A New Era of Big Spending in Trump's Washington

With a budget deal that will spike outlays by $300 billion over two years, lawmakers rediscover the key to consensus in Congress: Crack open the federal piggy bank.

Congressional leaders struck the biggest bipartisan breakthrough of the Trump era by going back to the old rules of Washington: The quickest way to reach consensus is by cracking open the federal piggy bank and divvying up what falls out.

A two-year budget agreement announced on Wednesday achieves a hard-fought fiscal peace, but at a steep price for taxpayers and the federal deficit: an increase of around $300 billion in overall spending. President Trump and GOP defense hawks have secured a long-sought boost in military funding, but only after agreeing to nearly commensurate increases in domestic discretionary spending. The deal directs tens of billions of extra dollars to disaster relief, $20 billion toward infrastructure projects, $6 billion to combat the opioid crisis, and billions more for veterans and children’s health care. In exchange for eliminating across-the-board sequestration cuts to the Pentagon, lawmakers will all but ignore the $54 billion in reductions to domestic programs and the State Department that Trump proposed in his first budget request last year.

The result is that if this agreement wins approval, federal spending would rise to levels few would have predicted when Republicans won full control of Congress and the White House in 2016. On top of the $1.5 trillion tax cuts the GOP enacted in December, the deal will confirm the nation’s return to the $1 trillion annual budget deficits that arrived with the Great Recession a decade ago. As part of the agreement, Congress would suspend the debt ceiling for another year, ensuring that it will not have to be lifted again until just before Trump runs for reelection.

“After months of legislative logjams, this budget deal is a genuine breakthrough,” crowed Senator Charles Schumer, the Democratic leader. “And it should break the long cycle of spending crises that have snarled this Congress and hampered our middle class.”

Democrats used the leverage of their 49 votes in the Senate—easily enough to sustain a filibuster—to win spending increases for domestic programs alongside the boost for the military. But they failed to achieve a central goal they set at the outset of the budget talks in September: legislation offering permanent protections for the so-called “dreamers,” the young immigrants at risk for deportation once Trump ends the Deferred Action for Childhood Arrivals program. In exchange for ending the government shutdown last month, Schumer secured a commitment from Senate Majority Leader Mitch McConnell to debate immigration legislation on the floor next week.

In the House, Speaker Paul Ryan has refused to give Democrats a similar assurance. Guarding against a revolt from liberals in her caucus, Minority Leader Nancy Pelosi said she would not support the budget agreement absent a commitment from Ryan to vote on a DACA bill. Using a privilege afforded to her as party leader, Pelosi held the House floor for more than six hours on Wednesday, reading letters from young immigrants and urging Republicans to back a DACA deal.

Pelosi’s opposition could prove important, since dozens of conservatives are expected to balk at the high spending levels in the budget agreement. With support from both parties, the Senate plans to attach the deal to a temporary spending measure that would keep the government open past Thursday and buy time for Congress to write and pass an omnibus appropriations bill for the remainder of the fiscal year. But the package likely will need plenty of House Democratic votes to pass once clears the Senate.

Republicans hailed the increase in defense spending, saying it would help them keep their promise to “rebuild the military” after what they viewed as years of decline under the Obama administration, exacerbated by the sequestration spending caps enacted under the Budget Control Act in 2011. “This agreement delivers on our commitment to fully fund our national defense—no more short-term ploys and patches,” Ryan said. Republicans also secured a higher increase in defense spending than Democrats did for non-defense, breaking a pattern of parity that the parties stuck to under Obama.

The GOP scored other wins as well. After failing last year to repeal the Affordable Care Act, the deal continues to chip away at the law by cutting spending from its prevention fund (what the GOP calls its “slush fund”) and by eliminating the Independent Payment Advisory Board—the cost-containment measure that inspired the false conservative warnings about “death panels.”

Still, the real significance of this deal lies in its spending. Congress ended its period of fiscal austerity in the final years of the Obama administration. But it took the arrival of a Republican president promising military dominance and beefed-up security to get the party’s congressional leadership to ditch its deficit worries, open up the Treasury, and launch a new era of big spending in Washington.