Spending Compromises Skate Through Congress – Will It Last?

Maybe it’s something in the water, but Democrats and Republicans have struck a seemingly less combative tone on budget debates in recent months. After the admittedly contentious start to the fiscal year on October 1, when rancor between the House Republicans and Senate Democrats reached new heights with a 16-day government shutdown, both sides seem to have settled down. That could be good news for education programs that have struggled with substantial uncertainty in federal spending policy.

In the latest example, Senate Democratic leaders voted in favor of a hotly debated House bill that would restore pension cost-of-living adjustments for veterans that reduced in a budget deal agreed to last year. The bill pays for the restoration of benefits with savings from extending sequestration on mandatory spending for an extra year, through fiscal year 2024; Democrats had originally rejected the bill on the grounds that House Republicans had refused to use the same savings to extend unemployment benefits. But ahead of inclement weather and facing pressure from veterans’ advocacy groups, the bill overwhelmingly passed the House this week. And despite some trouble finding the votes (Majority Leader Harry Reid had to keep the vote to advance the bill to the floor open for an hour so Republicans could conduct some last-minute arm-twisting), it passed the Senate Wednesday. (The bill’s only real effect on education programs will be to keep student loan origination fees higher for one year longer than is currently planned.)

Maybe it’s something in the water, but Democrats and Republicans have struck a seemingly less combative tone on budget debates in recent months.

Also this week, the House and Senate voted to pass an increase to the nation’s debt ceiling that will hold until March 2015 – without any other savings, tax cuts, or policy changes. That hasn’t been the norm for the last couple of years. Some Republican lawmakers have made a fight of virtually every debt ceiling increase over the last three years. In their first such battle, back in 2011, they were even able to force passage of another bill that set the stage for years of combative budget debates: the Budget Control Act of 2011 (BCA).

The BCA, readers recall, established a bipartisan “supercommittee” tasked with finding $1.5 trillion in deficit reduction over 10 years, with spending cuts or tax hikes or a mix of the two. When the committee failed, it triggered a fallback plan: sequestration. Spending was automatically cut for virtually all federal programs mid-year in 2013, and lower spending caps were set in each year thereafter for a decade. (For a recap, see our recently published issue brief detailing the appropriations process for 2014.)

Budgeting happened in fits and starts after that – in total, Congress passed 9 short-term spending bills (continuing resolutions) from fiscal years 2012 through 2014 to fund the government, rather than full-year appropriations bills. Lawmakers consistently fussed over budgeting for other policy changes, including an effort to maintain lower student loan interest rates, among other things.Nowhere was the stubborn infighting more obvious than at the start of fiscal year 2014, when tensions reached a fever pitch and lawmakers shut down the federal government for 16 days.

But the government finally reopened when the chairs of each chamber’s budget committee, Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI), agreed to come together to write another budget agreement. That framework for a spending bill, dubbed the Bipartisan Budget Act, easily passed both chambers just a few short weeks later. It was an unexpectedly easy fight, given that its main goal was to alter the same annual limits on appropriations that had sparked the shutdown in the first place.

And then came another swift home run: Congress wrote and passed a detailed spending bill within just a few weeks. Lawmakers even managed to protect spending for the Departments of Labor, Health and Human Services, and Education (plus an extra $1 billion for Head Start, among other changes), despite a House GOP proposal earlier this year that cut spending for those agencies back to approximately fiscal year 2002 levels and poured the savings into defense spending.

It’s a relieving shift for congressional leadership and the president, no doubt, not to be at all-out war on every spending bill that comes across their plates. But one question looms: Will it last? The midterm elections are just nine months away, and Democrats and Republicans are battling for control of the Senate to either end or extend the divided Congress that has dominated the last four years. And next fiscal year (FY 2015, which begins just before the elections on October 1, 2014), members will have to appropriate funding for the entire federal government again, in the face of a spending limit essentially equal to the limit used this year. That begs the question of whether Congress will be able to hold spending even when most programs are accustomed to at least an inflationary increase – and whether lawmakers will manage to keep their cool in the face of their other lofty policy goals.

For more on the budget battles that defined the 2013 and 2014 fiscal years, check out our recently published appropriations brief, Federal Education Budget Update: Fiscal Year 2014 Appropriations. And check back with EdCentral as Congress and the president approach the 2015 spending process."