Congress Shuffles Closer to a Budget Deal, as Appropriations Process Stops

The appropriations process is all but over, after a Confederate flag flap during floor debate of the House Interior-Environment bill brought the process to a standstill. While the appropriations committees in both the House and Senate may mark-up their final appropriations bills over the coming weeks, the bills will likely never see the floor of the House or Senate.

Democrats will continue their push for a budget deal to relax the sequester’s spending caps for FY 2016, with Senate Democrats blocking any appropriation legislation from reaching the Senate floor. While there has been increased discussion of a possible budget deal in recent weeks, it is unclear who would negotiate it and what it would include. Republican leadership is expected to push for full offsets for any spending increases, while Democrats will call for equal increases in both defense and non-defense spending.

When Congress returns from August recess there will be only ten legislative days before federal funding runs out, and Congress will likely pass a Continuing Resolution to keep the government open beyond September and buy time to either negotiate a budget deal or an omnibus appropriations bill. Complicating the situation, Congress will also need to raise the debt ceiling sometime in November or December, which has been a difficult task over the last several years.

Budget Reconciliation Will Wait Until After August Recess

Congress will miss the July 24 budget reconciliation deadline, and will not consider reconciliation legislation until after the August recess at the earliest. House Budget Committee Chairman Tom Price (R-GA) noted the deadline was self-imposed, and would not preclude reconciliation later this year. It is unclear what Republicans will use the reconciliation process for, as some members of the conference would like to use it to repeal Obamacare while others want to make changes to mandatory programs such as Social Security, Medicare, and Medicaid.

The budget reconciliation process allows the Senate to bypass the typical 60-vote threshold, but cannot include extraneous provisions that do not affect revenue or spending. Additionally, reconciliation legislation cannot increase the budget deficit, which will be an important consideration if Republicans use reconciliation to repeal or partially-repeal Obamacare as the Congressional Budget Office recently said repeal would increase the budget deficit by $353 billion over ten years.