Tentative Budget Deal Reached

Blog Post
Friday, December 13, 2019

In a sudden burst of activity, congressional leaders this week reached a tentative agreement on all 12 annual appropriation bills for Fiscal Year 2020, which began on October 1st. The agreement will avoid a government shutdown on Friday December 20, provided that the bills are actually passed in time and signed by President Trump. Votes are expected as soon as Tuesday.

The total funding level, $1.37 trillion, is consistent with a budget agreement reached by congressional leaders and the president last summer. What’s new is that the leaders have now reached agreement on the details of the 12 individual bills that make up the total.

Appropriations, referred to as “discretionary spending” because it must be approved on an annual basis, account for about 30 percent of federal spending. The bills provide basic funding for federal government agencies. If funding is not approved, those agencies must shut down.

Since the fiscal year began, government agencies have been operating on “continuing resolutions,” which have mostly frozen funding at last year’s levels. The most recent continuing resolution expires on December 20th. The new agreement will implement last summer’s budget deal that raised spending caps for Fiscal Years 2020 and 2021 by $324 billion. 

One of the major sticking points to reaching agreement has been the amount of funding for President Trump’s proposed Mexican border wall. While details of the agreement have not been officially published, reports indicate that congressional leaders have decided to provide $1.375 billion for the wall in 2020, the same amount approved for 2019. President Trump had requested $5 billion. 

The agreement also leaves out a Trump request to backfill $3.6 billion of military construction money that he repurposed for border wall funding earlier this year. On the other hand, the agreement does not attempt to limit the president’s authority to repurpose other spending for use in building the wall. Democrats may have been comfortable with this trade-off in light of a recent federal district court decision in Texas, ruling that the president cannot tap into existing military construction funds to supplement wall funding. The Trump Administration has appealed that ruling.

It is not clear if the president will approve the deal struck by congressional leaders, but they are hopeful that the active participation of Treasury Secretary Steven Mnuchin in the negotiations signals a willingness on the president’s part to sign the bills if passed by the House and Senate. Last year, the president upended a congressional agreement leading to a lengthy government shutdown.

If the agreement is enacted, funding would be secured for all agencies through September 30. Work on the Fiscal Year 2021 spending bills is likely to begin in the spring.