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February 15, 2018

Summary

The US government shut down, again, for only a few hours last Friday while Congress worked overtime hashing out another Continuing Resolution that funds federal operations through March 23, along with a 2-year spending bill, both signed into law by Trump on the morning of February 9. The shutdown had little effect during pre-dawn hours as Congress “kicked the can” of FY2018 closer to a probable resolution, to occur nearly five months after the Oct. 1 start of the fiscal year.

The new agreements were followed on Monday, February 12 by the release of Trump’s FY2019 efficient, effective, and accountable American budget of major savings and reform, which calls for unprecedented cuts in non-defense domestic and foreign programs and the abolishment of several federal agencies. The 2-year Bipartisan Budget Act of 2018, however, negates much of the savings called for by Trump, allocating nearly half of its $300 billion spending cap to support non-defense government programs. As an addendum to the FY2019 budget proposal, the White House noted, “The administration does not believe these non-defense spending levels comport with its vision for the proper role and size of the federal government.”

While passage of the 2-year spending deal provides Republicans with a long sought-after, hefty increase for the Pentagon and appeases Democrats’ demands for support of non-defense domestic agencies, a combination of this new spending and last year’s tax cuts will bloat the deficit to nearly $1 trillion in 2019. The deal also raises the debt cap, preventing a first-ever default on government loans and putting off another vote on debt until March of 2019, though analysts predict the deal itself will increase federal debt to record levels.

Also included in the bill is nearly $90 billion in disaster relief for last year’s devastating hurricanes and wildfires. This allocates only $11 billion for Puerto Rico, far short of the estimated $94 billion needed for its recovery from Hurricane Maria. Other provisions include a ten-year extension of CHIP and a $6 billion injection of funds to combat the opioid epidemic.

As the government continues to operate under 2017 spending levels, Congress now has just under six weeks — including a Congressional recess for all of next week — to finalize appropriations for 2018 and to haggle over unresolved issues such as infrastructure spending and dozens of riders. In an unusual break from tradition, the GOP-led Congress has made no attempt to include a ten-year plan to balance the budget.

Analysis

Welcome to election year 2018. Although House Minority Leader Nancy Pelosi did try to make a last stand for DACA during budget talks, while Libertarian-turned-Republican Rand Paul stood stubbornly alone to see the government shut down on Friday, most of Congress appears ready to move the budget along and to polish up their respective parties’ reputations.. Contentious immigration debate has been separated from the budget process. Republicans have for the time being set aside overt attempts to repeal Obamacare which, in an election year, can only mean their constituency is not entirely on board. The lauded boosts in military and domestic spending offer a win-win compromise for both parties — if voters ignore the increased debt and deficit that come with it. As lawmakers become more sheepish about forcing shutdowns to meet partisan ultimatums, the Republican-led Congress has hidden away many of its most controversial proposals in the form of budget riders, or provisions that have nothing to do with the fiscal year budget but would never pass as laws on their own merits.

One of the most obvious bait-and-switch election year tactics in the spending bill is the revival of more than thirty special-interest tax breaks that were left to expire at the end of 2016. These “extenders” are supposed to encourage individuals and business to change behavior, but these breaks only apply to last year’s economic activity, and only to those who have not already filed their tax returns. Tax breaks related to energy-efficient home improvements, residential renewable energy and electric vehicles, higher education and mortgage debt, among others, might benefit some voters this year, but rely on some $15 billion the government does not have and must now borrow. They may, at least, serve to partly obscure the effects of the new tax law on individual returns while giving constituents a nod in areas Republicans are attacking on other fronts, like renewable energy and higher education.

Progressive non-governmental advocacy groups are bracing themselves for a tough battle in the weeks ahead, to educate lawmakers and voters on the hidden costs of “poison pill” riders attached to FY2018 appropriations and to advance the progressive agenda before the March 23 deadline. While voters may see hope for domestic programs, raising the non-defense spending cap does not mean Congress will actually appropriate all those funds. What’s more, with a GOP-controlled House, Senate, and White House, Republican policy preferences may more easily advance via executive orders and use of the Congressional Review Act. Riders are yet another duplicitous way to bypass the legislative process and slip unsavory policy into must-pass appropriation bills. Transparency on these issues is even more crucial as midterm elections approach.

Scores of riders tacked onto appropriations for FY2018 include: an effort to repeal the Johnson Amendment, which would enable religious groups to make campaign contributions; a long-standing rider to block a rule requiring publicly-traded companies to disclose campaign contributions to stockholders; an effort to stop the Consumer Financial Protection Bureau’s watch-dog activities over banks;  a renewed attack on the fiduciary rule, restrictions on stem cell research and radical reduction of access to abortion and other reproductive health care services; repeal of safe drinking water protections; reversal of an Obama-era rule to reduce methane gas emissions; numerous other anti-environmental riders; and more.

Given the dysfunction of the 115th Congress thus far, the March deadline may come and go with more short-term Continuing Resolutions and perhaps, more government shutdowns. Meanwhile, in a Farm Bill year and with the new FY2019 budget goals already on the table, voters and advocates will be scrambling to keep track of even more pitfalls and hidden, poison pill riders.

Engagement Resources

  • The Committee for a Responsible Federal Budget is a nonpartisan, nonprofit organization committed to educating the public on issues with significant fiscal policy impact.
  • Clean Budget Coalition is made up of nearly 200 groups that have joined together to oppose riders.
  • The Federal Budget Group is dedicated to providing policymakers, the media, and the general public timely and reliable information that is strictly nonpartisan, rigorously factual, and explained in plain English.

This brief was compiled by Jennifer Chesworth. If you have comments or want to add the name of your organization to this brief please contact jennifer@usresistnews.org.


 

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