NAICU Washington Update

Budget Deal Sets New Parameters

July 23, 2019

As Congress heads for its August recess, White House officials and congressional leaders agreed to a budget deal to suspend the debt ceiling and raise the annual spending caps for FY 2020 and FY 2021. Without this deal, the federal government would default on the publicly held debt in early September, and appropriated programs would face $75 billion in cuts across defense and nondefense programs in FY 2020.  The House and Senate must pass legislation enacting this deal, and the president must sign it for it to be effective.

The details of the deal include increasing the caps for FY 2020 appropriations for nondefense programs by $24 billion, to $632 billion; and for defense programs by $22 billion, to $738 billion.  Levels for FY 2021 are also set, at $634 billion and $740 billion, respectively. Specific funding for veterans’ healthcare and census upgrades is also included. The deal would suspend the debt ceiling until July 31, 2021.   

While the new deal provides $24 billion more for nondefense programs in FY 2020 than FY 2019, it reflects about $10 billion less than the already-passed House appropriations bills for FY 2020.  How the Senate allocates these new funding levels will be critical to final spending deals before the beginning of the fiscal year on October 1. 

Student aid funding fared very well in the House-passed bill earlier this summer, with increases across all programs. The Senate Labor-HHS-Education subcommittee is tentatively scheduled to write its bill the week of September 9. Subcommittee work has traditionally been bipartisan, with higher education priorities focused on National Institutes of Health and student aid funding. While increases as high as the House bill are not expected, the budget deal should keep Senators from having to cut student aid funding. But that all depends on how the budget deal translates into subcommittee allocations.

While the budget deal keeps the process going, and removes the threat of sequestration, Congress still needs to craft final bills, pass them, and send them to the president’s desk for signature before October 1. The House has written all 12 bills, and passed all but 2, while the Senate has written none. The Senate will have just three weeks in September to get this work completed.  If the work is not completed, Congress will need to pass a continuing resolution to avoid a government shutdown.  Hopefully, the existence of the budget deal will allow for a non-controversial continuing resolution to keep the government open while the final bills are written.

MORE News from NAICU