No surprise: Congress misses April 15 budget outline deadline

The first year of a divided Congress got off to an inauspicious start on the federal budget, as the House and Senate both failed to approve a budget framework for 2020 before going home for a two week Easter break, continuing a less than stellar bipartisan record of action on spending and deficits on Capitol Hill in recent years.

"Last year was a historically bad year for the Congressional budget process," said the Committee for a Responsible Federal Budget, noting it was the first time since 1976 that neither the House nor the Senate voted on a budget resolution.

"Unfortunately, this only adds to a poor budget record," the group added.

One important point before we get too deep into Legislative Nerd Territory - the term 'budget' does not relate to actual spending, but rather to what's known as the 'budget resolution,' which is a budget outline - a framework - for what Congress will do later in the year, filling in the blanks with the specifics of spending choices.

As the CFRB notes, this year is not getting off to a good start on the budget, which is even more troublesome given the divided nature of Congress, with Democrats in charge of the House, and Republicans leading the Senate.

And the forecast is for a difficult budget year - which many believe might end up in another government shutdown in October, and a possible across-the-board sequester soon after.

Here's just some of what gone on, and what to look for on Capitol Hill.

1. Divided House Democrats punt on 2020 budget. Just like Republicans in the House struggled for years to balance the interests of more conservative members of the Freedom Caucus and more moderate GOP lawmakers, Democrats have the same balancing act. More liberal members want to do big things in the budget. More moderate 'Blue Dog' Democrats want a more middle ground on spending. And so, Democrats had to give up plans last week to vote on a bill to raise the caps on federal spending for the next two years by nearly $350 billion. Progressives didn't like it because it spent too much on defense, at $733 billion. Meanwhile, some more moderate Democrats were talking about a balanced budget amendment to the Constitution. The internal Democratic Party dustup was music to ears of Republicans, who chortled about the Democrats running into the Legislative Ditch.

2. Senate Republicans didn't vote on their budget outline either. While Republicans chuckled at the failure of Democrats to force a vote on their budget plan for 2020, GOP Senators didn't even try to act on their budget resolution before the April 15 deadline. The Senate GOP budget resolution would reduce future planned spending increases by over a half billion dollars, but it wouldn't come close to the defense spending levels backed by President Trump - who wants $750 billion for defense. House Democrats have proposed $733 billion, while the Senate Republican budget would have funding for the military set at $643 billion, well below the President's request. And so, for a second straight year, there was no budget vote-a-rama in the Senate on the non-binding budget resolution.

3. The Defense Budget Gimmick used by both parties. With budget caps in place that limit how much you can spend on the military and non-defense items in the budget, Congress is still doing its best to get around those limits, especially for the military, by using an extra fund known as OCO - which stands for Overseas Contingency Operations. For example, President Trump's 2020 budget would put $174 billion in the OCO fund - more money than almost all other federal agencies - in order to get to a $750 billion budget for the Pentagon. Democrats have $69 billion in OCO, with Senate Republicans at $67 billion. If there's no deal on raising the budget caps, then the most money which could be spent on the Pentagon is $576 billion - unless, you get around that with the OCO $174 billion. "OCO would be the 2nd largest federal agency, if it was an agency," grumbled the group Taxpayers for Common Sense, as many say it's nothing but a slush fund.


4. McConnell, Pelosi want to negotiate a new budget deal. Even as Democrats were running aground on their effort to pass a bill which increases the spending caps, Senate Majority Leader Mitch McConnell agreed with Speaker of the House Nancy Pelosi to start talks on a budget agreement, as both parties know full well they need to get going now in order to have any chance of an across-the-board budget cut known as the sequester. If you look at graphic just above this bullet point, you will see the figure of $576 billion for the Pentagon, and $542 billion for non-defense spending - those are the "spending caps" set in law by a 2011 bipartisan budget deal. Current funding is much more than that, at $716 billion for the Pentagon and $605 billion for non-defense spending. The last three deals on the budget caps have raised the amount of spending each time - and the President may not go for that this time around.

5. Looming over all of this is a sequester. The reason lawmakers want to reach a 'spending caps' agreement is that the Budget Act of 2011 is still on the books, and if there is no agreement on the amount of money to spend in 2020, then an across-the-board budget cut known as the 'sequester' will kick in. And that would be a very big deal. If a sequester hits, the military budget would technically have go down from $716 billion to $576 billion - a cut of $140 billion. If the sequester kicks in, domestic spending would be trimmed from $605 billion to $542 billion. Ironically, because of the big increase that the GOP Congress was able to give to the Pentagon in 2017 and 2018, a sequester would hurt the military more than non-defense spending in 2020 and beyond. This is where the OCO funding (look above) comes into play - President Trump could allow the sequester to kick in, but still funnel more money to the Pentagon through that extra fund. One problem with that game plan is the GOP probably would not have 60 votes in the Senate to get that done. This may get pretty messy in the months ahead.

About the Author