March Madness? Spending Fights May Threaten Trump Agenda

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By Nancy Ognanovich

Nov. 21 — Republican leaders’ decision to abandon work on this year’s appropriations bills in the lame-duck session could set the stage for a confrontation over government spending next March—at the very time the new Trump administration wants the focus on its ambitious legislative agenda, strategists in both parties said.

House Speaker Paul Ryan (R-Wis.) acceded to the Trump transition team’s call for Republicans to back away from the bills. But ultimately the new administration may suffer if it finds itself in a battle over federal spending as it is trying to build political support for infrastructure, tax and other proposals, the strategists said.

“It shouldn’t be an excuse for shutting down the government, but you can’t take it off the table,” said Jim Dyer, a principal at Podesta Group and former top House aide who sharply criticized the decision to resort to another stopgap to fund the government, when House and Senate appropriators essentially had the bills negotiated and ready for leadership to take to the House floor.

Rather than wrap up the 11 unfinished bills for the current fiscal year in December, Ryan and Senate Majority Leader Mitch McConnell (R-Ky.) now are being asked to simply extend funding again via another continuing resolution running to March 31. Some type of bill is necessary to prevent a funding lapse as only one of the 12 regular bills has been signed into law by President Barack Obama, and a current stopgap expires Dec. 9.

“It does not profit the president-elect at all to do this next spring,” Dyer, former Republican staff director of the House Appropriations Committee, told Bloomberg BNA. “This is cleaning up last year’s stuff. Now they have traded one set of problems for another.”

Power of the Purse

Aides to the House and Senate appropriations committees spent the past two months negotiating the 11 bills. After lawmakers returned the week of Nov. 14, “four corners” meetings commenced—meetings involving top House and Senate Republicans and Democrats on each of the 11 subcommittees (four lawmakers per subcommittee) aimed at finalizing the measures.

Former Rep. Jim Moran (D-Va.), now an adviser at McDermott Will & Emery, told Bloomberg BNA the bills were essentially done.

“The [House] leadership wanted them to go in minibuses two or three at a time and then planned to send them over to the Senate as an omnibus,” he said.

But Moran, a former senior member of the House Appropriations Committee, said he was told that Reince Priebus, the Republican National Committee chairman chosen to serve as White House chief of staff in the Trump administration, asked Ryan to instead pass a new CR.

“Ryan’s a good soldier but he wanted the bills to go forward,” Moran said. “All the leaders wanted that, just to clean them up and do it.”

Ryan told reporters the decision will give the new administration the chance to weigh in on spending priorities. But at the same time Ryan insisted lawmakers won’t be relegated to the bench. Ryan said members increasingly are concerned they already have given away too much decision-making over federal spending to the White House and agencies.

“Our members are worried that we have seen a dilution of the separation of powers,” Ryan said in explaining why lawmakers also are considering bringing back earmarks. “Our members are worried that the executive branch, unelected bureaucrats, have been given far too much power and that we’ve seen violence done to the separation of powers.”

Showdowns of March

McConnell’s priority during the run-up to the election was to avoid any fiscal crisis, repeatedly saying there would be no shutdown or drama over raising the debt limit on his watch. But while he wanted to finish the bills in December to clear the way for the new president, McConnell said little about the new plan to push another CR into next winter. Now lawmakers will be facing both a deadline to fund the government and having to deal with the federal debt limit early next year.

The last time lawmakers faced a crisis over government funding in March was in 2015, when House Republicans tried to withhold funds for the Department of Homeland Security to force Obama to back away from his immigration policies. While the other 11 bills for FY 2015 were passed months earlier, Congress only provided a CR for programs covered by the Homeland bill into the spring. Ultimately, however, McConnell and then-House Speaker John Boehner (R-Ohio) convinced other Republicans to back away from their demands to avoid a shutdown at the agency.

Sen. Roy Blunt (R-Mo.), a member of McConnell’s leadership team and a member of the Senate Appropriations Committee, told Bloomberg BNA he is disappointed that this year’s bills are being shelved. Blunt, who chairs the Labor, Health and Human Services Subcommittee, also expressed some uncertainty about the bills’ fate.

“It’s unfortunate because we had made so much progress on our bill, but now that’s going to have to wait until March—if even then,” Blunt said.

“At that time next year the new administration is going to want to have the focus on other things and not on these bills,” he added.

Blunt said abandoning the bills at this point means that the $2 billion increase both sides agreed to for the National Institutes of Health will be lost. Also, he said, the $11.6 billion supplemental Obama requested with almost $6 billion for defense programs will remain on the back burner and the final funding for the Pentagon in FY 2017 could go unresolved. That, in turn, could jeopardize the pending Defense authorization bill, now the subject of House-Senate talks and another item Republican leaders wanted to finish in the lame duck, he said.

“If you don’t have Defense spending settled, I don’t see how you do the Defense authorization bill,” Blunt said.

Sen. Lindsey Graham (R-S.C.), chairman of the State-Foreign Operations Subcommittee, said he wanted an omnibus and will not vote for a CR.

“It may pass anyway but I’m not going to vote for one because we’ll be losing the Defense increase,” Graham said.

Series of CRs?

Democrats sharply criticized the demise of the bills, saying months of bipartisan work had been “thrown in the garbage,” and gave no immediate indication they would support a CR. Democrats also aren’t expected to support any reworked set of bills if they deeply cut their priorities in the non-defense budget.

Scott Lilly, former Democratic staff director at the House Appropriations Committee, told Bloomberg BNA that putting the bills on hold jeopardizes many agreements already made.

“I think what the [Trump] administration is asking puts the whole thing at risk,” said Lilly, now with the Center for American Progress. “The biggest item is the $2 billion plus-up for NIH—that will go away.”

Lilly said Republicans and President-elect Donald Trump should grab the $11.6 billion Obama is proposing for Defense and State Department operations overseas and back a plan to quickly wrap up the 2017 bills.

“My guess is they may wish they had it at some point,” Lilly said of Obama’s supplemental request. “Anything you can get on the book of your predecessor is a good thing. You could always use it to pay for other things you want.”

Lillly said the new administration might seek to rewrite all the bills to boost some programs and cut others and insert legislative language it wants. But that process—all underway while launching a fiscal year 2018 budget and other initiatives—could lead to a deadlock, even with other Republicans.

“They have far more choices to make than they have people to make them,” Lilly said.

New Game in Town

Dyer said Blunt’s comments reflect concern that the 2017 bills will languish and then ultimately could die as policy makers find it easier to just keep passing stopgaps. The latter is dismissed by appropriators as putting the federal government on autopilot.

“Inactivity breeds inactivity,” Dyer said. “That means you’re six months into a fiscal year and someone will say, ‘Let’s just do it for another six months.’”

Given all the uncertainty, Dyer said the rush is on in the lobbying community to get as much as possible into the CR that appropriators now must write.

“Now everyone in town will try to get stuff on a CR,” said Dyer, who represents defense giants Lockheed Martin Corp. and General Dynamics Corp.

Appropriators already have their hands full because they have to start from scratch on the CR, Dyer said. Among other things, the list of “anomalies” that the White House budget office sought in August now may have to be revised to reflect new information about agency finances, he said.

Meanwhile, many lawmakers may clamor to put supplemental spending in the CR, from the extra Defense funds to money to help storm-ravaged states and for Flint, Mich., to combat its drinking water crisis, he and others said.

That’s a real contrast from a week ago, when appropriators were close to finishing this year’s bills, Dyer said.

“The only real decisions they had to make was whether the sage brush [habitat] language was in there and what the top line is for Defense,” Dyer said.

Moran, however, said he’s less certain the CR will grow large in size.

“I think it will be as clean as it could be,” said Moran, whose firm represents defense giants that include General Dynamics Corp., Northrop Grumman Corp. and Boeing Co. “I think you’ll see a supplemental in the spring.”

Yet Lilly said he still wouldn’t be surprised if some Republicans privately urge Trump to reconsider the matter.

“Self-interest tends to prevail in politics,” Lilly said.

“It’s just amateur hour,” Lilly said. “Democrats ought to be very pleased. [Republicans are] creating problems for themselves that will be fun to poke at as time goes by.”

To contact the reporter on this story: Nancy Ognanovich in Washington at nognanov@bna.com

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

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