The House is on the verge of approving a massive, $790 billion spending bill for defense, military construction and veterans’ programs that is $72 billion above the legal caps imposed by the 2011 Budget Control Act.
That means House Speaker Paul Ryan (R-WI), House Appropriations Committee chair Rodney Frelinghuysen (R-NJ), and other GOP leaders are risking triggering automatic across-the-board spending cuts at the Pentagon, Department of Veterans Affairs and other agencies equivalent to the $72 billion breach of the defense spending cap.
The final vote on the fiscal 2018 measure is scheduled for late Wednesday evening, and there seems little likelihood Republican leaders will have second thoughts and scale back the so-called “mini-bus” of defense related spending, which calls for a greater military buildup than even President Trump had requested.
“The highest priority of Congress is to ensure the safety and security of our nation and to guarantee the future of our great democracy - this critical national security legislation needs to head to the floor,” Frelinghuysen said in a recent statement, without broaching the subject of the caps.
But House Republicans are playing a high stakes game that could lead this to another fiscal train wreck this fall, including a partial government shutdown and a first-ever default on U.S. debt.
Treasury Secretary Steven Mnuchin has pressed for swift Congressional action before the August recess to raise the nearly $20 trillion debt ceiling to prevent it from getting caught up in last minute political horse trading this fall. It’s more likely, however, that the debt ceiling will end up as a bargaining chip used by both sides as the new fiscal year approaches, some budget experts say.
Republicans are taking up the “Make America Secure Appropriations Act” today without the House and Senate GOP leadership agreeing on a budget blueprint for the coming year and without sounding out Democrats on a bipartisan agreement that would allow Congress to raise the cap on domestic programs as well as defense.
As things now stand, the Budget Control Act would limit base defense spending in the coming fiscal year to $549 billion, which doesn’t count the $23 billion or so that would go for the war effort in the Middle East. That is far below the $621.5 billion in base defense spending contained in the House annual defense policy bill adopted July 14 and the $632 billion favored by the Senate Armed Services Committee.
Democrats warned that without an agreement on suspending the caps, the Pentagon, and other agencies would be hit with a 13.2 percent sequestration – or automatic across the board cuts -- at the start of the new fiscal year Oct. 1. That potentially could result in furloughs of non-essential employees, a hiring freeze and a scaling back of other government operations.
Lawmakers repeatedly struck bipartisan agreements between fiscal 2014 and 2017 to raise the caps under the Budget Control Act. That law was designed by congressional Republicans and the Obama Administration to contain long-term spending and reduce the debt. The legislation set annual spending targets and backed them up with the threat of across the board cuts if Congress breached the limits.
Sen. Jack Reed of Rhode Island, a senior Democrat on the Senate Appropriations Committee, was overheard on a hot mic Tuesday discussing the emerging budget crisis with Republican Sen. Susan Collins of Maine. Reed, a member of the Armed Services Committee, warned in their conversation in a committee room that the Defense Department “is going to be paralyzed, everybody is going to be paralyzed” by the sequestration.
Collins, a senior Republican appropriator, agreed with Reed and complained, “I don’t think” Trump knows there is a Budget Control Act to contend with.
The new defense and VA spending package also includes $1.6 billion for the construction of 74 miles of new and secondary fencing along the southern border with Mexico – a down payment on Trump’s plan to build a security wall along much of the 2,000-mile U.S.-Mexico border to keep out illegal immigrants.
That proposal alone will meet with strong resistance from Democrats in the Senate, where Republicans will need Democratic support to achieve a 60-vote super majority to pass the spending legislation.
Rep. Adam Smith of Washington State, the ranking Democrat on the House Armed Services Committee, told Politico this week that the Republicans were painting themselves into a corner without any idea of how to extricate themselves later this year. But others see the House Republicans’ move as an opening gambit in long-term negotiations over a budget deal to keep the government operating beyond a Sept. 30 deadline.
Bill Hoagland, a senior vice president at the Bipartisan Policy Center and a former Senate Republican budget adviser, predicted that at the end of the day, Republican and Democratic lawmakers would agree to adjust the caps upward for defense and domestic spending, using debt ceiling legislation as the vehicle for the agreement.
“I would expect that the debt limit bill to be the critical bill for which negotiations would occur to get an agreement on a modification of the caps,” he said in an interview Wednesday. “That would require bipartisanship, at least in the Senate, to get 60 votes to raise those caps.”
“I think [House Republicans] are sending a signal – a shot across the bow – that they want to raise those caps,” he added. “I think this is just the beginning of a long process in terms of adjusting these caps to avoid the sequester.”