The omnibus is here! And some things to clear up about congressional budget politics.
House and Senate leaders will push through an omnibus spending package this week. The bill combines 11 appropriations bills for the final months of the FY2017 calendar. Democrats walked away with some big wins in the omnibus. They struck over 100 policy riders, resisted non-defense cuts proposed by President Trump, managed to block funding for President Trump’s border wall, among other items.
However, their leverage in the budget process is being badly misunderstood. Many pundits are suggesting that fractured Republican politics are giving Democrats leverage. And while that certainly helps, it underestimates the institutional features in place that will bias budgets in favor of the minority party no matter which party is occupying it. In other words, it’s not just fractured Republican politics. It’s also existing law. So let’s look at the omnibus and how it shapes up, examine why Democrats were successful, and explain the state of play for FY2018.
The omnibus spending bill is the culmination of the 2015 Bipartisan Budget Act (BBA), negotiated by then-Speaker Boehner, Majority Leader McConnell, and then-President Barack Obama. In other words, the $1.07t funding level was negotiated more than 2 years ago. Democratic finger prints are all over this budget. To some degree the omnibus is not necessarily an example of Republican weakness. Rather, it’s an example of the fact that this deal was written 2 years ago when Democrats controlled the White House. The only reason we’re still talking about it is because after the November election, Republicans decided to put in a stopgap continuing resolution (CR) to allow President Trump to put his imprint on the budget.
That was a dramatic mistake for a couple of reasons. First, defense and nondefense numbers were already written in law by the 2015 BBA. So whatever imprint President Trump and the 115th Congress wanted to make on FY2017, they had to do it within the existing framework negotiated by the 114th Republican majorities and President Obama. If Republicans wrote a bill that broke those caps, it would trigger another round of automatic cuts. Any appropriations changes would at best play around at the margins because defense and nondefense numbers for this fiscal year are already set in law. You would need to write a new law to change them, a lift that would have required an enormous amount of political capital which simply doesn’t exist when Congress is also trying to rewrite the most substantial healthcare policy in a generation.
This limited the majority’s ability to reshape funding for new things. If they wanted to cut agencies’ funding to make room for other priorities, they’d have to do it through the 2015 BBA defense and nondefense partition. In other words, to make room for a border wall, they would have had to find it in the nondefense section of the budget. But making room for priorities even within the nondefense segment of the budget is very difficult.
This brings us the second problem Republicans faced for FY2017: all appropriations bills still go through a filibuster in the Senate. If they wanted to cut EPA, NIH, State, and other agency budgets to make room for a border wall, Republicans would certainly face a Democratic filibuster. This assumes that all Republicans would support deep cuts to other nondefense agencies, an assumption that ignores the strong bipartisan support for many agencies on the nondefense side. Simply gutting some agencies to make room for other priorities ignores the realities of appropriations politics in both parties.
All of this stems from the heart of the problem. Republicans cannot reorient government by working under old budget numbers. They need a new budget. This would normally make FY2018 a critical opportunity for Republicans to remake government in their vision. In a normal budget year, Republicans would write a new budget, boost defense spending and cut nondefense through the budget process, and then write their appropriations bills to those numbers.
The problem with this is this is not a normal budget year. The sequestration caps put in place by the 2013 Budget Control Act go back into effect next year, capping defense spending at $549b and nondefense spending at $515b. Put differently, defense and nondefense spending will get an across the board cut by $2b and $4b, respectively, if Congress doesn’t ease the BCA caps (for the third time). Republicans will have to amend sequester if they want to fundamentally restructure government spending.
The irony here is if sequester had not been allowed to take effect in 2013, Republicans would be in a very strong position to fundamentally reorder government spending. They could simply pass a new budget by majority vote and rewrite defense and nondefense budgets without Democratic input. Instead, Republicans handcuffed future Congresses by triggering sequestration. The budget process cannot amend the BCA. So Republicans will again have to change the law, which will require 60 votes in the Senate, which means Republicans will again be negotiating with Democrats in FY2018. And all of this is because they allowed sequestration to take effect in 2013.
Sequestration, a policy Democrats loathed when it went into effect, is ironically their greatest ally. It forces the new Republican majorities to rewrite the law before they can pass spending bills. That requires the support of at least eight Democrats in the Senate. Democrats’ leverage will continue to give them outsized influence in the budget and appropriations process in FY2018. As long as sequester is in place, it gives the minority party leverage in budget and appropriations.
If history is any indicator, this will push back negotiations all the way up to the October deadline where Congress will either address BCA caps and sequester head on or, more likely, negotiate another two-year deal. This week Congress will pass the easy bill. It gets much harder later this month when the FY2018 budget cycle starts.