Congressional leadership and White House officials were unable to strike a spending deal Wednesday after their first meeting on the topic of 2018.
Speaker Paul D. Ryan hosted the meeting in his Capitol office with Senate Majority Leader Mitch McConnell, Senate Minority Leader Charles E. Schumer, House Minority Leader Nancy Pelosi, Office of Management and Budget Director Mick Mulvaney and White House Legislative Affairs Director Marc Short.
Democrats headed into the meeting pushing for equal increases in defense and nondefense spending, while Republicans continued to pan that approach. The pressure is on, because the 2011 Budget Control Act calls for sequestration, or across-the-board cuts, absent a deal to change that. The sequestration caps for fiscal 2018 are $549 billion for defense and $516 billion for nondefense.
The 2011 law and subsequent amendments, including, most recently, in 2015, would cut base defense budget authority — not counting Overseas Contingency Operations funds for troops serving in conflict zones — by $54 billion below pre-sequestration spending caps for fiscal 2018. That is equal to about a 9 percent reduction from the defense cap that would otherwise exist if sequestration were completely waived. By contrast, nondefense funds face a $37 billion cut, or about 6.7 percent.
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Lawmakers routinely top up the base defense budget with OCO funding that does not count toward the caps. On the other hand, the ability to impose limitations on certain mandatory spending programs and bank the savings for discretionary programs annually adds billions of dollars to the nondefense side of the ledger.
According to the Congressional Budget Office, President Donald Trump’s fiscal 2018 budget request includes about $20 billion in proposed changes in mandatory spending, or CHIMPs, intended to offset additional nondefense discretionary spending.
Trump is seeking a two-year deal on raising the budget caps, White House Press Secretary Sarah Huckabee Sanders said Tuesday. Such a deal would likely make the appropriations process for fiscal 2019 run more smoothly.
During opening remarks from the Senate floor earlier Wednesday, McConnell said any budget agreement must provide sufficient resources to the armed forces. He criticized Democrats’ demands for equal nondefense spending increases as “an arbitrary political formula that bears no relationship to actual need.”
Schumer followed the Kentucky Republicans’ remarks by citing priorities Democrats planned to push in the negotiations, including funding for the Children’s Health Insurance Program, community health centers, disaster aid and opioid addiction prevention.
The New York Democrat also mentioned ongoing negotiations about how to replace the Deferred Action for Childhood Arrivals program that shelters young undocumented immigrants known as Dreamers from deportation.
Democrats are “ready to negotiate a reasonable package of border security to pass alongside DACA,” Schumer said. “If our Republican colleagues and the president engage in good faith in that negotiation without unreasonable demands, like an absurdly expensive, ineffective border wall that publicly many Republicans oppose, and privately many more do, I don’t doubt we can reach an agreement on DACA that’s acceptable to both sides.”
There were other shoots of optimism too.
“Hope so,” Pelosi told reporters when asked after the budget cap meeting if leaders were closer to a deal.
When asked if another short-term continuing resolution would be needed, Pelosi said the opposite: “I certainly hope not.”
The California Democrat did not respond to a question about whether Republicans offered them parity on the budget caps. On whether Democrats push for a DACA fix, Pelosi said, “Always.”
“We had a positive and productive meeting and all parties have agreed to continue discussing a path forward to quickly resolve all of the issues ahead of us,” Pelosi and Schumer said in a statement released after the meeting.
Ryan, McConnell and the White House issued a joint statement of their own describing the meeting as a sharing of priorities and reiterating the earlier White House position that there should be a two-year deal.
“The American people deserve a government that funds our great military, protects our borders, and leads to a more prosperous future for all. It is important that we achieve a two-year agreement that funds our troops and provides for our national security and other critical functions of the Federal government,” they said. “It also remains important that members of Congress do not hold funding for our troops hostage for immigration policy. We’ve been clear about these budget priorities from the beginning and hope that further discussions will lead to an agreement soon.”
Jennifer Shutt, Jacob Holzman and Ryan McCrimmon contributed to this report.