It’s Not Over
Kenneth Gold | November 2, 2015
Many of the news stories that covered last week’s passage of the two-year, 2015 Bipartisan Budget Act had headlines similar to the Associated Press story titled “No shutdown, no default: Congress leaders, Obama back deal”. And while the agreement is an enormous and widely unexpected accomplishment that does prevent the country from going into default, it doesn’t in itself fund the government past December 11.
The agreement that suspended the debt ceiling and lifted the caps on discretionary spending until the end of 2017 was a monumental achievement for the 114th Congress. Until the deal was unveiled one week ago, the prospect of a default on the debt after November 3 was already beginning to worry the financial markets. It didn’t appear that there were enough Republican votes to support a clean raise in the debt ceiling, which the president had demanded. In addition, there was no apparent path to bridging the deep, multiple divides in Congress over defense and non-defense discretionary spending that threatened to shut down the government after the December 11 expiration of the current continuing resolution (CR).
The two-year agreement quickly passed both chambers of Congress last week, and is expected to be signed into law by the president today. The deal does suspend the debt ceiling through March 2017, and greatly reduces the chance of a government shutdown on December 12 – but its passage doesn’t guarantee that the government will be funded, and headlines that touted “shutdown averted” are at best misleading.
What the deal does on federal spending is raise the discretionary caps set in place by the 2011 Budget Control Act (BCA) by roughly $80 billion over two years, and suspends the debt ceiling until March 2017. The BCA was itself passed as a condition for Congress lifting the debt ceiling in 2011, in the wake of the massive 2009 and 2010 deficits. Make no mistake, this is a major accomplishment. The vast majority of congressional Republicans wanted to cut, or at least freeze most non-defense discretionary spending, and were themselves divided between defense hawks who wanted to increase defense spending, and fiscal hawks who wanted to cut or freeze all spending. Most congressional Democrats and the President supported increased defense spending, but opposed using Overseas Contingency Operations (OCO) funds to do so, and wanted to increase non-defense spending on par with defense.
Those fundamental differences on discretionary spending seemed nearly insurmountable only a week ago, and if left unresolved may well have led to a government shutdown in December. Just a few days before the budget deal, a group of more than 100 House Republicans signed a letter pledging to vote against any FY16 appropriations measure that didn’t provide for a minimum of $561 billion in defense spending, an amount that exceeds the budget cap by $38 billion. It’s worth noting that $561 billion was also the president’s proposed base defense number, and is the level that former Joint Chiefs of Staff Chairman Martin Dempsey has termed the “lower ragged edge” for defense spending.
The group includes hardline conservatives as well as a sizeable number of mainstream Republicans. It is a considerably larger bloc than the 40 or so members of the Freedom Caucus, and includes most Republican members of the House Armed Services Committee and the Defense Appropriations Subcommittee. Given the fact that almost all Democrats opposed any spending bill that failed to increase non-defense spending, which in any event the president had pledged to veto; and assuming the signers were serious, their position would have precluded any spending agreement in the absence of a broader pact. My point here is that the two-year agreement is a big deal.
Nonetheless, the budget agreement doesn’t appropriate a single dollar in itself, and the current CR is still set to expire on December 11. The budget deal sets new, higher limits on discretionary spending, but it’s not an appropriations vehicle. The appropriations chairs still need to divide up the new spending limits among the 12 appropriations subcommittees in each of the chambers (the 302(b) allocations), which still need to write bills that provide funding levels to the various departments and agencies and programs, even if they’ll likely be combined in an omnibus.
In addition to differences in funding priorities for individual department and agencies and for specific programs, it’s highly likely that some members, especially those who opposed passage of the bill, will attempt to attach policy riders to the bills that could derail passage. In the House, only 79 out of 247 Republicans voted to support the bill. In the Senate, just 18 Republicans voted for passage, while 35 Republicans voted against, including presidential candidates Ted Cruz and Marco Rubio (make sure to tell Jeb that he voted).
The policy priorities that prevented the passage of six of the 12 individual appropriations bills in the House this year haven’t disappeared because of the agreement. Just prior to the August recess, two House appropriations bills were derailed because of an attempt to include a confederate flag amendment on one. Very conservative Republicans in particular are unhappy with the agreement and will likely try to include provisions to undo parts of the Affordable Care Act, to oppose implementation of certain Environmental Protection Agency rules, to undo the president’s executive order on immigration, and of course to defund Planned Parenthood.
With only six weeks to draft and pass an omnibus, opposing sides began to line up before the agreement had even been sent to the president. Democrats pledged to stick together to oppose any unwelcome policy riders to the bill, while some Republicans were already stating that they fully intended to exercise their prerogatives in the appropriation process. Appropriations Committee Chairman Harold Rogers conceded that there was no agreement in the deal regarding policy riders.
I remain optimistic that they’ll get a bill, and that the president will sign it before December 11. I’m also willing to bet that it won’t be much before the shutdown deadline, and that the process won’t be a smooth one.