The Omnibus Is Here
Josh Huder | May 8, 2017
House and Senate leaders pushed through an omnibus spending package last 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, and 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 CR for President Trump to put his imprint on it.
That was a dramatic mistake for a couple of reasons. First, defense and nondefense numbers were already written in law because of 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. In other words, any appropriations changes would have to have been been playing 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. That is 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 health care 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, which is a bad assumption. There is 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. You 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 2011 Budget Control Act go back into effect next year. This will cap 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 was not allowed to take effect in 2013, Republicans would be in a very strong position to fundamentally rewrite government spending. They could simply pass a new budget by majority vote and rewrite defense and nondefense budgets to numbers that they wish without Democratic input. But by allowing sequester to take effect, Republicans handcuffed future Congresses. The budget process cannot amend sequestration. 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. And if history is any indicator, it will push back negotiations all the way to the October deadline.
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