Latest Budget Update

January 11, 2018 NTEU280

Here's the latest from our Capitol Hill budget contact....

It looks to me like key Republicans finally accept that they will not get the defense spending they want without some agreement (however narrow) on DACA. A remarkable number of Republicans now are pushing for some version of a DACA fix. This has helped Democrats maintain their leverage in funding negotiations. Not sure what impact yesterday's court ruling will have if any. Assuming DACA is dealt with satisfactorily, Schumer and Pelosi continue to tout parity as "their other top priority" in budget talks. My ears are tuned for any fudging on this. So far, they do not seem to be lowering the bar or preparing us for disappointment. They don't seem to be waffling in public statements or private discussions. That said, most Dem staff I have spoken with will be amazed if Schumer and Pelosi actually achieve something close to real parity. Parity in this context depends on what gets counted and how spending is assigned to the defense category vs. the NDD category. Rs want to count additional border security costs and disaster aid against the NDD ledger, so equal nominal increases for defense and non-defense could still result in downward pressure on science funding. This is the reason for my urgent call for AGU grassroots action now. So far, neither Schumer nor Pelosi has taken the possibility of a shutdown over parity off the table They don't want a shutdown, but seem ready to trigger one if Rs don't agree to something "resembling parity". Rs seem more nervous about the possibility of a shutdown than Dems. Cautious and experienced legislators from both parties are concerned about how hard it might be to end a shutdown regardless of which side is blamed for causing it. They may have a point. Trump could see a prolonged shutdown as a great way to change the subject away from his fitness for office. Most voters don't experience much change during shutdowns. Mulvaney could see this outcome as providing additional justification for the aggressive spending cuts mandated by his OMB FY 2019 budget proposal. Continued spending at FY 2017 levels will exceed the BCA caps for FY 2018, and so will trigger sequestration. Defense, NDD, and Medicare (Medicare only up to 4%) will be cut in this required across-the-board sequester. Neither Rs nor Ds want this. For this reason, some suspension of the BCA sequester requirement probably will be included in whatever CR they come up with to get us past Jan 19th. There is some discussion among budget negotiators of eliminating or suspending the caps in the BCA altogether. This has been a priority for appropriators since that law was passed. However, Schumer and Pelosi know it is the caps in the BCA that provide the basis and precedent for their parity demand. Dropping the BCA caps would lead to more defense spending offset with greater NDD cutbacks to appease deficit hawks and fiscal conservatives. Finally, there is concern if Trump will sign another CR. He is infuriated by the Wolff book quote from Republican leaders indicating he will sign whatever they put in front of him. Trump is in such a strange mood these days it is hard to guess what his response might be. Much could depend on whether he perceives a shutdown as a win or a loss for his presidency. A veto would certainly demonstrate his power and authority, as well as put Congress in a vice. HHS and NSF are preparing for another CR. Homeland Security (Kelly's old turf) is expecting a CR but actively preparing for a shutdown. What are you hearing about other agency plans?