Senate Passes Budget/Debt Limit Deal, Heads Out for Recess – UPDATED

Senate Passes Budget/Debt Limit Deal, Heads Out for Recess – UPDATED

Today the Senate passed the 2-year deal to raise budget caps and suspend the debt limit until July 2021, past the 2020 elections. It is an important step – but only a step – towards settling FY2020 appropriations.  Passing the bill was one of the Senate’s last acts before leaving for its August recess.  The House and Senate will return for legislative business on September 9 when they will have to finalize the FY2020 appropriations bills and hopefully, but not certainly, avoid a Continuing Resolution (CR) when FY2020 begins on October 1. [UPDATE, August 2:  President Trump signed the bill into law this afternoon.]

The vote was 67-28.  The no votes were cast by 23 Republicans and 5 Democrats. Five Senators did not vote, including four who are running for President.

The deal allows more spending for defense and non-defense programs above caps that were set in the 2011 Budget Control Act.  The deal will add $1.7 trillion to the deficit over 10 years above what it would have been if the caps were enforced.

Sen. Mitch McConnell (R-KY)

President Trump and Senate Majority Leader Mitch McConnell (R-KY) endorsed the deal, which was negotiated by Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi (D-CA).  They encouraged Republicans to vote for it even though Trump and many Republicans campaigned on lowering the deficit.  Instead, it has risen dramatically since he took office in part due to his tax cuts. This deal will add more.

The White House projects that the deficit is on track to reach $1 trillion this year.  That actually is $91 billion less than its March 2019 forecast, but still much higher than when President Obama left office ($665 billion).

With the deal in hand, Senate Appropriations Committee Chairman Richard Shelby (R-AL) will begin marking up the 12 regular FY2020 appropriations bills.  The House has passed 10 of them, but Shelby was waiting to find out what the top-line would be before taking any action.

That will now have to wait until September although staff will be working on the bills throughout the recess.

Despite the long term effect on the deficit, sighs of relief could be heard throughout Washington for resolution to the short term issues of FY2020 and FY2021 funding and suspending the debt limit.

It does not, however, answer questions about whether Congress will provide the $1.6 billion supplemental for NASA’s Artemis program or anything else about NASA, NOAA or DOD funding.  Those details cannot be determined until the Senate acts on its version of the appropriations bills and a compromise is reached with the House. The House did not include any of the Artemis funding in its bill.

Whether all 12 appropriations bills will be enacted by October 1 remains an open question.  Myriad funding and policy issues could derail any of the bills.  For example NASA’s funding is in the same appropriations bill as the Department of Commerce that is carrying out the 2020 Census, which has been controversial.

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