to scoring of advance appropriations for the Veterans Affairs Department and Indian Health Service, but lawmakers would need to scale back funding for those popular agencies in the text to alleviate cuts to other programs.
The White House budget office would have the final say in implementing the cuts, which are prescribed by a formula enacted in the 1980s. Certain programs would be exempt or face smaller cuts, but others would face cuts in the ballpark of 9 to 10 percent.
Meanwhile, defense may be spared from cuts under this scenario, but the Pentagon and other security-related functions would suffer a big blow relative to what’s in the fiscal 2024 spending bills. The House has appropriated the full $26.6 billion boost above the previous fiscal year extended in the CR, while the Senate spending bills are $34.6 billion above the current year.
That’s gotten the attention of Senate Appropriations ranking member Susan Collins, R-Maine, who in a floor speech last week said such reductions would “simply fail to provide the resources needed to protect our nation.”
In separate remarks to reporters on Tuesday, Murray talked about the impacts of a “date change” CR.
“I will have more to say on this, but it is deeply dangerous; it would lock in outdated spending plans and devastating across-the-board cuts with no rhyme or reason and completely lock Congress out of any kind of thoughtful decision-making process for our nation’s future,” she said.
In the interview Wednesday, Murray accused Johnson of going back on the debt limit package that he voted for earlier this year.
“He wants to now go back and say, ‘Nevermind, it doesn’t matter that there was an agreement. Now we want to cut more,” Murray said. “Or, ‘If you guys don’t agree with me, then we are going to go to this date change CR.’”
Rep. Rosa DeLauro, D-Conn., the House Appropriations panel’s ranking member, said there shouldn’t even be any topline negotiations given the debt limit deal is the law of the land.
“Why are we negotiating against ourselves?” DeLauro said.
‘Working group’ meetings
The top Democratic appropriators’ comments don’t suggest a deal on topline funding is close, though sources familiar with the talks say Johnson has said an agreement was possible as soon as this week.
Johnson has been holding “working group” meetings to discuss the appropriations issues with his conference, which sources described as a way to ensure rank and file members feel read-into the talks and that their input is valued.
Murray said too much time is being wasted, however, given the hard staff work needed to write compromise appropriations bills within the time frame laid out in the latest CR.
The first four bills would need to be passed by Jan. 19, with the remaining eight — including the most contentious measures like Labor-HHS-Education and Commerce-Justice-Science — due by Feb. 2.
Murray said a topline deal was needed “yesterday,” and that’s just the beginning of the process.
“Then you have got to get down to the sticky nitty-gritty details, the differences between the House and the Senate, and all the time and work that goes into it. It takes time and work,” she said. “And as you know, the hard decisions come at the end. We’ve got to get that going.”
Peter Cohn contributed to this report.