WASHINGTON — A divided House on Thursday passed a two-year budget deal that would raise spending by hundreds of billions of dollars over existing caps and allow the government to keep borrowing to cover its debts, amid grumbling from fiscal conservatives over the measure’s effect on the federal deficit.
Republicans defected by the dozens, despite President Trump’s endorsement and pressure from key outside groups, including the Chamber of Commerce, to avoid a potentially catastrophic default on the government’s debt. Democrats were left to get the deal passed, despite misgivings from some liberals over its increases in military spending over the next two years.
The Senate is expected to approve the measure next week, and Steven Mnuchin, the Treasury secretary, said he would ensure that the department had money through the next two weeks to accommodate Congress’s timeline.
With spending levels set, the bare-bones budget deal will allow lawmakers to begin filling in the details of spending bills that would fund the government agency by agency and program by program beyond Oct. 1, when the new fiscal year begins. Republican leadership in both chambers played up the increase in military spending, while Democrats emphasized the bump in spending for domestic programs.
The success of the bill signals the sunset of the austere spending caps enforced by the Budget Control Act of 2011, a deal forged during Barack Obama’s presidency after a group of rebellious House Republicans demanded deep spending cuts in return for an extension of the debt ceiling. The new deal, drafted mainly by Speaker Nancy Pelosi and Mr. Mnuchin, not only blows past those Budget Control Act caps by $320 billion, but allows the law to expire on schedule after 2021.
Though Republicans once trumpeted the budget act as the party’s crowning achievement of the Obama era, there is little love left in Washington for the 2011 law. The legislation created the sequester — automatic spending cuts that would sweep across almost all government programs if Congress did not abide by the caps — as a way to force a bipartisan “supercommittee” to reach a more equitable deal to control the federal debt through a mix of tax increases, spending cuts and changes to the real drivers of government spending, Medicare, Medicaid and Social Security.
But that committee failed, and programs at the annual discretion of Congress took the brunt of the cuts. The law is broadly seen to have stymied federal investment too soon after the 2008 recession.
Most policymakers in Washington believe that the spending caps were set at unrealistic levels, designed to threaten, not legislate. Several of the parties involved in the original 2011 deal stress that the deal was agreed to under great duress, and was never intended to dictate government policy.
“It was never meant to be a policy of choice; it was only adopted as a way to avoid default,” said Jacob J. Lew, the Treasury secretary at the time, in an interview. “It was a crisis moment.” Gene Sperling, then the director of the White House National Economic Council, referred to the caps in a statement as “an unfortunate last-ditch device.”
Ultimately the lesson learned, said Brendan Buck, an aide at the time to then-Speaker John A, Boehner, was “that this is political reality and there’s not just much forcing mechanism left to achieve anything.”
“I don’t think the every two-year, manufactured crisis is a terribly viable way of approaching this,” he added.
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