The bipartisan budget agreement reached last month is supposed to put an end to the fiscal fights that have dominated President Obama’s relationship with congressional Republicans.
But that doesn’t mean the threat of a government shutdown is over.
The budget deal increased the overall discretionary spending level by $30 billion for fiscal 2016, but it did not specify how that money should be spent or what additional policies might be included in the year-end omnibus spending bill needed by Dec. 11 to keep the government open.
Republicans are now looking to use the omnibus to dramatically scale back environmental regulations and rules for banks, despite warnings from Democrats that they could serve as “poison pills” that would imperil the legislation. Democrats are also worried that the additional spending allowed in the budget deal won’t be directed toward the domestic programs they favor. There also is still a chance that lawmakers could try to end funding for Syrian refugee programs through the omnibus, and the question of whether to fund embattled women’s health group Planned Parenthood continues to linger.
Any of these fights could blow up into another shutdown showdown.
Republicans insist the administration has to show some flexibility.
“There will have to be some riders in this for us to be able to pass it through Congress,” Speaker Paul D. Ryan (R-Wisc.) said Monday at an event hosted by The Wall Street Journal. “There are a number of regulations being churned out of this administration that we think are killing jobs.”
But Democrats are warning their GOP colleagues not to overreach.
“We are not expecting simply the appropriations bills as they were written without dealing with present circumstance, but Mr. Ryan will know clearly in his own mind what a poison pill is,” said House Minority Whip Steny Hoyer (D-Md.).
What follows is a list of the five policy fights that could trip up a year-end spending bill and cause a government shutdown in December:
- Funding for Syrian refugees.
Lawmakers in the House and Senate are mulling several options to prevent Syrian and Iraqi refugees from entering the United States until the government can verify they don’t pose a security a threat, including blocking funds for the refugee program in the upcoming omnibus.
The House on Thursday passed a stand-alone bill aimed at increasing screening for refuges, but it is unclear if that will be enough to satisfy conservatives. The White House has said that Obama would veto the legislation and Republican leaders have left the door open to adding refugee language to the must-pass omnibus.
Senate Republican Conference Chairman John Thune (R-S.D.) told reporters on Tuesday that there are still many options for addressing the refugee issue, but lawmakers are running out of legislation that could carry the controversial proposals. He added that he expects many Democrats would eventually support the measure if it is attached to the omnibus.
“I would be surprised if there are going to be a lot of Democrats who are going to object if we take a thoughtful, reasonable approach to this,” Thune said.
- Dividing up the $30 billion spending increase
Despite weeks of discussions, Democrats and Republicans are still at odds over how much each appropriations subcommittee should get to fund the programs and agencies under its jurisdiction. House Appropriations Committee Chairman Hal Rogers (R-Ky.) and Senate Appropriations Committee Chairman Thad Cochran (R-Miss.) have already circulated rough spending limits for each of the 12 subcommittees. Aides said the numbers are a starting point for negotiations, but some Democrats are not happy.
“We can’t go anywhere with an allocation that doesn’t allow you to do what you need to do,” said Rep. Rosa DeLauro (D-Conn.), the top Democrat on the Labor and Health and Human Services subcommittee. “The recent allocation is well below the percentage that Labor-H should have, given that Labor-H is 32 percent of the non-defense discretionary funding. We’ve lost $20 billion since 2010.”
Rogers dismissed the frustration as part of the negotiating process, but the issue could make it difficult to win the votes of some Democrats.
“These are notional number they’re working with,” Rogers said. “That’s all part of negotiations.”
- Environmental policy riders
Republicans in both chambers have taken dead aim at environmental regulations finalized by the Obama administration this year, with key congressional leaders pledging to use the spending bill to prevent their implementation. Under scrutiny are the Environmental Protection Agency’s Clean Power Plan, which establishes carbon dioxide emissions standards for fossil-fuel power plants, and the agency’s update of the Clean Water Rule, also known as the “Waters of the United States” rule, which extends federal protection to new U.S. waterways.
House Republicans have voted to block both rules, but Democrats have filibustered GOP efforts in the Senate — making it a prime issue for a must-pass spending bill.
“Crop insurance aside, that’s the one that has the farthest ranging impact,” House Agriculture Committee Chairman Rep. K. Michael Conaway (R-Texas) said of the water rule.
Last month, the U.S. Court of Appeals for the Sixth Circuit put those regulations on hold, but Conaway said most Republicans favor a “belt-and-suspenders” approach and are pushing for a rider. History, however, is not on their side: Democrats were able to keep those provisions out of last year’s “cromnibus” spending deal.
- Rolling back financial regulations
Republicans in both chambers have been eyeing the year-end spending bill as an opportunity to dismantle the 2010 Dodd-Frank financial regulatory overhaul passed in the wake of the 2008 fiscal crisis. The financial reforms are a key part of Obama’s domestic policy legacy.
Led by Sen. Elizabeth Warren (D-Mass.), liberal Democrats are warning that allowing changes to be made to the law through the appropriations process is a slippery slope that Wall Street will continue to use to weaken Dodd-Frank. Any changes, they argue, should be considered as stand-alone bills. There was an uproar last year when the year-end omnibus spending bill contained language rolling back a section of the law governing derivatives.
This year Republicans are expected to focus on aspects of the law that moderate Democrats have said they are open to changing, such as easing rules for community banks.
There is also some bipartisan support for raising the threshold at which banks face a stiffer set of Federal Reserve regulations because of their size. Under Dodd-Frank, this increased scrutiny is applied to banks with $50 billion or more in assets. The banking industry argues this threshold is far too low and should only be applied to larger, more complex banks whose failure could harm the financial system.
House Financial Services and General Government Appropriations Subcommittee Chairman Ander Crenshaw (R-Fla.) said he expects some Democrats will back attempts to reduce the number of banks that qualify for the increased scrutiny.
“It’s pretty reasonable,” Crenshaw said. “I’ve talked to some people on the Democratic side who say there are some reasonable reforms that are coming.”
Democrats are likely to remain united in opposition to other areas of the law that Republicans want to change, in particular the Consumer Financial Protection Bureau.
Whether financial regulatory changes cause a problem for the omnibus will likely come down to whether Warren and other Wall Street critics view them as being narrowly targeted at smaller banks as opposed to a loosening of consumer protections and oversight of the financial industry.
- Crop insurance subsidies
Lawmakers from agriculture heavy states in the South and Midwest are working with appropriators to change a provision in the budget agreement that would raise $3 billion through cuts to the crop insurance program.
Members of the House and Senate Agriculture committees threatened to vote against the budget agreement because of the cuts, arguing they already made changes to this program in the most recent Farm Bill. House leaders promised farm state members in the hours running up to the vote that the omnibus spending bill would be used as a vehicle for replacing the crop insurance cuts.
But Senate Minority Leader Harry Reid (D-Nev.) isn’t interested in helping out.
“The farmers haven’t been hurt at all,” Reid said in October after the budget legislation passed the House. “I want to give them nothing, so we’ll see what happens in the process.”
Farm state members may still have the upper hand. Several Democrats, including Sens. Debbie Stabenow (D-Mich.) and Heidi Heitkamp (D-N.D.), have insisted leaders follow through on the deal. Republicans on the Agriculture Committee have also made clear that their support for the spending bill depends on preventing cuts to crop insurance.
“It took us 408 days to pass a Farm Bill and we’re not going to open it up again,” said Senate Agriculture Committee Chairman Pat Roberts (R-Kan.).
Karoun Demirjian contributed to this report.