Congressional Republicans Face Ideological Rifts Over Spending Bills

By Kristina Peterson Features Dow Jones Newswires

When President Donald Trump's proposed budget was released with fanfare last week, lawmakers were already engaged in a debate over actual spending levels for the next fiscal year.

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Republicans agree that the president's budget -- while indicative of the White House's priorities -- can't realistically be translated into the spending bills that keep the government running until current funding expires at the end of September.

But they disagree internally over how to craft those spending bills, which will need support from Democrats to avoid a partial government shutdown on Oct. 1. The looming fiscal uncertainty adds to the challenges Republican leaders already face trying to steer sweeping health-care and tax legislation through Congress.

The spending debate is a recurring dilemma for lawmakers, but they haven't had to fully wrestle with where to set overall government spending since the fall of 2015, when former House Speaker John Boehner (R., Ohio), Senate Majority Leader Mitch McConnell (R., Ky.) and former President Barack Obama reached a two-year budget deal to boost federal spending above limits established in a 2011 deal that had been in effect since 2013.

That 2015 deal ends this September, leaving lawmakers grappling with whether to leave federal spending at the limits established in 2011 or raise them, potentially adding to the federal deficit. There is no consensus over what to do now, even among Republicans.

"We've got defense hawks, we've got deficit hawks, we've got moderates concerned about draconian cuts," said Rep. Steve Womack (R., Ark.) "We've got all comers weighing in on the budget process and -- kind of like health care -- there's no real simple solution."

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Some lawmakers say that with Republicans now in control of both chambers of Congress and the White House, there is less reason to look at easing the spending limits, as lawmakers did under previous deals because of a more divided political environment.

"My concerns with the past years is that, in a bipartisan fashion, we're kicking the can down the road and adding to the debt," said Rep. Dave Brat (R., Va.) "When you win the House and the Senate and the White House and you're the small-government party...if we do more status quo, the same old thing after winning, we're going to lose our brand in rapid order."

Still, Democrats do retain some leverage in the complex process. A budget resolution can pass both chambers with just a simple majority, as well as certain legislation tied it. That is the process Republicans hope to use to pass partisan overhauls of the health-care system and tax code. But the spending bills that actually fund the government require 60 votes in the Senate and the Republicans hold only 52 of the chamber's 100 seats. And then there is Mr. Trump, who ultimately needs to sign any spending bill for it to become law and who has proven to be an unpredictable force in legislative affairs in the first few months of his administration.

Mr. McConnell, the Senate leader, acknowledged that Democrats will play a part in determining where overall spending levels will be set for the next fiscal year.

"We'll have to negotiate the top-line with Senate Democrats, we know that," Mr. McConnell told reporters last week. "They will not be irrelevant in the process and, at some point here in the near future, those discussions will begin."

Democrats used their leverage earlier this month to block Mr. Trump from getting funding to build a wall along the Southern border with Mexico in an interim spending bill and will try later this summer to prevent deep spending cuts to government programs, including student-loan programs and food stamps.

Republicans "ought to take an honest look at where we are in some areas, " said Sen. Dick Durbin (D., Ill.) Under the current limits, some government programs "are likely to be cut to unacceptable levels," he said.

Some Republicans, especially those focused on the military, have been among the most vocal champions of raising spending above the current limits, which they say have impinged on the country's military readiness.

"Keeping caps in place disproportionately hurts defense," said House Armed Services Committee Chairman Mac Thornberry (R., Texas). Like many Republicans, he would like to see spending trimmed on the big federal safety-net programs, but Mr. Trump has been unwilling to touch Social Security or Medicare for retirees.

At a closed-door meeting of House Republicans on Thursday, House Speaker Paul Ryan (R., Wis.) gave his rank and file an assessment of the fiscal issues looming over the next few months, according to GOP lawmakers and aides. In addition to funding the government for the 2018 fiscal year by October, Congress will also have to raise the federal government's borrowing limit, known as the debt ceiling, sooner than many had expected, because tax revenue has come in slower than anticipated.

The government officially hit its borrowing limit in mid-March, but the Treasury Department has been employing cash-conservation measures to keep funding itself. Analysts had expected the measures would allow the Treasury to keep paying its bills until the fall, but Treasury Secretary Steven Mnuchin suggested last week that lawmakers should act before the end of July.

Negotiations over spending bills and the debt limit have frequently been intertwined before, since taking steps to rein in spending can make it easier for Republicans to vote for raising the debt ceiling. But Republicans haven't yet coalesced around what changes they want to make.

Mr. Ryan told reporters the House GOP was beginning its discussions over how to approach the tricky issue as it popped up earlier on the legislative calendar.

"We're looking at that new timetable," he said. "The debt ceiling issue will get resolved."

Write to Kristina Peterson at kristina.peterson@wsj.com

(END) Dow Jones Newswires

May 29, 2017 08:14 ET (12:14 GMT)