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FixGov

Five things to know about the budget deal

Molly E. Reynolds

On Monday night, the White House and congressional negotiators released a tentative budget agreement that would “clean the barns” before outgoing Speaker John Boehner (R-OH) leaves Congress at the end of the week. Here are five things to know about what it looks like, how it stacks up against the past, and where we go from here:

1. Offsets: something old, something(s) new

In mid-September—five weeks and two presumptive new Speakers of the House ago—I outlined a range of ways that Democrats and Republicans might pay for a budget deal that relaxed the spending limitations created by the Budget Control Act (BCA) of 2011. Many of these ideas had already been negotiated by a bipartisan team in the Senate as a way to partially pay for a reauthorization of the Highway Trust Fund.

Of these, only selling oil from the Strategic Petroleum Reserve made its way into Monday’s deal. A similar provision had also been agreed to by members of both parties in the House as part of a measure encouraging biomedical innovation (the 21st Century Cures Act), making it especially attractive for inclusion. Notably absent from Monday’s package, however, are the other offsets agreed to as part of the Senate’s highway negotiations. The Highway Trust Fund still needs to be extended, and Senate Majority Leader Mitch McConnell (R-KY) has long been on record as preferring to reserve the previously-negotiated pay-for provisions for that purpose. (The ability to engage in more than one round of SPR sales, moreover, means that it may still be available as an offset for a highway measure.) Add in the fact that an international tax deal—considered the other viable alternative for offsetting a highway package—has stalled in the House and it’s no surprise that negotiators chose to introduce different changes into the budget deal.

2. The deal takes advantage of the full range of tactical levers available—even ones negotiators rejected in the past.

One area of compromise in the deal involves how much of the Defense Department’s funding to place in a special “overseas contingency operations” account that is exempt from the BCA’s caps. The Obama administration had opposed increasing the Pentagon’s budget in this way a “budget gimmick” and the president vetoed a measure authorized military funding last week in part because of its reliance on OCO funds.

The budget deal, however, splits the difference between the parties’ preferences. The measure vetoed by Obama last week would have authorized $38 billion more in defense spending than his original proposal for 2016 via the special, emergency designation. This week’s budget deal increases OCO spending over the president’s request by only $8 billion for 2016. By designating some of the defense spending increase as OCO, negotiators reduced the total offsets they needed to identify.

Using the emergency spending designation as safety valve in budget negotiations, moreover, is not new. In 1991, President George H.W. Bush asked Congress for roughly $3.6 billion to cover residual costs of Operation Desert Shield/Desert Storm and aid for state and local governments after several natural disasters. He indicated, however, that roughly $550 million of the package was to be “non-emergency,” requiring offsets. Both chambers’ Appropriations Committees responded by adding provisions to help farmers and ranchers and low-income children, more than doubling the size of the bill to roughly $7.5 billion—all to be designated as emergency funds. Eventually, the two sides compromised, with congressional Democrats getting some, but not all, of the discretionary funding they wanted; at the same time, they forfeited the new spending on children’s programs and had to agree to let a portion of the bill (roughly $900 million) remain unspent unless the president subsequently requested it. This agreement to have both parties designate most of the funds as emergency up front, but reserve some for possible future request by the president, provided both sides with the necessary political cover.

3. Attaching a debt ceiling increase to a broader budget deal is not unprecedented.

Over the past several weeks, the White House has repeatedly reiterated its demand that any increase to the debt ceiling be “clean” rather than including the associated spending reductions demanded by some congressional Republicans. On Monday, White House press secretary Josh Earnest deflected a reporter question about whether merging the debt ceiling change with a broader budget deal counts as a “clean” increase, arguing that it “can sometimes be a useful strategy” to fold raising the debt limit in with other legislative priorities.

Indeed, while the debt ceiling is generally raised via standalone legislation, it is not at all unprecedented for alternative procedures to be used. According to the Congressional Research Service, since 1993, Congress and the president have enacted 20 measures adjusting the debt limit. Five were enacted as standalone legislation. Eleven were included in broader bills—including two that were passed as part of fast-track budget reconciliation measures. (The final four were authorized using a tactic known as the Gephardt Rule, in which a debt limit increase was considered adopted once Congress had completed action on the congressional budget resolution.)

4. It demonstrates one of Congress’s greatest negotiating strengths: the ability to logroll across virtually everything in one bill.

In a 2013 report for the American Political Science Association on deal-making in Congress, my colleague Sarah Binder and her co-author Frances Lee observed that one of the institution’s assets is its “broad—perhaps limitless” jurisdiction; they quote former Rep. Barney Frank (D-MA) as acknowledging that “anything can be the basis of a deal.” It’s hard to imagine a better illustration of this point than the package rolled out this week, which combined some Democratic priorities, including equal relief from the BCA caps for both defense and non-defense discretionary spending, and some Republican ones, such as “entitlement reform” in the form of changes to the Social Security Disability Insurance program. Throw in an increase to the debt ceiling, and the package is a textbook example of a congressional logroll.

5. The new Speaker will have to carry the ball across the finish line.

On the spending side, the deal announced Monday sets out a top-line framework for expenditures through October 2017. What it does not do, however, is push actual government dollars out the door to pay for discretionary federal programs—including major health, education, and science initiatives—after December 11, when the temporary funding measure passed at the end of September expires. Under the terms of the deal, members of the House and Senate appropriations committees will have until that December deadline to choose exactly how to spend according with the broader framework.

Settling the debate over top-line numbers will make this process easier, as it resolves a principal axis of conflict between Republicans and Democrats: whether to relax the BCA’s spending caps for both defense and non-defense spending. But, as is often the case with Congress, the devil may be in the details. Indeed, in several of the most recent “shutdown showdowns,” much of the conflict was driven not by disagreements about overall budget numbers, but by attempts to use the appropriations process to achieve particular policy ends, including changing the Affordable Care Act (October 2013), halting President Obama’s immigration action (December 2014), and limiting federal funds for Planned Parenthood (September 2015).

This week’s budget agreement is being billed by some as “Murray-Ryan 2.0” for its combination of relaxed BCA caps and an assortment of offsets. Congress made it through negotiations over the omnibus appropriations bill enacted in January 2014 in the immediate aftermath of that agreement with minimal drama, and at this point, there’s little reason to expect a different outcome this time around. Actually keeping the lights on for Christmas, however, will be among new Speaker Paul Ryan’s (R-WI) first tasks on the job, and his strategy may provide valuable insight into his approach to the speakership.

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