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House Republican Leadership and Conservative Wing Close in on Reaching Budget Agreement

March 4, 2016

In recent weeks, the leaders of the Republican Party in the House have been negotiating with the Party’s most conservative wing to reach an agreement on federal spending. The vehicle for the agreement would be a “budget resolution,” which the House and Senate are charged with passing each year in order to set top-line spending caps and spending policy for future years. The top-line spending cap in turn allows the House and Senate Appropriations Committees to begin to write annual appropriations bills.

On Thursday, March 3, House Budget Committee Chairman Tom Price (R-GA) announced to his party that the House budget resolution for fiscal year (FY) 2017 would abide by the $1.07 trillion discretionary spending cap that Congress and the President agreed to in October of last year. The Freedom Caucus of the Republican Party had been pushing leadership to renege on that agreement and lower the spending cap. By sticking to the previously agreed to discretionary cap, Price leaves the door open for the House Appropriations Committee to produce FY 2017 spending bills that Democrats will support and that the President will sign.

Beyond the discretionary spending caps, budget resolutions occasionally include “budget reconciliation” instructions, which direct one or more authorizing committees (e.g. the Agriculture Committee or the Transportation Committee, etc.) to cut mandatory spending to meet a certain deficit reduction target by a certain deadline.

Under reconciliation, the authorizing committees are generally given wide flexibility to adjust any policies under their jurisdiction to get to the deficit-reduction target. For example, if the Agriculture Committees were to receive reconciliation instructions, they could reform commodity and crop insurance programs, or cut anti-hunger and nutrition programs, or change the size and scope of farm conservation programs, or some combination.

In the case of the House budget resolution for FY 2017, we know very little. According to media accounts, House Speaker Paul Ryan (R-WI) and Chairman Price continue to negotiate with the Freedom Caucus on the details of the resolution. The initial Freedom Caucus reaction to the proposed House budget deal has been largely negative. There is no Democratic support for the proposal, so it will require broad Republican support to pass, necessitating a deal with the Freedom Caucus.

What we do know is that the resolution is very likely to contain budget reconciliation instructions (though some Members have called it “quasi-reconciliation” instructions, whatever that means), and that those instruction will call for a $30 billion reduction to mandatory spending over two years.

According to the rumor mill, there are some indications that the House Agriculture Committee may be one of the committees instructed to make cuts, but we have no confirmation one way or another.

We will be watching the negotiations carefully and will post updated information as soon as we know more. If the budget resolution instructs the Agriculture Committee to reopen the 2014 Farm Bill, Chairman Mike Conaway (R-TX) and Ranking Member Collin Peterson (D-MN) will be put in a very difficult situation, and there will no doubt be a major fight over where those savings should come from.

Of course, the House is only one of two chambers of Congress, and in order for any reconciliation or quasi-reconciliation bill to become law, both the Senate and the President would have to agree. Even Senate consideration of such a bill seems highly unlikely, and even if they did take up the bill and found a way to pass something, White House agreement is even more unlikely, given the likely choices the House majority will make in what to cut and what to spare.

Regardless of whether reconciliation-type instructions are included for agriculture, the budget resolution, when passed, will allow the House Appropriations Committee to move forward with its work for FY 2017. The first step will be for Hal Rogers (R-KY), Chairman of the Committee, and his subcommittee leaders to establish spending allocations for each of the twelve appropriations subcommittees, including the Agriculture Appropriations Subcommittee, which has already begun to hold hearings to examine the U.S. Department of Agriculture’s FY 2017 budget request. The subcommittees will then draft their respective discretionary spending bills for FY 2017 – we expect the Agriculture Appropriations Subcommittee to release its bill sometime in April or May.

Stay tuned for more information on the budget and appropriations process in the coming days.

Categories: Budget and Appropriations, Farm Bill

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