House GOP Mulls Budget Plan, Agrees on Non-Defense Figure

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By Jonathan Nicholson

House Republicans were still grappling with the Pentagon’s funding level and tying large spending cuts to a proposed overhaul of the U.S. tax system, putting in doubt a markup of a budget plan in the week of June 26.

Party members gathered for the second time in four days in the basement of the U.S. Capitol June 23 to discuss the fiscal 2018 budget resolution and appropriations. While there was consensus on funding non-defense programs slightly below the Budget Control Act cap, lawmakers said, agreement on a number for defense and directives to be given to committees to find savings in programs in their jurisdiction remained elusive.

“We had a good family conversation in there. We’ve got to get this done. There is no other way around it, in order to get to tax reform, in order to be able to get to where we need with defense in our country, we’ve got to be able to get to a consensus here,” said House Budget Chairman Diane Black (R-Tenn.) when asked by reporters afterwards whether her panel would mark up a budget resolution in the week of June 26.

“We’re still not at that point at this point in time, but we are working very hard, so I can’t give you definite date, but I can tell you this, that we are very close and we will continue to work,” she said.

‘Hard 10 Percent’

House Speaker Paul Ryan (R-Wis.) announced agreement on $511 billion as the figure for appropriators to divide up for non-defense programs for fiscal 2018. While that will be the House Republican opening bargaining position, most observers, including Senate Majority Leader Mitch McConnell (R-Ky.), believe a bipartisan appropriations deal, and thus Democratic input, will be needed to avoid a government shutdown on Oct. 1. The $511 billion figure is about $5 billion below the BCA non-defense cap of $516 billion.

Republicans remained deadlocked over Pentagon funding levels, several lawmakers said after the meeting. The Budget Committee is looking at $521.5 billion for fiscal 2018 defense appropriations, well above the $549 billion BCA cap level and even above the $603 billion proposed by President Donald Trump in his budget. But defense advocates, led by House Armed Services Chairman Mac Thornberry (R-Texas), are pushing for $640 billion, or $91 billion above the BCA cap.

Still, some said the gap was narrowing on where the defense figure should be set. “I think it’s about 80, 90 percent there,” said Rep. Hal Rogers (R-Ky.), a former Appropriations Committee chairman. “But that’s a hard 10 percent to work on.”

Members of the House Freedom Caucus want to ensure that reconciliation directives be given to committees, including Ways and Means for a tax overhaul, and also require spending cuts in entitlement programs, but the size of those cuts remained a stumbling block. While the Budget Committee has been looking at $150 billion over 10 years for the total from all committees, the Freedom Caucus, which is comprised of conservative and libertarian House Republicans, has been pushing for even more. Legislation drawn up to meet reconciliation directives is immune to filibuster in the Senate.

How to tie entitlement cuts to the tax overhaul has been a point of contention. Rep. Mario Diaz-Balart (R-Fla.) said, “How much can you do of that while still not putting in jeopardy tax reform, which is a huge priority obviously for the conference and a huge priority for the White House? Again, what is that magic number? There is no certainty what that number is.”

‘Part of the Solution’

Aside from Ways and Means, other authorizing committees are also expected to be given reconciliation savings targets, which could put them on the spot for making politically tough program cuts. For example, House Agriculture Committee leaders in February, in their annual letter to the Budget Committee, said savings from the last farm policy bill enacted in 2014 should mean no further cuts should be sought from them.

“We further urge you to require no further budget reductions from within the jurisdiction of the Committee on Agriculture but rather that the fiscal year 2018 budget resolution fully respect the commitments made under the 2014 Farm Bill while providing the Committee the budget flexibility necessary to develop and enact an effective new farm bill before the current law expires,” wrote Agriculture Chairman Mike Conaway (R-Texas) and ranking Democrat Colin Peterson (D-Minn.).

Conaway said June 23 that his panel will work to find savings if asked to by Black and suggestions otherwise were untrue. “That misinformation is out there and I’m not going to negotiate the numbers in the press,” he said. “My position is that we’re going to be a part of the solution on the budget, including reconciliation instructions.”

Black declined to comment on any particular committee’s possible instructions. “Everybody is working with us and we’re just not quite there yet,” she said.

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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