Five Compromises Underpin Spending Deal Struck by White House, Democrats
24 July 2019 - 2:12AM
Dow Jones News
By Andrew Duehren
Congressional negotiators and the White House reached an
agreement Monday evening to raise federal spending over the next
two years and suspend the debt-ceiling until the end of July 2021.
Neither Republicans nor Democrats won everything they wanted.
Here are five key compromises in the deal:
Nonmilitary Spending
The bill, which allows for more than $2.7 trillion in
discretionary spending over the next two fiscal years, sets
domestic spending levels below what House Democrats had initially
sought this year. In the spending legislation they passed in their
own chamber, Democrats set nonmilitary spending at $639 billion for
fiscal year 2020, which begins on Oct. 1.
The agreement reached yesterday provides for $632 billion in
nonmilitary funding for next fiscal year, with $2.5 billion of
those funds designated for conducting the decennial census. By
fiscal year 2021, domestic spending will grow to $634.5
billion.
Military Spending
House Democrats aren't the only ones accepting less money for
their favored priorities. Under the deal, the military will receive
$738 billion in overall funding next fiscal year -- below the $750
billion Senate Republicans had proposed in the defense
authorization bill they passed earlier this year. But $738 billion
is also above the $733 billion to which Democrats had agreed in the
House.
While Sen. Jim Inhofe (R., Okla.), the chairman of the Senate
Armed Services Committee, said in a statement he was "disappointed
that the top-line total for defense funding isn't $750 billion," he
added that the compromise was critical to pass.
The End of Spending Limits
The legislation doesn't extend the fiscal controls enacted in
2011 to reign in federal deficits beyond fiscal year 2021. After
that they will expire. During the negotiations, members of the
Trump administration had proposed extending the spending limits to
achieve future savings as part of the agreement.
In the end, the bill sets spending about $320 billion above the
limits set in the 2011 law. That will amount to a nearly $50
billion increase next fiscal year compared with this year.
"Democrats have achieved an agreement that permanently ends the
threat of the sequester," House Speaker Nancy Pelosi and Senate
Minority Leader Chuck Schumer (D., N.Y.) said in a statement,
referring to the spending limits set in the 2011 law. "We are
pleased that the Administration has finally agreed to join
Democrats in ending these devastating cuts."
Adjustments
In their own spending legislation, House Democrats had set aside
$7.5 billion to pay for conducting the census in 2020, hoping to
adjust overall spending levels for that program in particular. The
deal does include a one-year adjustment for the census, but it is
for $2.5 billion, below the level initially sought by
Democrats.
Spending Cuts
At one point in the talks, the Trump administration sent to Mrs.
Pelosi a list of nearly $574 billion in potential cuts to offset
the cost of the agreement. The administration indicated it wouldn't
accept any agreement that didn't make at least $150 billion in cuts
to pay for the two-year deal.
The bill will achieve roughly $77 billion in savings to offset
the cost of the deal. Instead of making new cuts, it does that by
extending mandatory spending limits and customs fees beyond fiscal
year 2027 -- both routine provisions have been used to offset the
cost of previous budget deals.
Write to Andrew Duehren at andrew.duehren@wsj.com
(END) Dow Jones Newswires
July 23, 2019 11:57 ET (15:57 GMT)
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