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Divided House Passes 2-Year Budget Deal to Raise Spending Divided House Passes 2-Year Budget Deal to Raise Spending
(about 4 hours later)
WASHINGTON — A divided House on Thursday passed a two-year budget deal that would raise spending by hundreds of billions of dollars over existing caps and allow the government to keep borrowing to cover its debts, amid grumbling from fiscal conservatives over the measure’s effect on the federal deficit.WASHINGTON — A divided House on Thursday passed a two-year budget deal that would raise spending by hundreds of billions of dollars over existing caps and allow the government to keep borrowing to cover its debts, amid grumbling from fiscal conservatives over the measure’s effect on the federal deficit.
Only 65 Republicans joined the Democratic majority in the 284-149 vote, with 132 Republicans voting against the bill, despite President Trump’s endorsement and pressure from key outside groups, including the Chamber of Commerce, to avoid a potentially catastrophic default on the government’s debt. Democrats were left to get the deal passed, despite misgivings from some liberals over its increases in military spending over the next two years. Only 16 of them voted no. Only 65 Republicans joined the Democratic majority in the 284-to-149 vote, with 132 Republicans voting against the bill, despite President Trump’s endorsement and pressure from some outside groups, including the Chamber of Commerce, to avoid a potentially catastrophic default on the government’s debt. Democrats had enough numbers to pass the deal without Republican support, despite misgivings from some liberals about its increases in military spending over the next two years. Only 16 of them voted no.
The Senate is expected to approve the measure next week, and Steven Mnuchin, the Treasury secretary, said he would ensure that the department had money through the next two weeks to accommodate Congress’s timeline. “House Republicans should support the TWO YEAR BUDGET AGREEMENT which greatly helps our Military and our Vets,” Mr. Trump said on Twitter on Thursday morning before the vote. “I am totally with you!”
But even before the vote, Representative Kevin McCarthy of California, the Republican leader, correctly predicted that less than half of his 197-member conference would support the bill.
The Senate is expected to approve the measure next week, and Steven Mnuchin, the Treasury secretary, said he would ensure that the department had money through the next two weeks to accommodate Congress’s timeline. The deal suspends the debt ceiling until July 31, 2021, well beyond the end of Mr. Trump’s first term.
“The full faith and credit of the United States of America should never, ever be in question,” Speaker Nancy Pelosi of California said in a floor speech before the vote. “This is about paying for what we have invested in already.”
With spending levels set, the bare-bones budget deal will allow lawmakers to begin filling in the details of spending bills that would fund the government agency by agency and program by program beyond Oct. 1, when the new fiscal year begins. Republican leadership in both chambers played up the increase in military spending, while Democrats emphasized the bump in spending for domestic programs.With spending levels set, the bare-bones budget deal will allow lawmakers to begin filling in the details of spending bills that would fund the government agency by agency and program by program beyond Oct. 1, when the new fiscal year begins. Republican leadership in both chambers played up the increase in military spending, while Democrats emphasized the bump in spending for domestic programs.
The success of the bill signals the sunset of the austere spending caps enforced by the Budget Control Act of 2011, a deal forged during Barack Obama’s presidency after a group of rebellious House Republicans demanded deep spending cuts in return for an extension of the debt ceiling. The new deal, drafted mainly by Speaker Nancy Pelosi and Mr. Mnuchin, not only blows past those Budget Control Act caps by $320 billion, but allows the law to expire on schedule after 2021. “Considering the circumstances of divided government, this is a good deal,” said Senator Mitch McConnell, the majority leader. “It’s a good deal because it achieves the No. 1 goal on the Republican side of the aisle: providing for the common defense.”
Though Republicans once trumpeted the budget act as the party’s crowning achievement of the Obama era, there is little love left in Washington for the 2011 law. The legislation created the sequester — automatic spending cuts that would sweep across almost all government programs if Congress did not abide by the caps — as a way to force a bipartisan “supercommittee” to reach a more equitable deal to control the federal debt through a mix of tax increases, spending cuts and changes to the real drivers of government spending, Medicare, Medicaid and Social Security. The success of the bill signals the sunset of the austere spending caps enforced by the Budget Control Act of 2011, a deal forged during Barack Obama’s presidency after a group of rebellious House Republicans demanded deep spending cuts in return for an extension of the debt ceiling. The new deal, drafted mainly by Ms. Pelosi and Mr. Mnuchin, not only blows past those Budget Control Act caps by $320 billion, but also allows the law to expire on schedule after 2021.
But that committee failed, and programs at the annual discretion of Congress took the brunt of the cuts. The law is broadly seen to have stymied federal investment too soon after the 2008 recession. Though Republicans once trumpeted the budget act as the party’s crowning achievement of the Obama era, there is little love left in Washington for the 2011 law. The legislation created the sequester, automatic spending cuts that would sweep across almost all government programs if Congress did not abide by the caps. It was meant to be a way to force a bipartisan “supercommittee” to reach a more equitable deal to control the federal debt through a mix of tax increases, spending cuts and changes to the real drivers of government spending, Medicare, Medicaid and Social Security.
Most policymakers in Washington believe that the spending caps were set at unrealistic levels, designed to threaten, not legislate. Several of the parties involved in the original 2011 deal stress that the deal was agreed to under great duress, and was never intended to dictate government policy. But that committee failed, and programs at the annual discretion of Congress took the brunt of the cuts. The law is broadly seen as having stymied federal investment too soon after the 2008 recession, said Sharon Parrott, a senior vice president at the Center on Budget and Policy Priorities, a liberal research center.
“It was never meant to be a policy of choice; it was only adopted as a way to avoid default,” said Jacob J. Lew, the Treasury secretary at the time, in an interview. “It was a crisis moment.” Gene Sperling, then the director of the White House National Economic Council, referred to the caps in a statement as “an unfortunate last-ditch device.” “Every couple of years, we had this environment of crisis because we had to undo funding levels that most people in both parties thought were unworkable,” she said. “In the absence of that sort of crisis and brinkmanship environment, Congress still has to fund federal agencies and programs.”
Ultimately the lesson learned, said Brendan Buck, an aide at the time to then-Speaker John A, Boehner, was “that this is political reality and there’s not just much forcing mechanism left to achieve anything.” Most policymakers in Washington believe that the spending caps were set at unrealistic levels, meant to threaten, not legislate. Several of the parties involved in the original 2011 deal stress that it was agreed to under great duress, and was never intended to dictate government policy.
“I don’t think the every two-year, manufactured crisis is a terribly viable way of approaching this,” he added. “It was never meant to be a policy of choice; it was only adopted as a way to avoid default,” Jacob J. Lew, the director of the Office of Management and Budget at the time, said in an interview. “It was a crisis moment.” Gene Sperling, then the director of the White House National Economic Council, referred to the caps in a statement as “an unfortunate last-ditch device.”
Ultimately the lesson learned, said Brendan Buck, an aide at the time to Speaker John A. Boehner, was “that this is political reality and there’s not just much forcing mechanism left to achieve anything.”
“I don’t think the every-two-year, manufactured crisis is a terribly viable way of approaching this,” he added.
There are some exceptions: In interviews this week, Senator Ted Cruz, Republican of Texas, praised the act as “an example of meaningful spending controls.” Representative Justin Amash of Michigan, newly independent from his Republican roots, doubled down on his vote against the 2011 legislation, on the grounds that the caps were not strong enough.
“We pushed hard,” said Mr. Amash, who voted against the budget deal on Thursday. “Honestly, there’s not a lot of hope for this system, with these two parties.”
“There’s no incentive within Congress to keep the debt down,” he added. “That’s just not something they’re interested in. They believe they can keep spending forever.”
The majority of Democrats rejoiced over their deliverance from the caps — particularly on a deal that they felt “got rid of it on our terms,” as Senator Chuck Schumer of New York, the Democratic leader, put it, pointing to the increase in domestic spending.
“It gave such an advantage to those who wanted to just cut the domestic side that we were always fighting with one hand tied behind our back,” Mr. Schumer said in an interview. “It’s not the kind of issue that goes viral, but it really matters to people.”
The demise of the caps will most likely balloon government spending. The Committee for a Responsible Federal Budget estimated on Thursday that with Mr. Trump’s signature on the budget deal, $4.1 trillion would have been added to the national debt under his term.
“This is an amazing capitulation with regard to sustainable spending and financial prudence in Washington, D.C.,” said Mark Sanford, the former South Carolina governor and representative contemplating a presidential challenge against Mr. Trump. “Maybe breathtaking is a better word.”
Despite their actions, some lawmakers still talked about deficit control — some day.
“It was a crude tool to bring people together,” Representative Mark Meadows, Republican of North Carolina, said of the Budget Control Act. “One thing has remained constant throughout the whole B.C.A. cap: Congress continues to not do its job.”
Some Republicans sought to underscore their dissatisfaction by pushing for a last-minute change to the title of the measure. After the vote was gaveled closed, Representative Thomas Massie, Republican of Kentucky, proposed naming it “A Bill to Kick the Can Down the Road and Other Purposes.”
With a 47-to-384 vote, the House chose to stick with the Bipartisan Budget Act of 2019.