CHN: Overnight Shutdown Ends after Budget and Spending Deal is Reached

February 9, 2018

An hours-long government shutdown ended in the early morning hours on Feb. 9 after the House and Senate agreed to pass a stopgap spending bill. This time, Congress was finally able to come to a long-awaited agreement on total funding amounts for FY18 and FY19, with substantial increases in appropriations, including some major gains for human needs programs. With the totals set, Congress now has until March 23 to make the detailed decisions that provide funding for everything from Head Start to Pentagon weapons systems. In addition, the legislation, now signed by the President, includes about $90 billion in disaster relief for hurricane and wildfire victims, renews many health programs, and includes a new prevention focus for child welfare services.

The short-term Continuing Resolution (CR) was not passed before the previous CR’s expiration at midnight on Feb. 8 because Senator Rand Paul (R-KY) refused to join in unanimous consent to speed up the Senate vote. This new CR provides flat funding for most government operations through midnight on March 23. It passed in the Senate (71-28) and the House (240-186). In the House, both parties were split over the bill. With 218 needed for enactment, 167 Republicans and 73 Democrats voted in favor; 67 Republicans and 119 Democrats were opposed. Most of the opposing Republicans objected to the size of the spending increases for domestic programs. Most of the Democrats who voted no had sought to include in this package protection for the Dreamers (see the related article in this issue of the Human Needs Report).

A bipartisan budget deal was required to lift the tight spending caps and automatic cuts (also known as sequestration) that were scheduled to go back into effect for FY18 and that would have required a $5 billion cut below FY17 appropriations totals. The agreed-upon Bipartisan Budget Act of 2018 will increase the caps on discretionary spending by $296 billion over two years. Defense spending caps will increase by $80 billion for FY18 and by $85 billion for FY19. When combined with roughly $140 billion in war-related funding (over the two years) not subjected to spending caps through the use of the Overseas Contingency Operations fund, the total defense budget will be $700 billion for FY18 and $716 billion for FY19 – more than either President Trump or congressional appropriators had asked for for FY18.

On the nondefense side, the spending caps will increase by $63 billion for FY18 and $68 billion for FY19, raising the caps to $579 billion in FY18 and $597 billion in FY19. Provided for in these increases are a number of priorities advocates have been pushing for. This includes, over the two years: $6 billion for opioid and mental health treatment services, prevention programs, and law enforcement efforts; $4 billion for college affordability, including programs that help police officers, teachers, and firefighters; $5.8 billion for the Child Care and Development Block Grant, which will double its discretionary funding level and increase by 230,000 the number of children whose parents can receive child care assistance; $20 billion for infrastructure (including funding for safe drinking water); $4 billion for hospitals and clinics for veterans, and $182 million for the Census Bureau for 2020 Census preparations. Also included in the package are a number of health care provisions, including a 10-year extension of the Children’s Health Insurance Program (up from the 6-year renewal passed by Congress last month), a 2-year extension of funding for Community Health Centers, and a 5-year extension funding for the Maternal, Infant and Early Childhood Home Visiting program.

More than $89 billion in disaster aid for hurricane and wildfire victims is also in the package, which is $8 billion more than the disaster aid bill the House passed in December. This includes $4.9 billion in increased Medicaid funding for Puerto Rico and the U.S. Virgin Islands, especially important because it commits the federal government to paying all of the territories’ Medicaid costs through the disaster recovery period, and prevents Puerto Rico from running out of Medicaid funds in a matter of weeks. Other disaster relief includes $28 billion in Community Development Block Grant-Disaster Recovery (including $11 billion to help Puerto Rico rebuild), $14 million in infrastructure funds to provide relief and assistance to Women, Infants, and Children (WIC) clinics in Puerto Rico and the U.S. Virgin Islands as they rebuild, and $2.7 billion for rebuilding schools and helping kids displaced by disasters.

The budget deal also provides for a one-year suspension of the debt limit, through March 1, 2019, and extends $17.4 billion of expiring business tax breaks, including tax breaks for owners of racehorses and NASCAR tracks and for film and television production companies.

According to CQ, only $100 billion of the spending increases will be paid for with offsetting cuts. One such offset will come from a more than $1 billion cut to the Prevention and Public Health Fund created by the Affordable Care Act. The agreement also found savings by selling off some of the Strategic Petroleum Reserve, extending through 2027 annual cuts to Medicare and certain other programs that have been in place since 2011, changes to encourage faster reemployment of the unemployed (some of which may reduce the length of federal unemployment benefits), and ways to transfer funds from the Federal Reserve to the U.S. Treasury’s general fund.

Democrats remained firm in their position that the principle of parity must be maintained in a bipartisan budget deal; that is, any additional money given to defense programs should be matched by money for nondefense programs. They say this deal achieved parity, as it eliminated (unequal) sequester cuts for both defense and nondefense programs and provided equal increases of $26 billion above that relief.

Now that a budget deal has been reached, members of Congress must finally come to agreement on item-by-item spending details, through an “omnibus” spending package that would combine the 12 required appropriations bills covering all government agencies for the rest of the fiscal year in one package. They believe they will achieve this prior to the March 23 deadline set by the current CR. Advocates are ready to oppose possible poison pill riders, or controversial policy changes, that members of Congress may try to add to the omnibus.



Categories: Budget and Appropriations