Congress is back this week after a two week Passover/Easter Recess, and the first order of business is reaching some agreement to keep the government open beyond 12:01 am Saturday morning. Tensions over funding have risen during the recess as the Administration has begun a hard push for more defense money and a significant amount ($1.4 billion) to begin work on a wall along the Mexican border. Initially, OMB Director Mulvaney had insinuated that the lack of funding for the Administrations priorities (in both the FY2017 supplemental request and the FY2018 skinny budget) would result in a veto. In recent days, however, Administration officials generally have stopped short of insinuating the President would veto any FY2017 measure not including these funds.
Democrats in the House and Senate have been very vocal that including any funding for a border wall is a nonstarter. Mulvaney has suggested that a path forward with Democrats would be including funding for insurance subsidies under Obamacare that are used to reduce the cost of co-payments and deductibles, which is something the Trump Administration has vowed to cut.
Realistically, Republican leadership in the House and Senate know that no continuing resolution (CR) or omnibus for FY2017 can pass either body without some Democratic support. Bottom line: Democratic cooperation is needed in the Senate for any spending deal to pass because 60 votes are required to advance legislation and Republicans control only 52 seats.
As negotiations continue to drag on, the more likely a short term is likely to move, simply to give Congress more time to negotiate a broader package or figure out a resolution for FY2017.
Additionally, House Republicans are working with the White House to try to revive a replacement plan for Obamacare as negotiations continue on a compromise that might win a majority vote. However, Members return to Capitol Hill this week with no sign of an imminent deal that would overcome objections from both moderate and conservative camps,
What’s driving this push? The Trump Administration’s first 100 days in office winds up on Saturday. Traditionally, the first 100 days of a new administration is the most active and influential (CNN has a good overview). While the Trump Administration has not been as successful legislatively as it would have liked, there have been successes in rolling back Obama Administration regulations and confirming a Supreme Court nominee. That said, Trump Administration officials would like a big win prior to Saturday and pushing some version of Obamacare repeal and a FY2017 are the two options being pushed right now.
Meanwhile, the debt ceiling is likely to make a summer appearance. Technically, the federal government exceeded its spending authority on March 15th. The Treasury has been using so-called extraordinary measures to extend the government’s borrowing capacity for several more months. That capacity should last until “sometime this fall” before Congress would need to raise the debt limit again, according to an estimate from the Congressional Budget Office. Treasury Secretary Steve Mnuchin has privately accelerated the timeframe for Congress to address the issue and raise the debt ceiling to some time this summer. This move would coincide with tax reform provisions (or perhaps still Obamacare repeal) that Congress would consider.
Stay tuned.