Congressional Budget Deal For FY 2020 Will Require Compromise

When Congress reconvenes after the Easter recess on April 29, job #1 will be to reach a deal on the top-dollar amount of federal discretionary spending for the federal government for FY 2020 beginning on October 1.  Discretionary spending is the portion of the federal budget totaling just over $1 trillion that Congress controls each year through the appropriations process.  It is comprised of defense and non-defense programs.  Non-defense programs include a wide range of programs such as agriculture, education, research, infrastructure, national parks & forests, environmental protection and public health.  Once the top number is achieved it is broken down and allocated over the twelve appropriations’ subcommittees in Congress. Each of these subcommittees have jurisdiction over varying Departments and independent Agencies of the federal government.

U.S. House Budget Committee Chairman John Yarmouth (D-KY)

If an agreement cannot be reached in Congress, the total discretionary spending caps revert to the agreed upon budget caps in the Budget Control Act (BCA) of 2011. This would mean a reduction of a total $55 billion in non-defense program spending from the previous year’s enacted level. 

The Trump Administration supports a federal budget that adheres to the Balanced Budget Act of 2011. However, the Administration supports adding $165 billion for the Department of Defense Overseas Contingency Operations that is exempt from the budget caps.

Source: Congressional Budget Office
  (in Billion $)  
  Defense Non-Defense Total
FY 2018 $629 $579 $1,208
FY 2019 $647 $597 $1,244
FY 2020 $576* $542 $1,118
  • Administration’s FY 2020 budget proposal adds $165 billion for Department of Defense Overseas Contingency Operations (OCO) and $9 billion of emergency funding, which are both exempt from budget caps.

House Democrats want more parity between the accounts and support increases to both non-defense programs and defense programs. House Democrats serving on the Budget Committee have proposed a two-year budget. For FY 2020 the proposed budget would total $733 billion for defense and $631 billion for non-defense programs.

That means there is a $17 billion difference between the Trump Administration and House Democrats on defense discretionary programs (Trump Administration: $750, House Democrats: $733).  An $89 billion difference separates the two on non-defense discretionary programs (Trump Administration: $542, House Democrats: $631). 

Given divided government this puts the Republican-controlled U.S. Senate in an arbitration role to try and work out the differences between the Trump Administration and the Democrat-controlled U.S. House.  U.S. Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Nancy Pelosi (D-CA) are scheduled to meet as soon as they return to Washington to begin negotiations. 

The political and policy realities are that a majority exists in both legislative chambers to support avoiding $55 billion in cuts to non-defense programs.  However, this will require both Leader McConnell and Speaker Pelosi to disregard the policy demands of their respective party’s fringe elements and hold together a majority of bipartisan members in the political center to achieve a budget deal.

Once a budget deal is completed on Capitol Hill, that deal must be taken to the White House where President Trump must decide to either 1) take the deal that is doable in Congress, or 2) watch the Pentagon take an upwards $160 billion cut (to meet the BCA level).

Despite being without a top number for the discretionary budget and their respective allocations, each of the twelve congressional appropriations subcommittees are already conducting hearings in the U.S. House and Senate.

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Tim Cansler