The Looming Fiscal Train Wreck Means Trump Won’t Get His Wall. Here’s Why

The Looming Fiscal Train Wreck Means Trump Won’t Get His Wall. Here’s Why


Congress has religiously missed its deadline for passing a budget and related spending bills for eight consecutive years. And from the looks of a looming fiscal train wreck this fall, congressional leaders, and President Trump will have little choice but to adopt yet another short-term spending bill to avert a government shutdown beginning Oct. 1. 

Some members of Congress are holding out hope that something approximating a budget process might still survive, but even that would likely be a shadow of the “regular order” procedure that lawmakers are supposed to follow. Tennessee Sen. Bob Corker this week said that he doesn’t expect the Senate Budget Committee to act on any budget proposal at all this year, but that party leader might try to bring a budget bill directly to the floor through an obscure process known as a “deeming,” which can bypass the Budget Committee.

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But budget policy experts agree almost unanimously that with only 12 legislative days left to act once Congress returns from its August recess, the most likely scenario would be simultaneous passage of a massive continuing spending resolution to keep the government operating until Republicans and Democrats can work out a multitude of differences in their budgetary priorities -- not to mention passing an increase in the Treasury’s borrowing authority to avoid a first-ever default on U.S. debt. 

With so much at stake for both parties -- and so much disarray among the Republican leadership on Capitol Hill and in White House -- the passage of a short-term continuing resolution or “CR” may be the GOP’s only salvation from political and economic chaos.

Still, passing another CR instead of the dozen or so regular appropriations bills required to keep the doors of government open and to finance both parties’ most important agenda items would be a bitter pill for Republicans to swallow.

A new continuing resolution would keep the government operating beyond the start of the new fiscal year on Oct. 1, but at the prior year’s funding levels and with no additional money to fund Trump’s ambitious but costly agenda. That would mean, for the time being at least, that Trump’s proposal to begin planning and building a wall along the southern border with Mexico would be put on hold, as would the $54 billion of increased defense spending he has demanded.

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There would be no extra money for Trump’s ambitions to boost spending and investment on new infrastructure. Nor would there be money to fund his daughter Ivanka Trump’s pet proposal to provide paid parental leave to millions of Americans.

White House Budget Director Mick Mulvaney has said that the administration would oppose a continuing resolution because “that wouldn’t allow us to fund those priorities.” Democratic votes would be necessary to pass another CR, especially in the Senate, where a 60-vote super majority will be required, and the Trump administration, for now, prefers to go its own way.

 But just as Mulvaney on Thursday seemingly ended his resistance to a “clean” increase in the federal debt ceiling – devoid of any Republican demands for additional spending cuts that could trigger a standoff with the Democrats -- the administration will almost certainly have to go along with a CR to avoid responsibility for the first government shutdown since late 2013.

The Republicans’ disconnect with budget reality is astounding. The textbook process in Congress is for the House and Senate early in the year to agree on a new budget blueprint that provides the appropriations committee with top line funding authority for dividing among defense and domestic discretionary programs.

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This year – like many years in the past – the Republican-controlled House and Senate are nowhere near agreement on a budget. While most Republicans agree that defense spending must increase substantially, as Trump is demanding, there is no consensus on how large that increase that should be. New spending levels for domestic programs and government agencies also remain a mystery, with Trump pressing for deep cuts in most areas while many Republicans and Democrats are pushing back.

That has left the appropriators on their own to forge ahead with little guidance to pass a dozen spending bills for the new fiscal year that begins Oct. 1. So far, the House has only managed to approve four of the dozen spending bills while the Senate – consumed until now by health care reform – has not approved any. Most of the bills have not even made it out of committee.

Another complication is determining how to go about raising the legal spending caps imposed by the 2011 Budget Control Act. The defense cap must be raised to avert an automatic, 13 percent across-the-board reduction in defense spending later this fall. But again, that would require a deal with the Democrats who would insist on more money for domestic programs as well.

Bill Hoagland, a vice president of the Bipartisan Policy Center and a one-time Senate Republican budget expert, says he doesn’t think the Republicans – who control the White House and both chambers of Congress for the first time in more than a decade – would risk a government shutdown or a default this fall by shunning a CR.

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“But they will go up to the wire, they always do,” Hoagland said in an interview Thursday. “We’ve seen this movie before. They’ve just got themselves boxed in by the calendar. It will go right up to the holiday season or the first quarter” of next year.

Robert Bixby, executive director of the Concord Coalition, an anti-deficit group, said, “If I had to guess, I’d say the House will pass bills at a level the Senate won’t accept, and that will give us our shutdown and then our CR. I guess I would kind of look for some kind of budget deal in the fall – maybe October – that would involve the CR, a debt limit increase and maybe they do a budget resolution with reconciliation,” he said.   

Bixby said that House and Senate Republicans would have no choice but to eventually approve a budget resolution for the coming year if they hope to use it as the vehicle to pass major tax cuts this year under reconciliation rules.  That same tactic was used by the Republicans in trying to pass an overhaul of Obamacare without the threat of a Democratic filibuster.

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However, that would require serious budget negotiations between Senate Majority Leader Mitch McConnell (R-KY), House Speaker Paul Ryan (R-WI), Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA), who currently are barely on speaking terms.

The collapse in the Senate of the Republican effort to repeal and replace the Affordable Care Act provided a vivid lesson of the shortcomings of one party insisting on going it alone on a major policy initiative. There already are signs that the Republicans’ other major agenda item – the first tax reform legislation since 1986 – is in trouble and might not survive without a more bipartisan approach.

Without some kind of bipartisan breakthrough on the budget, spending bill, debt ceiling and spending caps this fall, Republicans could be in a heap of political trouble. 

“If Trump were smart, I think that’s what he would do,” Bixby added. “Somebody can benefit from negotiating with the Democrats and getting something out of it. It could be Trump; it could be the congressional leaders. One way for the president to try to get some of what he wants is to negotiate with the Democrats.”