FederalIssuesTaxes & SpendingTrump Administration Agrees to Bipartisan Budget Deal, Busts Spending Caps by $323 Billion

The Tea Party's signature policy success faces its potential demise as the Trump Administration agrees to a big-spending budget deal with House Democrats.
July 23, 2019
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About two and a half months ago, Congressman Chip Roy (R-TX-21) gathered signatures for a letter appealing to House Speaker Nancy Pelosi (D-CA) to adhere to the budget caps set by the Budget Control Act of 2011 (BCA). 

Forty-three other House Republicans signed Roy’s letter to preserve the Tea Party’s signature success including Texas Reps. Louie Gohmert, Van Taylor, John Ratcliffe, Ron Wright, Lance Gooden, Michael Cloud, Randy Weber, Kenny Marchant, and Brian Babin.

Fast forward to today — only a couple months before a budget must be passed to avoid hitting the debt ceiling — and the current proposed budget deal would increase spending caps, yet again, by $323 billion over the next two years. 

The bill is estimated to add $1.7 trillion to the country’s debt over the next decade, according to the Committee for a Responsible Federal Budget (CRFB).

The national debt is currently over $22.5 trillion.

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The CRFB also states the plan would increase the United States’ debt to 97 percent of its gross-domestic-product (GDP).

Meanwhile, Republicans are expected to get about half of the spending offsets they wanted. Instead of $150 billion in offsets, the deal contains only $77.4 billion. 

However, those offsets are largely backloaded at the end of the 10-year budget window whereas the spending increases are frontloaded.

Therefore, it remains in question whether or not those offsets will actually take effect.

Under the proposed plan, the debt limit will also be extended through July 2021.

Absent the proposed deal, the current caps established under the BCA would trigger automatic sequestration — cutting spending across the board.

Brian Reidl, a senior fellow at the Manhattan Institute, published a graph detailing the annual budgets by year since the BCA went into effect. Based on his estimates from the current deal on the table, the budget deal will bust the BCA caps by $169 billion and $152 billion in 2020 and 2021 respectively.

The budget for the past two years exceeded the previous caps by $143 billion in 2018 and $153 billion in 2019.

For 2020, the deal increases discretionary spending caps to $666.5 billion for defense spending and $621.5 billion for non-defense spending — an increase from the 2019 budget caps of nearly $20 billion for defense and an increase in non-defense by almost $25 billion.

In 2021, both defense and non-defense spending caps increase yet another $5 billion from their 2020 levels.

The plan includes additional spending classified for “Overseas Contingency Operations” (OCO), a technically “off-budget” fund for the War on Terror. It contains $71.5 billion in 2020 and $69 billion in 2021 for OCO defense costs.

There is also an additional $8 billion in 2020 and 2021 for OCO non-defense funding.

About the deal, Senator John Cornyn (R-TX) told Chad Pergram of Fox News, “I wish we could address debt and deficit reduction. But it’s not going to happen on this deal.” 

Sen. Ted Cruz (R-TX) came out against the proposal today.

Congresswoman Kay Granger (R-TX-12), who is the top Republican on the House Appropriations Committee, told Pergram, “While more needs to be done to get our country on a sustainable budget path, the stakes are too high not to pass this agreement. We need to get this bill to President Trump’s desk so that it can be signed into law.” 

Granger also touted the deal’s removal of the BCA’s sequestration (specifically for the military).

Last year after signing the omnibus budget deal that broke the previous spending caps, President Trump stated, “As a matter of National Security I’ve signed the Omnibus Spending Bill. I say to Congress: I will NEVER sign another bill like this again. To prevent this omnibus situation from ever happening again, I’m calling on Congress to give me a line-item veto for all govt spending bills!”

Yesterday he proclaimed on Twitter, “I am pleased to announce that a deal has been struck with Senate Majority Leader Mitch McConnell, Senate Minority Leader Chuck Schumer, Speaker of the House Nancy Pelosi, and House Minority Leader Kevin McCarthy – on a two-year Budget and Debt Ceiling, with no poison pills. This was a real compromise in order to give another big victory to our Great Military and Vets!”

About the administration’s penchant for spending, a senior House Republican aide told The Texan, “The Trump Administration speaks loudly and carries no stick.”

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Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad watching and quoting Monty Python productions.