The omnibus is here! And some things to clear up about congressional budget politics.

Originally published at the Government Affairs Institute at Georgetown University

House and Senate leaders will push through an omnibus spending package this week. The bill combines 11 appropriations bills for the final months of the FY2017 calendar. Democrats walked away with some big wins in the omnibus. They struck over 100 policy riders, resisted non-defense cuts proposed by President Trump, managed to block funding for President Trump’s border wall, among other items.

However, their leverage in the budget process is being badly misunderstood. Many pundits are suggesting that fractured Republican politics are giving Democrats leverage. And while that certainly helps, it underestimates the institutional features in place that will bias budgets in favor of the minority party no matter which party is occupying it. In other words, it’s not just fractured Republican politics. It’s also existing law. So let’s look at the omnibus and how it shapes up, examine why Democrats were successful, and explain the state of play for FY2018.

The omnibus spending bill is the culmination of the 2015 Bipartisan Budget Act (BBA), negotiated by then-Speaker Boehner, Majority Leader McConnell, and then-President Barack Obama. In other words, the $1.07t funding level was negotiated more than 2 years ago. Democratic finger prints are all over this budget. To some degree the omnibus is not necessarily an example of Republican weakness. Rather, it’s an example of the fact that this deal was written 2 years ago when Democrats controlled the White House. The only reason we’re still talking about it is because after the November election, Republicans decided to put in a stopgap continuing resolution (CR) to allow President Trump to put his imprint on the budget.

That was a dramatic mistake for a couple of reasons. First, defense and nondefense numbers were already written in law by the 2015 BBA. So whatever imprint President Trump and the 115th Congress wanted to make on FY2017, they had to do it within the existing framework negotiated by the 114th Republican majorities and President Obama. If Republicans wrote a bill that broke those caps, it would trigger another round of automatic cuts. Any appropriations changes would at best play around at the margins because defense and nondefense numbers for this fiscal year are already set in law. You would need to write a new law to change them, a lift that would have required an enormous amount of political capital which simply doesn’t exist when Congress is also trying to rewrite the most substantial healthcare policy in a generation.

This limited the majority’s ability to reshape funding for new things. If they wanted to cut agencies’ funding to make room for other priorities, they’d have to do it through the 2015 BBA defense and nondefense partition. In other words, to make room for a border wall, they would have had to find it in the nondefense section of the budget. But making room for priorities even within the nondefense segment of the budget is very difficult.

This brings us the second problem Republicans faced for FY2017: all appropriations bills still go through a filibuster in the Senate. If they wanted to cut EPA, NIH, State, and other agency budgets to make room for a border wall, Republicans would certainly face a Democratic filibuster. This assumes that all Republicans would support deep cuts to other nondefense agencies, an assumption that ignores the strong bipartisan support for many agencies on the nondefense side. Simply gutting some agencies to make room for other priorities ignores the realities of appropriations politics in both parties.

All of this stems from the heart of the problem. Republicans cannot reorient government by working under old budget numbers. They need a new budget. This would normally make FY2018 a critical opportunity for Republicans to remake government in their vision. In a normal budget year, Republicans would write a new budget, boost defense spending and cut nondefense through the budget process, and then write their appropriations bills to those numbers.

The problem with this is this is not a normal budget year. The sequestration caps put in place by the 2011 Budget Control Act go back into effect next year, capping defense spending at $549b and nondefense spending at $515b. Put differently, defense and nondefense spending will get an across the board cut by $2b and $4b, respectively, if Congress doesn’t ease the BCA caps (for the third time). Republicans will have to amend sequester if they want to fundamentally restructure government spending.

The irony here is if sequester had not been allowed to take effect in 2013, Republicans would be in a very strong position to fundamentally reorder government spending. They could simply pass a new budget by majority vote and rewrite defense and nondefense budgets without Democratic input. Instead, Republicans handcuffed future Congresses by triggering sequestration. The budget process cannot amend the BCA. So Republicans will again have to change the law, which will require 60 votes in the Senate, which means Republicans will again be negotiating with Democrats in FY2018. And all of this is because they allowed sequestration to take effect in 2013.

Sequestration, a policy Democrats loathed when it went into effect, is ironically their greatest ally. It forces the new Republican majorities to rewrite the law before they can pass spending bills. That requires the support of at least eight Democrats in the Senate. Democrats’ leverage will continue to give them outsized influence in the budget and appropriations process in FY2018. As long as sequester is in place, it gives the minority party leverage in budget and appropriations.

If history is any indicator, this will push back negotiations all the way up to the October deadline where Congress will either address BCA caps and sequester head on or, more likely, negotiate another two-year deal. This week Congress will pass the easy bill. It gets much harder later this month when the FY2018 budget cycle starts.

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Desperate Times Call for Desperate Measures: CR edition

Next week, the government will run out of money to stay open. And in typical fashion, Congress has left itself an insanely small window to pass a continuing resolution (CR) to keep it functioning. (If the process plays out normally, the Senate will have approximately  5 hours to spare before the government shuts down. This is another way of saying the process will in no way play out normally). But there’s a huge difference this time around, this CR debate illuminates a deep distrust within the Republican Party.

Like other recent CR debates, members are floating policy riders in exchange for their vote. Sanctuary cities, a border wall, and, for a brief time, Planned Parenthood have all reared their heads during debate. The still unanswered question is whether these riders will be attached to the CR Congress must pass next week.

But beyond the immediate question, that these riders are even being floated is amazing in its own right. Riders like these were common the previous 6 years. In Congress if you can’t pass something on its own, you look for a vehicle to attach it to and force the opposition to accept the rider to pass the bill. And for the last 6-years, bills to fund the government or raise the debt ceiling became the must-pass vehicle of choice. Using that leverage, conservatives routinely attached controversial policy demands to various must-pass appropriations bills. Riders to repeal or defund Obamacare shut down the government in 2013. A rider to undo President Obama’s immigration order caused a very short shutdown in 2015. Some version of these shutdown threats have occurred in nearly every appropriations cycle since 2011.

These are desperate legislative tactics, used in situations when one party or faction wants to force a vote they otherwise cannot. But why is this happening again? It made sense in prior congresses when Democrats controlled the Senate and/or White House, and the Republican House forced them to either balk or vote on issues they otherwise wouldn’t have. But with Republicans in full control, why is Congress replaying the greatest hits in obstructive/destructive legislative tactics?

If these issues were priorities, Republicans could simply try and pass them. But that’s the problem. For many, particularly in the House, members aren’t getting their opportunities to address the bills or issues they believe are important. And as a result, they are again turning to desperate tactics to force votes.

The broader problem here is that the current institution isn’t designed for fractured internal party politics. Over the last several decades, the House has increasingly become a top-down institution. Over the course of decades, Speakers have played an increasing role in floor debate, committee assignments, committee activity, and drafting legislation. What this has meant is a decreasing role for rank-and-file members in the legislative process. This type of institution is great if the members in it agree on the leader’s direction. It is not great if there is significant disagreement in the ranks. So while this is not an inherently bad thing, in a time of intra-party dispute, we are currently observing the consequences. It can derail legislative negotiations, kill political capital, and otherwise render the president’s agenda dead-on-arrival.

Without a full-throated committee process acting as a sounding board for the factions in the Republican Party, Congress is depending on leadership to fill the void. Passing anything, major legislative rewrites or routine bills, now rests on Speaker Ryan’s ability to function as the Republican arbitrator. In a time of political upheaval in both parties and the country writ large, we have to wonder whether any one leader is up to that task. It clearly wasn’t during the AHCA debate. Next week will test whether it’s possible on what should be a routine legislation.

Regardless, the fact that these riders are being floated means there remains a deep distrust between the leaders of the Republican Party and its rank and file. After seven years, this problem looks more systemic than personal.

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The legislative filibuster isn’t going anywhere any time soon

It’s a nuclear week in the Senate. Majority Leader McConnell has hinted that he has the votes to go “nuclear” on Judge Gorsuch’s nomination to the Supreme Court. In effect, McConnell would invoke the same process then-Majority Leader Harry Reid used in 2013 to change the Senate’s interpretation of Rule XXII. The effect would reduce the cloture threshold to break a filibuster on SCOTUS nominees from 60 to 51.

This change affects the final 9 judicial seats not already confirmed by a strict majority thanks to the 2013 nuclear option. These 9 seats are very important. And you can expect a fundamentally different style of politics on Supreme Court nominees for the rest of our lives. But this is not a fundamental change to the Senate. Procedurally speaking, it’s actually quite limited.

The broader question is will this change create a slippery-enough slope to kill the legislative filibuster? In the short-term: no. In the mid-term, also probably no. Short of something extraordinary pushing Senate majorities over the edge (maybe not that far after all), it’s likely here to stay for a while. Why? The filibuster empowers all senators. It gives senators – majority and minority alike – the ability to affect all policies that come before the Upper Chamber. If a senator doesn’t like bill language, they can filibuster, force an amendment, force a compromise, and otherwise alter the text and intent of that legislation. If a bill adversely affects their state, they have significant leverage to kill it or at least mitigate its impact.

The filibusters on judicial and executive branch nominees offered a similar power. The president had to consult the minority before making a nomination. But historically speaking this is not often a controversial process, even in the post-nuclear Senate. For example, of the 23 judges confirmed by the Senate from April 2015 to January 2017, only three received more than 10 votes against. In the 113th Congress – the original nuclear Senate – there were more judges confirmed by voice vote and unanimous support than there were votes that garnered even a little opposition. Party line votes on judicial nominees are not the norm. Nominees confirmed unanimously and voice vote are far more common.

What this tells you is senators do not consider confirmation votes critical to their reelection, at least not to the same degree as legislation. Some confirmations matter a great deal. At some point in history, a confirmation vote surely affected a senator’s reelection. But those cases are rare. The overwhelming majority of senators who voted for the current Supreme Court justices remained in the Senate after their votes.  And if voting patterns indicate how important confirmations are to reelection, most senators, most of the time, have not considered them anything close to a career ender.

In short, there’s a reason the legislative filibuster has a special exemption. Giving up the ability to affect legislation would be the equivalent of a majority of the Senate (or at least 50) giving up what makes being a senator cool. Many, if not most, aren’t happy they are giving up power on nominations. The ability to force presidents to moderate their choices for someone more personally appealing is nothing to scoff at. However, the individual power to affect policy has defined the Senate. It is a fundamentally different power. Majority Leader McConnell doesn’t have the votes to nuke the legislative filibuster. And in all likelihood, he hasn’t even seriously considered it.

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Is Speaker Ryan leading too much?

The debate to repeal and replace Obamacare was always going to be a serious test for congressional leaders. Reorganizing an eighth of the economy has massive ramifications for communities and states of every political stripe. Now, a week into the formal House debate, observers are getting a sense of how leaders are handling the bill. So far, it isn’t good.

With the exception of the hardcore party loyalists, Speaker Ryan is facing opposition from basically every angle. Hospitals, doctors, insurance companies, conservative groups from the mainstream to the far right, the AARP, and all Democratic affiliated groups oppose the bill. At least nine Senate Republicans (Capito (WV), Cassidy (LA), Collins (ME), Cruz (TX), Heller (NV), Lee (UT), Murkowski (AK), Paul (KY), Portman (OH)) have voiced serious concerns about it. And within Ryan’s own caucus, the House Freedom Caucus vocally opposes it. It’s possibly more difficult to find people who like the bill.

Ryan seems to be mostly alone on this bill. Very few members publicly support the plan. The committees of jurisdiction made no changes to the bill after 45-hours of amendment and debate. This is basically unfathomable unless: leadership assured members on the committee they would address their concerns before/during floor debate; leaders pressured members to push the bills through without changes; or, both. All of this indicates a heavy leadership hand. Ryan has decided to steer this ship and he is trying to bring his reluctant members along for the ride.

There’s a perpetual myth that congressional leaders are the thought and opinion leaders of their caucus, that they decide where the party is going and get their members on board. In reality, their ability to lead is grossly overblown. Yes, there are avenues for leaders to choose a path among multiple options. That’s a major power in the Capitol. But trying to lead a caucus where it doesn’t want to go usually go ends badly for the leader.

Successful congressional leadership more often pragmatic. It entails allowing members to shape ideas rather than giving them ideas to follow. Even in ideologically similar caucuses, like the polarized parties we see today, members represent dramatically different constituencies facing very different realities. Rural California is very different from rural Ohio, suburban Florida, Wyoming, or middle Pennsylvania. Congress doesn’t think nationally. This is why Congress will never pass the “best” policies (as prescribed by many think tanks, policy wonks, etc). It is only a national legislative body in the sense that hundreds of local and state representatives gather there. But once in Washington their mentality doesn’t fundamentally shift. They continue to think locally and they should. If they prioritize national policy over their constituents’ interests, that is their prerogative. It’s also their constituents’ prerogative to unelect them.

This presents an enormous challenge for congressional leaders who are as close as it gets to national legislator as members of the legislative branch can get. They do think nationally about policy, politics, elections, etc. But throughout history parties have pushed back on leaders who lead too forcefully. Speaker Reed (R-ME) (1889-1891, 1895-1899), among the most powerful and influential speakers in history, lost his job when he forced votes on his conference and blocked bills they supported. This led to his abrupt retirement in 1899. Speaker Cannon (R-IL), possibly the most influential speaker in history, lost the majority of his power in 1910 by failing to accommodate moderate Republican members, predominantly from the Midwest, on issues like trade and tariffs. Thinking nationally has its drawbacks.

In contrast, instances of successful leadership highlight not policy brilliance but strategic brilliance. This is less about presenting the best ideas, and more about finding the right mix of ideas to get it through the process. For example, Pelosi’s leadership was critical when passing the Affordable Care Act in 2010. But her role was important not because she had the best ideas. It was because she organized the ideas of her caucus in a way that could pass. She was able to get her members to pass the law in two phases. First, they had to swallow hard and pass the Senate version of the ACA, which they hated. She then used the Rules Committee to blend a patchwork of bills put out by the Energy & Commerce, Ways & Means, and Education & Workforce committees, with some language that satisfied moderates in her caucus to amend the first bill. Only then did the ACA truly pass the House. Speaker John Boehner brilliantly navigated a variety of policy problems. For example, in 2013 he faced an unexpected revolt against the must-pass FARRM bill. He regrouped, repackaged the FARRM bill into two separate bills that satisfied his members, passed them separately, and brought them back together in conference with the Senate in an unusual, but remarkably inventive way.

The current House process – where bills are largely conceived, drafted, and pushed out of leadership offices by leadership staff – is unusual in American history. It’s not novel to Ryan’s tenure (you can trace this all the way back to Speaker Gingrich). But it’s clear Ryan is using his position and the AHCA debate to flex his wonk muscles as his party’s leading policy mind. However, this isn’t a speaker’s natural role. It’s trying to president from the speaker’s office. Coupled with the fact that it’s the wrong venue, presidential leadership in Congress is another overblown phenomenon.

Either Ryan is going to force ideas on members who don’t want them, or Republicans will not be able coalesce behind a healthcare replacement bill at all, in which case he’s trying to make something out of nothing. In either case, there’s a lot of leadership where it may not be wanted. And in the words of former Speaker Boehner, a leader without followers is simply a guy taking a walk. It’s still very early, but Speaker Ryan is currently on a walk.

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Future headline: President Trump’s budget proposal re-breaks already broken appropriations process into itty bits… And that has other consequences.

That’s not likely to be the actual headline but it won’t be far off. On Tuesday, President Trump outlined his budget proposal which will include $54 billion in additional defense and homeland security spending. Those increases are coupled with deep cuts at EPA and the State Department among other nondefense agencies. On the one hand, Trump is following through on his promise to enhance the military and ramp up immigration enforcement. On the other hand, it guarantees a broken appropriations process. The chances of this budget passing are not quite zero, but they’re really close.

Sequester is the big sticking point. Following the Super Committee’s failure, this policy was triggered in 2013, capping discretionary spending for defense and nondefense until 2021. These are separate caps. The FY2018 defense cap is $549 billion. Nondefense spending cannot exceed a $515 billion cap. If Congress passes an appropriations bill(s) that exceeds either cap, it would trigger another sequester cut to remove the breach. Living under the caps isn’t really an option either, since the FY2018 caps are actually $2 billion and $4 billion below the FY2017 numbers for defense and nondefense, respectively.

By only proposing a repeal of the defense cap, the President’s budget basically guarantees stalemate. Proposing a budget that overtly violates the defense sequester cap means Congress will need to revise sequester. This is not something that can be done through reconciliation. As a result, Democrats have enormous leverage in this process. So if Republicans want to pursue some version of increased defense spending outlined by the President, Majority Leader McConnell will need to break a filibuster by getting eight Democratic votes. He may be able to peel off a few votes from the other side of the aisle, particularly from deep-red state Democrats up for reelection in 2018 (WV, ND, MT), but he doesn’t have the votes to break a filibusters on the defense sequester or appropriations bills.

Until Republicans cave and allow increases in nondefense spending in addition to increases for defense the appropriations process faces a death-by-filibuster. The game will unfold in a very familiar way. House Republicans will refuse increases to nondefense. Senate Democrats will refuse increases to defense unless nondefense is increased as well. And they will march down the path of “a shutdown is coming” until both caps are revised or (in an optimistic world that likely doesn’t exist) repealed.

This is entirely predictable.  It’s a replica of the broken appropriations processes from 2013 and 2015. This is why the President’s proposal is not dead on arrival in Congress. It is dead before it even gets there.

We have a lot of experience with this budget game. Political posturing delays compromise until the last second when a deal is finally struck. The consequence for playing it again comes at the price of legislative time. Rehashing old budget disputes is a time consuming process in an institution where time is not abundant. Introducing a budget that guarantees a broken appropriations process will push back other Republican priorities. Tax reform, entitlement reform, infrastructure bill, altering financial regulations, amending EPA activities, energy regulations, and more will fall further down the legislative calendar. If those bills are pushed into the 2018 election year, the less likely they are to pass as election politics begins to consume the chambers.

President Trump’s budget proposal will keep his campaign promises but guarantees budget and appropriations dysfunction. The window of opportunity in the 115th Congress is fairly small and will only get smaller if sequester remains a sticking point between the House and Senate. Unless Republicans compromise quickly, many of their big proposals could miss the window of opportunity. If this game plays out like it did in previous years, the promises made on the campaign trail may be kept but will be more symbolic than substantive.

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On to Reconciliation! Republicans have a plan but probably won’t follow it.

The Senate passed a budget yesterday. It lacked some of the typical hallmarks of a budget resolution. Namely, the chamber did not debate in any great detail discretionary spending numbers. This budget is meant for one purpose and one purpose only: repealing the Affordable Care Act (ACA).

Following the campaign congressional Republicans set out on an ambitious path, planning to repeal the ACA within the first month of being in office. Therefore, the budget passed last night includes reconciliations instructions, which puts in motion a sequence of events that need to occur in rapid succession if they want to meet their self-imposed deadline. In the case of the ACA, this means instructing the Finance Committee and the Health, Education, Labor and Pension Committee to find at least $1 billion in savings (each) over a 10-year period, and to submit those bills by January 27th. Once those committees produce those bills, it will be introduced on the Senate floor to begin the non-filibusterable reconciliation process. Only a simple majority is needed to pass this legislation.

In the midst of this debate you’ve likely heard of several Republican senators concerned with this plan. Currently, at least four Senate Republican have echoed the President-Elect’s desire for a repeal-and-replace strategy. While the repeal piece of the plan is fairly straight forward (they already passed this legislation last year), the replace part of the plan has major obstacles. The most notable obstacle is the fact that Republicans have yet to produce a replacement bill. This takes a lot of time.  The two Senate committees tasked with drafting and submitting repeal legislation are also responsible for providing guidance in a replacement bill, receiving input from experts, drafting that legislation, holding hearings, and potentially marking-up and reporting that legislation to the floor. Not to mention, all of this has to take place in the House as well. This takes a lot of time and there are only so many staff resources available.

At worst, they won’t be able to agree. At best, this likely takes well over two weeks, which means Republicans will miss their deadline.  This is one reason Senators Corker (R-TN), Portman (R-OH), Collins (R-ME), Cassidy (R-LA), and Murkowski (R-AK) introduced an amendment to push back the reconciliation deadline from January 27th to March 3rd to allow more time for the Senate to consider replacement legislation. (They later withdrew the amendment.)

The good news for Republicans is that missing the deadline will not strip the reconciliation bill’s privileged status. That’s another way of saying it does not matter if they miss the January deadline. The eventual bill can still be brought up and is not filibusterable. In fact, this happened last year when Republicans missed their self-imposed deadline to repeal the ACA in July 2015. The bill was not even introduced until October and was not passed by both chambers until January 2016. It’s also possible that Republicans move forward on the FY2018 budget, which will likely include reconciliation instructions for tax reform, entitlement spending, and other fiscal priorities, without affecting the FY2017 instructions to repeal the ACA.

If you’re confused by Congress’s disregard for their own deadlines, that’s okay. It’s confusing. It’s also pretty normal for Congress; a tradition of sorts. Regardless, the budget the Senate passed, though not a law, carries enormous weight and importance, even if they blow past their ambitious deadline.

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Ominous Omnibus: A CR is coming.

With elections over, lawmakers make their way back to DC today. They will be faced with several pieces of important business, perhaps none more important than government spending. The current continuing resolution will expire December 9th. There was some expectation that omnibus legislation was being prepared. But with an unified Republican government around the corner, that has almost certainly changed.

Prior to the election, congressional leaders were preparing an omnibus or a few minibuses (packages of 2 or 3 appropriations bills) to fund the government at the level stipulated in the 2015 Bipartisan Budget Act (BBA). All pre-election signals indicated Congress was heading in this direction. The 12 appropriations bills that emerged from committee met the FY2017 BBA numbers, $1.07 trillion. It was widely expected that the House and Senate, with an incoming Democratic administration, would write their bills to the number, likely finding Democratic votes to push it across the finish as they had in previous bipartisan agreements.

That was before the election. Republicans sweeping victory last Tuesday has changed everything. And it starts with the feasibility of the speakership under unified government.

The biggest change is Paul Ryan’s (now continuing) speakership. Under a Democratic administration, the Speaker of the House has become the least wanted job in Washington. Speakers have been forced to negotiate with Democratic president to strike deals their own conference will not support. Boehner and Ryan have both been forced into this position since 2011. And it is a big reason why Ryan and his predecessor faced coup attempts soon after they took the top job. The balance between governing (such as passing spending bills, authorizations, etc) and representing the conference in negotiations was impossible. Governing meant losing their job. Keeping their job meant not governing. If Ryan had any political ambitions beyond the House, the speakership would have been catastrophic under divided government. Four years of presiding over a conference trying to overthrow him would consume his political career, tainting any future ambitions he may have had.

This dynamic changes with a Republican president. Ryan will now have a president who will sign spending bills at Republican levels. Further, he has a president who will likely sign all of his major policy proposals. Republicans will repeal Obamacare, enact tax reform, among a whole host of objectives they’ve failed to accomplish under divided government. This not only makes the speakership a much more fun job. It also means it is no longer a career killer.

With this in mind, the budget picture comes into clearer focus. Speaker Ryan could not pass a budget this year because he failed convince the House Freedom Caucus (HFC) to support the 2015 BBA. The HFC argued they didn’t support those numbers when they were passed. Therefore, they would not support appropriations bills brought to the floor at those levels. This, along with poison pill amendments from Democrats, killed the appropriations process in the House. It’s a big reason why Congress finds itself under a looming CR deadline.

If Paul Ryan really wants to be speaker in the 115th Congress, he needs the support of the politicians who refused to vote for his budget. If they won’t support an omnibus at the $1.07 trillion number outlined in the 2015 BBA, you can bet he will not push it in this lame duck session. Speaker Ryan’s political career rests on their shoulders. And for now, that means that omnibus legislation is likely in the trash. And CR legislation is beginning to be drafted.

With a new Congress and a new president, Speaker Ryan, Majority Leader McConnell, and the Trump administration will wait until March of next year to rewrite government spending. At that time they will have to address the debt ceiling and probably sequester if the current budget caps prevent them from enacting their policy visions. The timing may change. But the beginning of next year will set a new course for government spending.

Regardless, in the short term the Bipartisan Budget Act of 2015, negotiated by Boehner, McConnell, and Obama is gone. And any chance at omnibus legislation is likely gone with it.

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