White House, Hill leaders agree on two-year budget deal

‘This was a real compromise in order to give another big victory to our Great Military and Vets!’ Trump tweeted

President Donald Trump alongside Senate Majority Leader Mitch McConnell, R-Ky., left, and Sen. Roy Blunt, R-Mo., talks to the media about Robert Mueller’s report upon arriving for the Senate Republican Policy luncheon in the Capitol on March 26, 2019. Trump tweeted Monday he and both Senate and House leaders had agreed on a budget deal. (Tom Williams/CQ Roll Call)

House leaders released legislation late Monday that would implement the two-year accord on appropriations and the debt ceiling struck earlier in the day by the White House and top Democrats and Republicans on Capitol Hill.  

The 26-page draft bill, expected to get a House vote Thursday, calls for raising limits on discretionary spending by $321 billion over two years, compared to the strict caps imposed under a 2011 deficit reduction law.

[Podcast: What we know so far about the budget, debt limit deal]

Less than a quarter of the cost of increased spending, or $77.4 billion, would be offset with an extension of fees on cargo and passengers arriving in the U.S. and automatic cuts to Medicare and other programs that are currently set to expire in 2027.

That’s down from the $150 billion in cuts sought by the White House, and those cuts aren’t the upfront savings sought by conservatives. But the entirety of the package reflects a hard-fought compromise between the parties that was necessary to stave off deep cuts in programs popular on both sides of the aisle, while taking the risk of U.S. default off the table until after next year’s elections.

In the fiscal year that begins Oct. 1., funding across all federal agencies would get a nearly 4 percent boost over this year’s enacted level, instead of the 10 percent cut required under the 2011 law. 

“Today, a bipartisan agreement has been reached that will enhance our national security and invest in middle class priorities that advance the health, financial security and well-being of the American people,“ Speaker Nancy Pelosi, of California, and Senate Minority Leader Charles E. Schumer, of New York, said in a statement. 

President Donald Trump tweeted his approval of the agreement. “This was a real compromise in order to give another big victory to our Great Military and Vets!” Senate Majority Leader Mitch McConnell, of Kentucky, and House Minority Leader Kevin McCarthy, of California, later issued their own statements endorsing the package.

Congressional leaders have pledged to move quickly to get the deal passed before they adjourn for the August recess. Pelosi and Schumer said Monday evening that the House would swiftly move the agreement legislation to the floor.

Pelosi has said she would like a floor vote in her chamber by Thursday, the day before the House is scheduled to leave town. That would also give enough time to send it to the Senate, which is scheduled to adjourn by Aug. 2.

Treasury Secretary Steven Mnuchin had warned his agency was in danger of exhausting its borrowing capacity by early September unless the debt limit is raised by then.

After expressing some initial reservations Monday, the top Democrat on the Senate Appropriations Committee, Patrick J. Leahy, later said he would back the deal despite his initial hesitation. The Vermont senator he would have preferred higher veterans health care funding and restrictions on the president’s use of appropriations for border security.

House Appropriations Chairwoman Nita M. Lowey, a New York Democrat, announced her support for the package in a statement Monday. She said it “ends the senseless austerity” imposed by the 2011 deficit reduction law, which was also driven by the need to raise the debt ceiling.

First cuts aren’t the deepest

Without a deal to raise spending caps, discretionary programs would have to be cut by 10 percent, or $125 billion, in the fiscal year that begins Oct. 1., compared to this year’s enacted level. But conservatives may resist a deal that deepens the government’s mounting deficits.

To offset the costs, the White House had offered Democrats a menu of $574 billion worth of proposed budget cuts to consider, along with a proposal to extend the discretionary spending caps under the 2011 law by another two years, through fiscal 2023, to save an additional $516 billion.

But virtually all of those proposals have been rejected. Instead, the deal provides only $77.4 billion in offsets — and a good portion of those savings wouldn’t materialize for about nine years. 

In the coming fiscal year, the deal would provide $738 billion for defense spending. That amount is slightly higher than the $733 billion sought by House Democrats but short of the Trump administration’s $750 billion request, which includes money for overseas operations that are exempt from spending limits.

The $738 billion amounts to an increase of 3.1 percent, or $22 billion, over this year’s enacted level. That includes $71.5 billion with a cap-exempt Overseas Contingency Operations designation.

Nondefense funding, including an extra $2.5 billion for one-time costs associated with the 2020 census and $8 billion for State Department operations in the OCO category, would total $632 billion in fiscal 2020. While that is $15 billion less than House Democrats initially sought, it still represents a substantial boost of nearly 4.5 percent above the comparable fiscal 2019 numbers.

Funding levels for fiscal 2021, the final year governed by tight budget limits under the 2011 deficit reduction law, would be $740.5 billion for defense accounts, including $69 billion in cap-exempt funding for overseas operations, and $634.5 billion for nondefense, including $8 billion from the overseas operations account.

The language on Overseas Contingency Operations funding changed a bit from a draft being shopped around earlier in the day. That section of the bill now refers to the OCO figures for defense and nondefense categories as simply an "adjustment" from the caps, rather than a "limit" that can't be exceeded. 

No policy riders

While not enshrined in the bill's text, the agreement also includes language that the 12 annual spending bills won’t include any policy riders or changes to transfer authority, such as the administration's ability to move money to Trump's border wall project, unless there is bipartisan agreement on those issues.

A Democratic aide noted that because there is a Democratic House and a Republican Senate, all of the spending bills will need to be bipartisan before they could become law.

“In divided government, every bill needs bipartisan support. Language saying provisions in appropriations bills require bipartisan agreement is meaningless verbiage designed to make the obvious seem profound,” the aide said.

The deal summary released by congressional leaders also calls for senators to "work together to minimize procedural delays" in processing the dozen fiscal 2020 spending bills, which haven't gotten off the ground yet in that chamber because of the lengthy spending stalemate.

The document also pledges "orderly and timely consideration" of next year's as well as the fiscal 2021 spending bills to avoid government shutdowns and 12-bill omnibus packages. The text suggests lawmakers will still try to pass the appropriations bills in smaller bunches, similar to the fiscal 2019 process, rather than package them all together in one bundle at the end of the year.

The measure doesn't contain any extraneous policy provisions such as the voluminous health care package or suite of tax "extenders" that rode along with the 2018 budget deal. Those items will need to move on their own separate tracks. 

The new legislation would, however, wipe clean the pay-as-you-go "scorecard" that otherwise would trim at least $3.2 billion from mandatory spending, which doesn't require appropriations, in fiscal 2020. The 2010 law that established a different sort of automatic cuts, imposed if laws enacted in a congressional session increase deficits, has consistently been waived by lawmakers since its enactment.

Niels Lesniewski, Kellie Mejdrich, Andrew Siddons and Doug Sword contributed to this report.Get breaking news alerts and more from Roll Call on your iPhone.