House budget deal held up on mandatory spending snag

Posted at 3:41 PM, Jun 27, 2017
and last updated 2017-06-27 15:41:12-04

The House budget committee is putting its budget markup on hold as conservatives and moderates in the Republican conference are divided over how the budget would reduce mandatory spending.

The struggle again to bridge the familiar splits inside the House GOP conference comes on the vehicle that top Republican leaders plan to use to push through one of their highest policy priorities — tax reform. And the divisions in the House mirror the challenge Senate leaders are wrestling with on the party’s other big agenda item, repealing and replacing the Affordable Care Act, also known as Obamacare.

A budget framework had emerged Monday in the House to set defense and domestic spending levels for the next fiscal year, as well as agree to $200 billion in cuts to mandatory spending programs, an increase from $150 billion in mandatory spending reductions that was initially being considered.

But that number has failed to satisfy either wing of the Republican conference, and plans to mark up the budget this week have been shelved.

“We’ve still got a few little pieces there we want to make sure we’ve still got all our members on board, and we’re continuing to work to get that to happen,” House budget chairwoman Dianne Black told reporters Tuesday. “I’m not going to talk about those numbers right now again because they’re being negotiated.”

Black said she was confident a House budget would eventually be passed out of committee, saying she was working to finalize a deal that had support of both the panel members and the broader Republican conference.

She insisted there was a viable path to getting 218 members on board.

One senior House GOP leadership aide insisted that the conference was still on track to pull together the budget but said conservatives were the sticking point, pressing for a broader deficit reduction number than some committee chairs were comfortable signing onto.

The $200 billion cut to mandatory spending was an attempt to thread the needle between conservatives who wanted more deficit reduction for mandatory spending and moderates concerned about cutting too deeply into the safety net, but now it appears neither side is happy.

“There was never an agreement on the $200 billion,” said North Carolina Rep. Mark Meadows, the leader of the conservative House Freedom Caucus. “That number was thrown out as an offer, it was never agreed to, and so it’s still a work in progress what we can do on the mandatory spending reductions.”

Centrist GOP Rep. Charlie Dent of Pennsylvania told reporters that setting $150 billion as a goal in deficit savings was aggressive but attempting to go beyond that number hurt the chances for the party to get tax reform done.

“If tax reform is the goal, dealing with entitlement changes simultaneously, I believe, makes the tax reform effort much harder, not easier,” Dent said.

He also noted the optics of doing both now, saying, “We set ourselves for cutting taxes for businesses while potentially weakening the safety net programs for lower income people.”

He argued it would be better to do the tax reform piece this year and focus on the significant changes to mandatory spending programs in next year’s budget.

Some committee chairmen are raising concerns about the additional cuts they would be tasked with coming up with if the budget called for $200 billion in savings. The budget doesn’t identify the specific cuts, but rather would ask various committees to reach the target deficit reduction numbers.

A large portion of the proposed budget savings would need to come from agriculture programs, such as food stamps, because the tax writing committee was constrained to come up with money as it worked through its tax plan.

“Fifty billion dollars is a lot of money,” said Rep. Mike Conaway, agriculture committee chairman.

Dent noted that Republicans have tried before to cut back on mandatory spending on the food stamp program in a farm bill recently and started out looking at $40 billion in reductions, but ended up settling at trimming roughly $9 billion in the program.

Republicans do appear to have settled on discretionary spending for the upcoming fiscal year, which is the bread-and-butter of the budget and sets the topline spending levels for the appropriations committees.

The House appropriations defense subcommittee and House armed services committee are both marking up defense bills this week that adheres to the budget framework’s $621.5 billion base defense topline and $75 billion war budget, for a total increase of $28.5 billion more than the Trump administration request.

Under the budget framework, domestic spending would be set at $511 billion, a significant increase above the Trump budget’s $462 billion request but less than what was passed in last year’s omnibus spending deal.

Defense hawks had been pressing for $640 billion in defense spending, but agreed to the slightly lower number along with assurances for 5% growth to defense in the years to come.

“There is agreement with the budget committee, armed services committee and appropriations committee on the topline for defense this year, as well as consistent steady growth in future years,” said House armed services chairman Mac Thornberry.

Despite the snag on the budget deal, House appropriators are moving forward with their bills this week.

“We’re going to keep marking,” said Oklahoma Rep. Tom Cole. “The appropriations process is moving right along, so it certainly hasn’t slowed us down.”

Of course, the House’s budget numbers are unlikely to be agreed to in the Senate, where Democrats who object to the lower domestic spending topline can filibuster spending bills.

Five senior Senate Democrats, including Minority Leader Chuck Schumer, sent a letter to Republican leaders on Monday that called for “continuing the parity principle” of equal increases for both defense and domestic spending, which was the basis for spending deals during the Obama administration.

“I suspect that the $621 number on defense will likely come down,” Dent said. “We can talk about $511 billion today and $621 billion, but we know that numbers are going to change. One’s going up, the other’s coming down — I hope everybody is ready to vote for the omnibus in December when that comes rolling around.”