Wake Me Up When September Ends: America’s Defense Budget Blues

July 15, 2015

Despite the House of Representatives steadily passing a series of appropriations bills, real congressional action on fiscal year (FY) 2016 defense spending is unlikely to start before September.

When we last left the 114th Congress, the House and Senate were attempting to avoid the unnecessary disruption caused by gridlock and inaction by passing a budget resolution and working through “regular order” to fund the government. These efforts were met with initial success, as Republicans were able to cobble together majorities in both chambers large enough to pass a Republican budget resolution. There were two key factions that had to be kept on board in order to do so. Budget hawks were assured that the caps of the Budget Control Act would be maintained. Concurrently, defense hawks were appeased by adding almost $40 billion into the Overseas Contingency Operations account to provide a boost in defense spending. However, while this approach was sufficient to bring a working majority of Republicans on board, it faced unanimous opposition from Democrats in Congress and a veto threat from the White House. Democrats have demanded increases in non-defense discretionary spending to accompany the increase in defense spending. Since no increase was included, Senate Democrats were able to successfully filibuster the Defense Appropriations bill in mid-June, bringing the attempt at “regular order” to a screeching halt. With only a few weeks remaining before Congress flees Washington for its annual August recess, it is unlikely that any progress will be made in funding the government until the pressure of the end of the fiscal year forces negotiations in September.

One of the most damaging aspects of the congressional dysfunction of the past seven years has been the inability of Congress to pass appropriations bills in a timely manner. Under the 1974 Congressional Budget and Impoundment Control Act, Congress passes a budget as a joint resolution that serves as an internal guideline for how much discretionary funding there will be in a fiscal year. This resolution does not require the president’s signature and can be passed with a simple majority in both chambers. Using this number as a cap, the appropriations committees in the House and Senate work to pass 12 individual appropriations bills funding the various parts of the government for the upcoming fiscal year. It is rare that all 12 bills are passed (it was last done for FY 1996), but that is the “regular order” that Congress is supposed to work through. Heading into this year, Republican leadership in both chambers pledged to abide by “regular order.” However, appropriations bills, unlike the budget resolution, go through the normal legislative process. As such, appropriations require the president’s signature and can be filibustered in the Senate. As noted above, this has resulted in the adoption of a Republican budget and a subsequent Democratic filibuster of appropriations bills in the Senate. It is unlikely that this situation will resolve itself without the looming threat of a government shutdown to force both parties to the table.

There are a number of reasons defense analysts tasked with watching the Hill can enjoy a protracted summer break. First, both chambers will be gone for almost the entire month of August, meaning legislation would need to make progress in July. Second the Senate already has a fairly full docket dealing with the reauthorization of “No Child Left Behind,” finding a way to extend the Highway Trust Fund and potentially reauthorizing the Export-Import Bank. Given the glacial speed at which the Senate works, it is hard to see how an appropriations bill could be added to this list, debated, and passed in the four weeks of legislative time (most likely 16 days in session) remaining before the month-long August recess. Beyond these two reasons, it is unlikely that Senate Democrats, having already voted to filibuster defense appropriations, would suddenly change their minds and vote to allow legislation to proceed. It is doubtful that they will relax their demands for negotiations on a budget deal that increases both defense and non-defense discretionary spending. On the other side, the Republican leadership has shown no inclination to consider opening negotiations, absent the direct involvement of the White House. Having entrenched themselves, it is hard to see the parties moving out of their respective positions prior to the forcing mechanism of the end of the fiscal year.

Unfortunately, a budget process that is dependent on the deadline of the fiscal year is going to be suboptimal in a number of ways, most importantly by creating a lot of uncertainty about the final outcome. Veteran budget watchers believe there are three likely outcomes. Optimistically, we could see a new a new version of the Murray-Ryan agreement that sets agreed-to spending levels for two years. At worst, there could be a continuing resolution that provides funding near current levels. There is also the threat of a government shutdown, although most analysts seem to believe there is considerable pressure on both sides to avoid such an outcome. There are many variables that will decide what happens, but here are a few to consider when trying to forecast what may occur:

The influence of outside groups on House & Senate conservatives

The groundwork for the 2013 government shutdown was laid during the August recess, when conservatives were successful in whipping up intense opposition to any funding for the Affordable Care Act in the FY 2014 budget. Much of this intensity was driven by groups such as FreedomWorks and Heritage Action. If they are successful in generating similarly strong support for the Republican budget (or a particular aspect of it), it will become harder for Republicans to agree to a compromise budget offer. This is roughly the script that the 2013 shutdown followed and it may occur again.

Do Senate Democrats maintain the filibuster?

It is easier to filibuster a funding bill in June than it is to do so in September. Majority Leader Mitch McConnell may try to test Senate Democrats by forcing votes close to the end of the fiscal year and daring his opponents to sustain a filibuster into a shutdown. While Democrats typically have had the upper hand in the political battles around government shutdowns, the optics of Democrats voting to block funding for the Department of Defense as time expires may cause some moderates to blink. Only four more would need to switch to break the filibuster, moving the decision over to President Barack Obama. Sens. Claire McCaskill, Michael Bennet, Heidi Heitkamp, Tim Kaine and Jon Tester, all of whom come from states where they can expect a significant challenge in the next two cycles, may be inclined to fund the Department of Defense rather than risk being accused of shutting it down. Sen. Joe Donnelly voted for the legislation when it was first proposed and will likely back it again.

Does the White House hold the line?

The Obama White House has had to issue an impressively low number of vetoes. With the exception of Obama vetoing a bill expediting the Keystone pipeline, the president has rarely had to consider vetoing high-profile legislation. While the NDAA has faced almost annual veto threats, they were duly signed into law each time. Should Senate Democrats allow funding legislation to go forward, Obama would have to potentially decide whether to veto defense spending heading into a government shutdown.

Presidential primaries make congressional action harder

Lastly, if a continuing resolution is adopted, it is worth remembering that the closer we get to 2016, the more high-profile the 2016 presidential primary will become and the more likely candidates are to create significant pressure on members of Congress to adopt positions more in line with each party’s base. This will undoubtedly make it increasingly difficult to pass any sort of bargain. Hopefully things are resolved by Christmas, but if the budget fight runs into 2016, everything will become much more complicated.

Congress is unlikely to pass any funding legislation for FY 2016 this summer, as Senate Democrats are likely to continue to filibuster appropriations bills while demanding Republicans begin negotiations on a funding deal. In September, when the fiscal year draws to a close, pressure will increase for some sort of funding decision. What happens next is anybody’s guess, but paying attention to the actions of outside conservative groups, the statements from moderate Democrats on funding and the signals coming out of the White House regarding a potential veto should give analysts a better handle on what to expect. Lastly, the longer this impasse stretches, the more the presidential primary will begin to impact Congressional decisions, making negotiations and compromise increasingly difficult. Overall, get in those vacations now because it’s going to be a very interesting fall.

 

Matt Vallone is the Defense Platforms manager at Avascent Analytics, responsible for maintaining accurate information on ships, aircraft, and ground vehicles for over 50 countries. Prior to this position, he worked as the Legislative Director for Congresswoman Carol Shea-Porter.

 

Photo credit: Rob Shenk