Federal Budget Deal Likely to Preserve Nonprofit Funding

July 22, 2019; New York Times

Writing in the New York Times, reporters Emily Cochrane, Alan Rappeport, and Jim Tankersley report, “White House and congressional negotiators reached accord on a two-year budget on Monday.”

While the headline number is “$320 billion above budget caps,” this number is deceptively high. If Congress fails to act, then budget sequester legislation outstanding from the years when a Republican Congress sought to restrain the spending of President Obama would force cuts of over $200 billion, so the spending is $320 billion above sequester cap levels. However, the actual increase in authorized federal discretionary spending is far more modest.

Provided the agreement is adopted, however, the sequester legislation ends for good, and “domestic discretionary” spending—that is, government spending not including such major cost categories as Social Security, Medicare, and interest payments—would rise $49 billion in Fiscal Year 2020 above current fiscal-year authorized spending levels and would rise an additional $5 billion above that in Fiscal Year 2021. If you add $49 billion and $54 billion, you get a total additional authorized spending increase of $103 billion in two years, about four percent above current levels.

The agreement, notes the Times team, was “negotiated largely by Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin.” The deal includes an additional $2.5 billion for the 2020 census. Negotiators hope to pass the deal by the end of the month.

While passage of the deal is expected, it is not certain, as at least some level of dissent is likely to show up in roll call votes among both liberal Democrats and conservative Republicans. Republicans opposing the bill object to the increase in spending. One significant Democratic objection to the bill is that the budget bill lacks a commitment from the White House to stop using money from military programs to finance wall construction along the US-Mexico border.

For her part, Representative Alexandria Ocasio-Cortez (D-NY) notes that the bill also fails to challenge “business as usual” priorities in Washington. As Ocasio-Cortez wrote on Twitter, “Notice how whenever we pursue large spending increases + tax cuts for corporations, contractors & connected, it’s treated as business as usual. But the moment we consider investing similar [money] in working class people…they cry out it’s ‘unrealistic.”

Even if the budget agreement passes, Cochrane and her colleagues warn that, “Trouble could still come as Congress drafts detailed spending bills that must win the president’s signature.” Still, the budget bill, if passed, would set the overall framework for what would be available for federal spending for the next two years. Effectively, the deal provides for an additional $56.5 billion in domestic spending over two years and an additional $46.5 billion in defense spending.

Details of the budget deal are available online, with the key numbers reproduced below.—Steve Dubb