This is the central spending issue that could make or break the government shutdown fight

Joe Raedle/Getty ImagesSenate Minority Leader Chuck Schumer and President Donald Trump

  • Congress must pass a funding bill by the end of January 19 or the federal government will enter a partial shutdown.
  • While legislators are trying to add on a number of other issues, the core fight is over the levels of spending to allocate to defence and non-defence programs.
  • Republicans want to increase defence funding by much more than non-defence, while Democrats want them to go up equally.

Congress is hurtling toward yet another government shutdown deadline on Friday and while the focus for this round of negotiations is on immigration, there is one key issue that will determine whether the January 19 deadline comes and goes without an agreement.

Congress must still decide exactly how much funding to provide for defence and non-defence functions of the government. So far this fiscal year, short-term funding bills passed before the few shutdown deadlines maintained last year’s spending levels for federal programs – but Congress wants to increase spending for the new year.

There are limitations on how large the funding increases can be because of the spending caps triggered in 2013 by the 2011 Budget Control Act. These caps on the amount the government can increase spending for defence and non-defence spending from year to year are much lower than lawmakers want.

Both Democrats and Republicans want to come to an agreement in order to increase those levels beyond the current limits for next year. Going above the Budget Control Act’s limits can be done with a congressional action, but first Congress must get over the substantial disagreement on the size of the increases.

Republicans want a bulk of the spending increase to go to defence spending instead of non-defence spending. Democrats, on the other had, want to increase defence and non-defence spending by an equal amount.

The initial offer from the GOP in December was to boost defence spending by $US54 billion and non-defence spending by $US37 billion for 2018 and 2019. Democrats rejected this, calling for parity between the two by raising both sides by $US54 billion.

Despite being in the minority, Democrats have substantial influence on the issue because some Republicans concerned about government spending – such as Sen. Rand Paul – could vote against any bill that substantially increases spending above the caps.

Additionally, Democrats could filibuster any spending bill in the Senate that does not meet their demands.

Sen. John Cornyn, the second-highest ranking GOP senator, said that setting these caps has been difficult so far because Democrats are attempting to attach codification of the Deferred Action for Childhood Arrivals (DACA) immigration program, which prevents the deportation of undocumented immigrants that entered the country as minors, to the bill setting the caps.

Despite the complication of the DACA fight, Democrats have additional leverage on the spending cap issue since no party has had the government shut down while controlling both Congress and the White House since 1979.

The most likely scenario in the coming days, according to reports, is that Congress passes a short-term funding extension with new cap levels, giving appropriators – staffers who do technical budgetary work – time to hash out exactly where to spend the money.

“In our minds, the only question is the size of the deal – we had initially ball-parked a $US300 billion deal over two years, though ~$US200 billion over two years (equal amounts to defence and non-defence) now seems more likely,” said Chris Kreuger, a policy strategist at Cowen Washington Research Group. “The Republicans have offered $US54 billion for defence and $US37 billion for non-defence, though the Democrats are demanding 1:1 parity (which they are likely to get).”

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