Congress Struggles with FY 2018 Spending Deal
The federal government has been funded by short-term deals since September 30 last year. Congress must reach another deal by Thursday, February 8, to keep the government’s doors open. With a handful of policy issues on which both Republicans and Democrats seem reluctant to budge, the next steps for a long-term fiscal year (FY) 2018 funding solution remain unclear.
Congress has struggled to resolve the government funding situation due to a number of underlying budget issues as well competing partisan priorities. Federal spending caps imposed by the 2011 Budget Control Act and a rising federal deficit have complicated negotiations, and could easily lead Congress to use a CR to defer major funding decisions once again. Here is a rundown of the biggest issues at play in any potential spending deal:
- Defense vs. non-defense spending: Republicans are looking to lift the current caps on defense-related spending while Democrats are demanding dollar-for-dollar increases for non-defense priorities. Congressional leaders are reportedly discussing the possibility of increases on both sides, but some conservatives would likely oppose a drastic increase in government spending.
- Treasury at risk of defaulting: A new report from the Congressional Budget Office (CBO) estimates that the United States will hit its debt limit by mid-March. This is another deadline that would require a Congressional compromise to raise the debt ceiling or waive it outright.
- Immigration reform: Democrats have been pushing to address immigration alongside any budget deal, and extend Obama-era programs that allow pathways to citizenship for certain undocumented residents. GOP leadership, on the other hand, continues to want to decouple the negotiations to address spending first and come back to immigration. With both sides publicly refusing to budge, this remains one of the biggest barrier to finding a compromise.
- Remaining laundry list: While Congress is scrambling to keep the government running, it is unclear when health care spending measures like the Medicare “extenders” or the funding for community health centers will be resolved. These items could either be grouped in a large omnibus spending package, or passed one-by-one if Congress keeps opting for continuing resolutions.
WHAT HAPPENS NEXT?
Congress has only three more legislative days before the government funding expires on the 8th. With multiple pressures from both sides of the aisle, it is unclear what may happen. If Congress is unable to reach an agreement by next Thursday, the government is in danger of shutting down for the second time in 2018.
Stay tuned to Capitol Connector in the coming weeks for updates on the budget process.