2021 Federal Budget: 5 Takeaways from a conversation with POLITICO Pro reporters

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POLITICO Pro budget and appropriations reporter Caitlin Emma, Congress reporters Sarah Ferris and Nicholas Wu, and defense reporter Connor O’Brien broke down the annual September shutdown deadline, a new debt limit cliff, and the two-track process to pass a bipartisan infrastructure package and a $3.5 trillion social spending bill, so you don’t have to.


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1) Full-year funding is out of reach — for now 

  •  Party leaders expect a continuing resolution by the end of the fiscal year on Sept. 30, in part because of the White House’s delayed budget request.  

  • House Democrats passed nine of twelve appropriation bills, an effort by Appropriations Chair Rosa DeLauro (D-Conn.) to strengthen the party's position in late-fall spending negotiations.  

  • There are only 2 months for both chambers to strike a fiscal 2022 appropriations deal before federal cash dries up. 

  • Pentagon officials have long been girding for a stopgap, lamenting the stagnant funding levels that they say threaten modernization and other efforts. 

  • For defense hawks, there may be an upside to waiting for bicameral spending negotiations. Case in point: The Senate Armed Services Committee approved a $25 billion boost last week to overall defense spending, bucking the White House and other Democrats who want a smaller increase.  

2) Congress can move quickly when it wants to

  • The House and Senate swiftly passed a $2.1 billion Capitol security funding package on Thursday. 

  • Senators were able to break the stalemate in part because the two parties agreed to increase the number of visas set aside for Afghans after the U.S. withdrawal. 

3) Debt limit is a ‘later issue’ 

  • Democratic leaders don’t believe they need to act on the debt ceiling before Congress departs for August recess.  

  • While the debt limit was technically suspended through July 31, the Treasury Department has begun special steps to make sure the government keeps paying its bills on time until October or November. 

  • Some Democrats want to add a debt limit hike to their party’s reconciliation bill, while others would rather pursue a bipartisan deal with at least 10 Senate Republicans to suspend the ceiling until a later date. Neither option is easy, and there is still no clear remedy this time. 

  • Leaders in both parties are just starting to confront the issue, and there is no appetite among House Republicans to help Democrats craft a deal. “This is just one of those really, really messy issues that is always harder when concerns about debt and deficit are top of mind,” -Sarah Ferris 

4) Immigration is a big one to watch 

  • Democrats are planning to tuck at least some immigration reforms into their reconciliation bill this fall, but it’s unclear whether those efforts will clear the Senate’s budget rules.  

  • Many Democrats hope to include a permanent fix for the Deferred Action for Childhood Arrivals program. The parliamentarian, however, could strike that out. 

5) A make-or-break moment for Democrats 

  • Democratic leaders and the White House have taken the “hold hands and jump” approach in agreeing to move a bipartisan infrastructure deal and a massive party-line social spending bill at the same time. 

  • House Speaker Nancy Pelosi will be facing pressure from moderates who want her to take up the Senate’s bipartisan bill as soon as possible. Meanwhile, progressives plan to hold Pelosi to her promise that the bipartisan deal won’t budge in the lower chamber until the reconciliation bill passes the Senate. 

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