Inside (the Beltway) Scoop

By | June 8, 2017

Members of Congress returned to Capitol Hill following the Memorial Day recess knowing that they have much to accomplish and little time to get it all done. Until the long summer break begins on July 31, legislators are expected to concentrate on finalizing the repeal and possible replacement of the Affordable Care Act, significant changes to the tax code, and legislation to make major investments in improving the nation’s infrastructure. Work will also likely continue on the fiscal year (FY) 2018 budget and spending bills that are supposed to be completed by September 30.

Recognizing that passing all 12 of the appropriations measures by the end of September will be impossible given time constraints, conversations are focusing on what could be done this summer to ensure the continuity of funding for government agencies this fall. At a private meeting of the House Republican conference the week of May 22, Tom Graves (R-GA), chairman of the House Financial Services Appropriations Subcommittee presented a plan to develop an FY 2018 omnibus bill. His goal is to bring it to the House floor for a vote at the end of July. The omnibus would consist of individual spending bills written and passed by the relevant subcommittees and the full House Appropriations Committee over the next two months. Chairman Graves described the package as one that “identifies our priorities and aligns along with the president’s priorities.” He added that his Republican colleagues on the Appropriations Committee “were willing to work weekends if necessary to get it done and provide a responsible, conservative, Republican spending bill to the floor prior to the August recess.”

It is unclear at this point whether the House will move forward with the plan presented by Graves.  House Appropriations Committee Chairman Rodney Frelinghuysen (R-NJ) has not yet publicly commented on the proposal, nor has Speaker Paul Ryan (R-WI). House Labor, Health and Human Services Subcommittee Chairman Tom Cole (R-OK) said Graves’ idea had merit but reminded his colleagues that it would take 60 votes to get an omnibus passed in the Senate. Cole said, “Let’s not get away from a fundamental reality: at the end of the day, we will sit down with the Democrats because this process has to be bipartisan as long as the Senate has the rule of 60.”

A further signal that the Senate may follow a different path on the spending bills came from Appropriations Committee ranking Democrat Patrick Leahy (D-VT). He said that he had “only the vaguest of discussions” with his Republican counterparts before Memorial Day. Leahy said he intends to initiate bipartisan discussions on the FY 2018 spending bills this week. He noted that major decisions cannot be made until appropriators get a better sense of the overall target for discretionary spending. The FY 2018 budget cap in current law is nearly $5 billion below the 2017 level. House and Senate leaders have not made any serious attempts to reach an agreement to revise that limit.

In addition to resolving broad questions about FY 2018 spending priorities, lawmakers also must deal with another fiscal issue this summer. Treasury Secretary Steven Mnuchin recently notified Congress that the debt ceiling will probably have to be raised sooner than expected. The debt ceiling was reached in mid-March but the Treasury Department has used a series of accounting techniques known as “extraordinary measures” to ensure that spending stays below the current statutory limit. Mnuchin noted that tax receipts are coming in slower than expected and hinted that the debt ceiling may have to be raised earlier than the previous estimate of October or November. “I think it’s absolutely important that this is passed before the August recess and the sooner the better,” he said.

The last time Congress and the White House had a substantive conversation about the debt ceiling, Republicans demanded spending cuts to increase the debt limit. It is possible that Congress may again use the debt ceiling vote to force a discussion about broad spending cuts. Office of Management and Budget Director Mick Mulvaney mentioned this idea during his Senate confirmation hearing. The House Freedom Caucus released a statement warning that its members will demand that any increase in the debt limit be accompanied by “meaningful spending cuts to address our debt.” The two most recent votes to “suspend” (rather than raise) the debt ceiling passed with significant help from House and Senate Democrats. If Congress attempts to negotiate a deal on raising the debt ceiling this summer, Democrats will once again play a critical role in the conversations. Their votes will likely be needed to get a plan through the House and will absolutely be critical in the Senate.