GOP surprise raises new questions for Trump budget

Senate Republicans on Friday threw a wrench into President Trump’s proposal to boost defense spending and slash nondefense spending, calling for across-the-board cuts in their 2020 budget and leaving an uncertain path ahead for reaching a spending deal with Democrats.

Each year, the budgeting process kicks off with the president’s proposal, which Congress largely ignores as the House and Senate write their own budget plans.

But even those budgets don’t have the force of law, and final spending numbers are usually worked out in back room deals between congressional leadership and the White House.

{mosads}This year, Trump’s budget called for turbocharging defense spending by increasing it to $750 billion, mostly through a budget gimmick.

The expectation among congressional staff was that the GOP would adopt that figure, without the gimmicks, and Democrats would push for an equal increase in nondefense spending.

But Senate Budget Committee Chairman Mike Enzi (R-Wy.) had his own ideas.

On Friday, he released a budget proposal that seemed to rebuke Trump’s decision to stash $96 billion in new defense spending in an account known as the Overseas Contingency Operation (OCO) fund. Instead of adding to OCO, as Trump suggested, Enzi drew down the funds in the account and phased them out altogether after two years.

But that was just the start.

Enzi’s budget formally called for slashing a combined $126 billion from current spending levels, both in defense and nondefense.

“Strengthening America’s future for our children and grandchildren begins by putting our nation on a more sustainable fiscal path and reducing our nation’s deficit spending, which is approaching $1 trillion per year,” Enzi said.

The move earned the praise of deficit hawks, who have lamented a steady increase in spending, even as the GOP tax law eats into revenues.

“Under this plan, deficits stay under $1 trillion, peaking in 2022 at $939 billion and returning back to their historical average as a share of the economy by 2024. Under current policies, trillion-dollar deficits return as soon as next year,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

Enzi’s proposal left open the possibility that Congress would reach a spending deal that included Trump’s $750 billion for defense, though it seemed to indicate that such a deal would have to include offsets in other spending, a further challenge to Trump.

The proposal, which budget watchers expected would help focus the debate on spending, has left the question wide open on where the final numbers will end up.

Across the Capitol, Democrats are struggling to propose their own budget.

The party’s moderates, including many newly elected red-district Democrats who helped swing the party into the majority in last year’s midterms, want to keep deficits in line while keeping defense spending intact.

The progressive wing of the caucus, however, is pushing to freeze or even scale back defense spending and wants the majority of new spending to replenish nondefense priorities such as health care, education and infrastructure.

House Budget Committee Chairman John Yarmuth (D-Ky.) put the odds of Democrats agreeing to a resolution and bringing it to a vote at 50-50.

Once the Democrats finish work on their own budget proposal — or opt to leave it on the cutting room floor — they will have to face down Republicans to negotiate a final spending number, to be set into law by increasing budget caps.

“The biggest budget issue Congress faces this year is the need to raise the discretionary budget caps,” said House Budget Committee spokesman Sam Lau. “Without action, our defense and nondefense investments will fall by 10 percent, crippling our national and economic security.”

Democrats are insisting that any increase in defense spending be matched dollar-for-dollar in nondefense spending. If the GOP insists on $750 billion in defense spending, a $34 billion increase from 2019, then Democrats would demand nondefense rise $34 billion as well, to $631 billion.

But even if the GOP backs down on Trump’s $750 billion figure, Democrats say nondefense spending has to increase at least $20 billion just to keep programs running, a result of new costs pushed onto the budget this year.

Those include paying $4 billion for the 2020 census, funding $9 billion of a veterans program that used to be paid for through mandatory spending and reduced receipts from housing programs.

The process is expected to play out over months, with budget markups happening in the coming weeks and appropriations shooting to pass preliminary bills by June.

But if 2019 serves as an example, it could extend months beyond the start of the new fiscal year in September.

Even after congressional leaders agree to new spending caps, they will still have to contend with Trump and his request for $8.6 billion to fund his border wall.

In December, that issue led to a 35-day shutdown, the longest in the nation’s history.