Friday was a busy day in Washington, DC. The Senate was preparing to vote on a major tax bill that was still being negotiated at the same time former National Security Advisor Michael Flynn was pleading guilty to lying to federal agents as part of a deal to cooperate with Robert Mueller’s probe into the Trump campaign. And looming over all of this is yet another potential crisis: On December 8, the federal government will run out of money unless Congress acts fast.
The bad news is that legislators have yet to rally around even the outline of a plan to keep the government going past next Friday. There’s a good chance, the experts I’ve spoken to agree, that we’ll still manage to avoid a shutdown—but the country could be looking at weeks of short-term fixes, brinksmanship, and stress.
The government was initially set to run out of funding on September 30. But at the start of that month, Donald Trump struck a surprise deal with Democratic leaders in Congress to fund the government through December 8. The plan at the time was ostensibly to free up time to work on tax reform, handle any other pressing issues, and gradually work out a deal to fund the government through September 2018. Then Republicans wasted September on a futile attempt to repeal and replace the Affordable Care Act (ACA), and tax reform got complicated real fast.
Those big-ticket items mean that other priorities are being pushed aside in the hope that they could be wrapped into a funding deal. That includes: funding for the Children’s Health Insurance Program (CHIP), which has been running on fumes since Congress failed to renew it in late September; restoring protections that Trump scuttled in September for around 800,000 ”Dreamers,” undocumented immigrants who arrived in the country as children; stabilizing the ACA’s individual markets after Trump said he’d stop paying a key subsidy to insurers in October; providing a third tranche of disaster relief funding for communities hit by the summer’s hurricanes and wildfires; and reauthorizing the National Flood Insurance Program, a major National Security Agency surveillance program, and a number of other federal programs.
“The more that you add to it, the bigger these bills get,” said Georgetown University budget politics expert Mark Harkins, “and the harder it’ll be to get an agreement.”
Despite this pileup, until a few days ago observers were optimistic about the funding process. Negotiations between Democrats and Republicans, who need at least eight Democratic votes to pass funding legislation in the Senate, were moving along. Some involved in the process hoped the two parties would agree this week on top-line spending numbers, always a point of contention since Democrats demand parity in funding increases for defense and nondefense spending. They might not have a final deal by December 8. But they could pass a short-term continuing resolution (CR) that would fund the government at the same levels and maybe knocking out one or two other priorities, like disaster relief. They could use those weeks to work hash out deals on the remaining issues and have a full funding bill for 2018 passed before leaving for the holidays.
That seemed to fall apart on Tuesday morning. Just before a major negotiation session between Trump and congressional leaders from both parties, the president fired off a brash tweet saying that he didn’t see any possible deal and insulting the Democrats. The Democrats pulled out of the meeting, and now even progress towards an agreement on top-line spending numbers has stalled out.
“There’s still a chance that senior staff can do what they have to behind the scenes, just get the numbers they need,” said Harkins. Then they could pull together legislation within a few days and let party leaders sign off on it quietly. “But I don’t know if that’s what’s going to occur.”
Instead, Republican leaders now seem to accept that they’ll need a longer CR, pushing off a full funding deal into mid-January or even early February. Republican leaders weren’t jazzed about this, as ending the year on a band-aid solution doesn’t speak well to their governing skills. But others in their party like this solution. It freed up bandwidth to keep focusing on taxes through Christmas and gave them more time to strike deals with the Democrats.
But pushing a final funding bill into 2018 just increased pressure to tackle controversial issues by December 8. Many Democrats and some Republicans are unwilling to end 2017 without fixes for CHIP, protections for Dreamers, and disaster relief. They do not trust Trump or Republican leaders to make good on any promises to handle those issues without the pressure of a CR to attach it to.
Republican leaders seemed willing to play hardball with Democrats, especially when it comes to protections for Dreamers, which they do not want to wrap into a funding bill. The Democrats, meanwhile, are openly worried if they threaten a shutdown, they could be blamed for it. Threats might also help rally the GOP around a hardline conservative funding bill in January. But their fears are likely misplaced, says Steve Bell, a longtime budget Senate staffer and now an economic policy wonk at the Bipartisan Policy Center. With Republicans controlling all three branches of government, the public is likely to blame then. Then again, GOP approval ratings haven’t suffered too much from previous shutdowns.
Harkins suspects one side will eventually back down, because “you don’t cut off paychecks to millions” of federal employees “just before Christmas.” For all the rhetoric about forcing a Dreamers fix by year’s end, he points out, the real deadline to fix the program before all Dreamer protections go up in smoke isn’t until early March.
Bell told me the Democrats might be the ones willing to stand firm and shut down the government on Friday over Dreamer protections as well as CHIP reauthorization and a few other issues. Acting on multiple issues, he thinks, would blunt criticisms that they were just being obstructionist or jeopardizing the government for the sake of a few undocumented youths.
A further wrinkle: As of Thursday, Republicans have realized that defense hawks in their own party might not be willing to wait until January to tackle funding because it’d leave the military planners too uncertain going into 2018. So now there’s another plan on the table: Passing one CR to fund the government until December 22, at which point they can finalize at least military funding figures and knock out a few other issues. Then passing a second CR delaying a final funding bill until mid-January.
That would relieve some of the pressure, at least temporarily. Legislators would still have to tackle CHIP and disaster relief, as well as a few program reauthorizations, in their December 8 CR, said Harkins, as these issues can’t be delayed to the end of the month. But these are easier issues to hash out than Dreamer protections. Even if deals on these priorities can’t be struck, legislators may be willing to let them slide for a few weeks, as they’ve long been willing to convince themselves that CHIP in particular isn’t in as much danger as the experts say.
“If Congress is not able to take care of those two priorities by next Friday,” though, said Harkins, “the ability for Congress to legislate truly has come to an end.”
This would only delay a standoff over protections for Dreamers by a few weeks. Furthermore, kicking the can down the road won’t solve the fundamental problems facing a funding agreement, and could add one more: By mid-January, the Treasury Department will likely be out of tricks to keep the country from hitting the debt ceiling again. So that debate will become a part of funding negotiations, along with any priorities that don’t get resolved in December. And whatever happens with the Republican tax plan, the Alabama Senate race, or any number of other factors could change the strength of either side’s negotiating positions. “We don’t know all of the issues we’re going to be facing in the middle of January,” said Harkins.
Nothing about the upcoming funding slog is certain. Everyone I’ve spoken to agrees we will only get a decent idea of what deal will be on the table for next Friday by Monday. Or maybe not until Wednesday. If then.
As usual, no one really knows how Trump will react to all this. The president seems more willing to risk a shutdown than almost anyone in DC. He seems to believe he risks more by striking deals with the Democrats, like he did in September, and that he can fully blame any funding shenanigans on the Democrats. “The president in these processes is a wildcard,” said Harkins.
The only thing we know for sure is that the coming weeks will be a rollercoaster of uncertainty. “Anyway you cut it,” said Harkins of the coming funding negotiations, “it’s a mess.”
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