September 18, 2015

International Affairs Budget Update, 9/18/15

Fall Outlook: What to Expect 

With Congress finishing its second week back from August recess, all eyes are on Capitol Hill as lawmakers work toward a spending bill to keep the government running past September 30th.  This week, President Obama joined a growing chorus of lawmakers who want to see an overarching budget deal to lift sequestration, similar to the one negotiated in 2013 by Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI)

But with just five legislative days before the end of the fiscal year, Congressional leaders must first avoid a government shutdown. To do so, and to create room to negotiate a broader budget deal, Congress is likely to pass a short-term Continuing Resolution (CR) to keep the government open, but contentious issues such as funding for Planned Parenthood threaten to derail such efforts. Over the next two weeks, here are several items to watch as the complicated process plays out.  

Issue #1: CR Content and Duration 

The content and duration of the CR are still unclear. If Congress passes a “clean” CR—one without major policy and funding riders—the International Affairs Budget would likely be funded at an annual rate of approximately $50.9 billion for whatever length of time the initial CR lasts.  As a reminder, this is slightly above both the House and Senate FY16 proposals and approximately $5 billion below the President’s request. The CR will also likely include a number of anomalies on various non-controversial issues. However, it is not expected to include a provision to reauthorize the Export-Import Bank (the highway bill remains the most likely vehicle for the Bank’s reauthorization later this year).   

There are two scenarios in play for the duration of the CR.  Negotiators are considering a four-to-six week CR that would fund the government into November and give lawmakers time to negotiate a broader budget deal, with potentially a second shorter-term CR needed to allow Appropriators to write their bills in accordance with the budget deal.  Another possibility is a three-month CR through mid-December, likely December 11th or 18th.

Issue #2: Contentious Political Issues

Tension between House Republican leadership and a small but vocal cadre of conservative House Republicans is rising, complicating efforts to pass a CR. While the House and Senate are scheduled to consider bills on Planned Parenthood funding, Rep. Tim Huelskamp (R-KS) told reporters that a stand-alone bill on the issue would be insufficient and that provisions to defund Planned Parenthood must be attached to a CR. This would all but doom the measure in the face of Democratic opposition. Further, Senator Ted Cruz (R-TX) is warning leadership to avoid all attempts to pass a CR that provides for Planned Parenthood funding.

Issue #3:  Lead Negotiators

While the Administration has indicated that President Obama would agree to a short-term CR, the President himself is turning up the heat for a broader deal. In a speech at the Business Roundtable this week, the President had strong words for Congressional Republicans. He said “My hope is that Congress aims a little higher than just not shutting the government down. That’s a good start, we’d like them to achieve that, but I think we can do better… After the last shutdown, both parties came together and unwound some of the irrational cuts to our economy and military readiness… That agreement expires in two weeks.” 

Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Harry Reid (D-NV) both support a short-term CR as a means to negotiate a longer-term solution later this fall—something that Senate Appropriations Committee Ranking Member Barbara Mikulski (D-MD) also supports. With regard to a budget deal, this week Senator McConnell said that Republicans will “inevitably” see a lifting of the 2011 Budget Control Act’s spending caps, something Democrats have repeatedly called for.  House Speaker John Boehner (R-OH) has yet to commit to the duration and contents of the CR but is talking to McConnell and holding numerous listening sessions with the goal of aligning his fractious conference around a strategy.