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Nick Wakeman

How ugly will the budget battle get?

I still don't think the government will shut down at midnight on Thursday, but the passage of a bare-bones continuing resolution is getting more and more complicated.

The talk is that the fifth CR of fiscal year 2018 will keep the government open until March 22. But some House Republicans are pushing for funding for the rest of the year that includes a defense increase. They want DOD funded at the levels approved in the 2018 National Defense Authorization Act.

That might get out of the House, but Senate Democrats will likely vote that down unless there also is increased spending for civilian programs.

UPDATE: On Wednesday, Senate leaders with both parties hammered out an agreement that included increases for both defense and civilian spending and expanded budget caps for the next two years. House conservatives are balking, however.

Democrats also are pushing for at least a resolution to the Dreamers portion of the immigration debate. There have been bipartisan proposals but they go nowhere with the White House.

The White House remains a wild card. Will President Trump sign a bill without funding for the border wall? He seems less and less likely to accept a compromise.

Of course, looming over all of this is the partisan rancor that has only worsened with the release of that Devin Nunes memo and Special Counsel Robert Mueller’s continuing investigation. And now the White House is considering whether to approve the release of the Democrats' rebuttal memo to the Nunes memo.

Under the best of circumstances, this would make getting an appropriations deal done all the more challenging and these are not the best of circumstances.

Other issues that will make things harder are coming as well.

The Trump administration is supposed to release their proposed budget for fiscal 2019 on Feb. 12. But we don’t even have top line numbers for the fiscal 2018 budget.

The fiscal 2019 budget also will be the first budget proposed after the tax cuts, so the assumptions and projections about revenues and deficits going forward will surely set off more partisan debates.

Those tax cuts are already having an impact as revenues have dropped more quickly than anticipated. This will force Congress to take some sort of action on the debt ceiling sooner, rather than later. Mostly likely in March.

So putting immigration and any other initiative to the side, Congress and the White House face three very heavy lifts:

  • Fiscal 2018 spending
  • Fiscal 2019 budget resolution (still not passed for 2018)
  • Increasing the debt ceiling

Oh, and let’s throw in one last thing -- it’s an election year.

Going back to my opening line, I don’t think there will be shut down this week but I don’t expect much progress to a final resolution either. Things are only going to get uglier.

Posted by Nick Wakeman on Feb 06, 2018 at 11:08 AM

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