Party Infighting, 2015 Deal Blamed for 2016 Budget Failure

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By Jonathan Nicholson

July 29 — It wasn't supposed to be like this.

Heading into the summer legislative break, neither chamber of Congress has adopted a budget resolution laying out the party's fiscal vision. The House has completed floor action on six appropriations bills, while the Senate has voted on three, leaving open the possibility of a politically bruising confrontation with the White House on government funding levels when lawmakers return to Washington in September.

That was not the plan Republican leaders drew up in January in Baltimore, as the party held its annual congressional retreat. Then, the idea was to get the year off to a quick start by adopting a budget well ahead of the usual schedule, and then filling out its discretionary spending details with funding bills that would be passed by the end of July.

In that scenario, Republicans would avoid the kind of end-of-fiscal-year showdown that could hurt their party politically as they hoped to capture the White House and maintain control of both chambers of Congress.

Done In By Success

So what happened? At least with regard to the budget, an issue on which there is usually wide agreement among Republicans in the Senate and House, Republican leaders and outside observers say the GOP was in part done in by its own success—the 2015 spending-debt deal (Pub. L. No. 114-113) that set overall numbers for defense and non-defense appropriations for both fiscal 2016 and 2017.

Getting to that deal, though, had its own cost: the ouster of then-House Speaker John Boehner (R-Ohio) and the installation of Rep. Paul Ryan (R-Wis.) as his successor. The two-year nature of the deal, along with language in it that made adopting a budget in the Senate optional, combined with intraparty disagreements on the House side, led to the failure of both chambers to adopt a budget for the first time since 2010.

“When that deal was struck, with Boehner leaving, the debt limit being adjusted and the spending caps modified, once that was set, I felt, at that moment, they're not going to do anything,” said Bill Hoagland, a former Senate Republican budget staffer and senior fellow with the Bipartisan Policy Center (BPC).

At the time of the deal, though, Senate Republicans said the language in the deal that allowed the Senate to effectively “deem” a budget adopted without voting on one in order to enforce procedural points of order didn't mean there would be no budget.

Senate Looked to House

“We're certainly committed to trying to pass a budget this year, no question about it,” Senate Majority Leader Mitch McConnell (R-Ky.) told reporters at the party retreat in Baltimore Jan. 14 (See previous story, 01/15/16).

Senate Budget Committee Chairman Mike Enzi (R-Wyo.), who had been mum on his budget plans, also said he planned to mark up a budget after McConnell's comments, though he never set a firm date.

“Yes, we're doing a budget resolution this year,” Enzi said Jan. 20 (See previous story, 01/21/16).

By early February, though, some Republican senators, including some on Enzi's own committee, did not want to have a politically tough vote on the budget, along with the usual “vote-a-rama” marathon series of rapid-fire amendment votes, unless they knew their counterparts in the House would do the same.

“I think there's a lot of concern that the House and Senate can't work together to get a final bill passed and a belief that, generally, the best thing to do here is to let the House go first and see if they can be successful,” Sen. Roy Blunt (R-Mo.) told Bloomberg BNA Feb. 10 (See previous story, 02/11/16).

House Aimed for March

In the House, Republican leaders pressed for an earlier-than-usual annual outlook report from the Congressional Budget Office to allow the Budget Committee to get started working on a budget resolution. While budget resolutions are usually adopted and a conference agreement worked out between late March and mid-April, the plan in the House called for marking one up in committee in February.

“The expectation is that we'll produce that budget and have it on the House floor before early March,” Rep. Rob Woodall (R-Ga.) told Bloomberg BNA Jan. 6 (See previous story, 01/07/16). “I expect we'll have a House budget resolution before the second week of March.”

The need to work on a budget resolution was cited by House Budget Chairman Tom Price (R-Ga.) as he and Enzi announced a joint decision to not have their committees hold the traditional hearings to hear the Office of Management and Budget (OMB) director discuss the White House's fiscal 2017 budget submission.

“Rather than spend time on a proposal that, if anything like this Administration’s previous budgets, will double down on the same failed policies that have led to the worst economic recovery in modern times, Congress should continue our work on building a budget that balances and that will foster a healthy economy,” Price said Feb. 4.

‘No Reason' for House Action

In that same joint statement, Enzi said he preferred to work on overhauling the federal budget process rather than hear from OMB Director Shaun Donovan.

Hoagland said the lack of willingness in the Senate to work on a budget undermined House members' appetite to vote on a budget.

“There was no reason for the House to move,” he said.

House Republican leadership also faced a rebellion on the budget that mirrored the one that brought down Boehner in 2015. Members of the House Freedom Caucus, a group of libertarian and conservative House Republicans, objected to a budget plan that would give official blessing to the $1.070 trillion combined defense and non-defense funding for fiscal 2017 that was agreed to in the 2015 deal.

Despite that impasse in the larger Republican conference, Price pushed ahead and the Budget Committee approved a $1.070 trillion budget resolution (H. Con. Res. 35) March 16. The vote was 20-16, with two Republicans, Rep. Marlin Stutzman (R-Ind.) and Rep. Dave Brat (R-Va.) joining with Democrats to vote against the plan. Republican leaders and members of the House Freedom Caucus continued to discuss ways of hammering out the difference over the funding levels for weeks afterward, to no avail.

In the Senate on April 18, Enzi formally filed the budget aggregate numbers for fiscal 2017, using the backstop capacity included in the 2015 deal and making adopting a budget in the upper chamber unnecessary.

Price: Outcome ‘Predetermined.'

Asked July 13 what he had learned from the failure to pass a budget, Ryan, a former Budget chairman himself, said, “One of the reasons why we had budget issues is because we had a two-year budget deal in place.”

“I think it basically said that we already have a budget set, so we can already go on with our appropriations. And so that's what has happened,” he said.

Ryan cited the House being ahead of the Senate in passing appropriations bills and said, “We're restoring order and we're getting our jobs done. I can't speak for the Senate.”

Price took a similar tack.

“When you have two-year 302(a)s, the incentive for doing a budget resolution is not much,” he told Bloomberg BNA July 8. “The outcome of this year from a budget standpoint was pre-determined in October of 2015.”

House Minority Leader Nancy Pelosi (D-Calif.), who took political heat when her party failed to adopt a budget in either chamber in 2010, taunted Republicans at her final press conference July 9 before lawmakers started their summer break.

Budget More Than Caps

“No budget, no pay. I subscribe to that,” she said, referring to a GOP-backed provision would have delayed lawmakers' pay in the absence of budget consideration. “That's what they said. Since it's their idea, and they don't have a budget—no budget, no pay.”

The BPC's Hoagland said the 2016 experience supported the idea of doing budgets on a biennial basis, something Enzi supports. But it also showed how little resonance the budget is having politically and how the budget debate seems to have narrowed to focus on only annual appropriations, which make up less than one-third of overall federal spending, he said.

“A budget, from my perspective, is not meant to be just the discretionary. Budget resolutions are meant to talk about all spending and all revenues,” Hoagland said. “We don't want to fall into this trap of just negotiating the caps every two years.”

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

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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