Budget Deal Reached; Battle Over FY 2020 Appropriations Continues

As has been widely reported in the media, Congress and the White House agreed on a deal to raise the FY 2020 and 2021 budget caps and suspend the debt ceiling until July 2021. Ostensibly, this clears the way for Congress to send appropriations bills to the White House in September when the two chambers reconvene. However, there is still plenty of room for the appropriations process to go awry, especially if the White House rightly or wrongly sees political advantage in taking a stand on something like a border wall again as it did earlier this year.

Last week, the House passed the “Bipartisan Budget Act of 2019” (H.R. 3877) by a 284-189 vote with 65 Republicans voting to pass the package and 16 Democrats voting no. The Senate then took up and passed the bill today by a 67-28 vote with the five Democrats who participated in the Democratic debates not voting.

The caps as reset when the so-called Super Committee failed to deliver a package of $1.2. trillion in funding cuts:

	FY 2020	FY 2021
Defense (aka Security)	$576 billion	$590 billion
Non-Defense (aka non-security)	$542 billion	$555 billion

Under the “Bipartisan Budget Act of 2019” the new caps would be:

	FY 2020	FY 2021
Defense (aka Security)	$666.5 billion	$671.5 billion
Non-Defense (aka non-security)	$621.5 billion	$626.5 billion

And, here is the difference between the original and the new caps:

	FY 2020	FY 2021
Defense (aka Security)	+$90.5 billion	+$81.5 billion
Non-Defense (aka non-security)	+$79.5 billion	+$71.5 billion

There’s plenty here for both sides to claim victory. Congressional Republicans get a higher defense top-line, an agreement that allows appropriations to move forward, support from the President, a relatively painless debt limit increase, and no parity for defense and non-defense funding. Congressional Democrats got substantial increases for non-defense funding whereas the President’s DOA FY 2020 budget request would have slashed non-defense funding, a relatively painless debt limit increase, and buy-in from the White House and President, which brought along Republicans terrified of there being any daylight between them and Trump (e.g. Senate Majority Leader McConnell (R-KY)).

However, now that the spending caps and debt limit hurdles have been cleared, it is uncertain at best whether appropriations will be enacted by the beginning of FY 2020 (i.e. October 1). While the House has passed 10 of the 12 bills, the Senate Appropriations Committee has not even set its 302(b) allocations let alone mark up actual bills. However, I’m doubtful the committee has been idle; it wouldn’t shock me if they’re able to move bills very quickly to the floor. Beyond that, it’s not clear how well that works. I think a continuing resolution (CR) funding some portion of the government may be likely into the latter part of the year. Of course, even if Congress reaches agreement with sign-off from the White House, a Fox segment on such a deal could blow it up once Trump decides there’s advantage to be had in holding everything up in the name of what he and his base consider security on the U.S.-Mexico border.

Another bigger picture question is whether the Democrats will agree to caps on discretionary spending going forward once this deal expires. It is likely the current battle lines that informed this and past budget deals will extend into future talks. The only variable will be the fortifications and arms available to each party in each chamber. However, the leverage granted by the “Budget Control Act of 2011” (BCA) (P.L. 112-25) will be gone. It should be interesting to see what happens in calendar year 2020.