The Administration announced it will delay the release of next year’s budget to February 12. That is FY 2019, not FY 2018 which still has not been finalized. As a result the 2019 proposal will base spending levels on an estimate of what Congress will finally do in FY 2018. In all likelihood there will be many programs that will be frozen by the Trump Administration and that level will be below what the actual 2018 funding ends up being set at. It just adds to the likelihood that FY 2019 will start on October 1, with another CR that will expire shortly after the November 2018 congressional elections.
In regard to funding for FY 2018, negotiations continued on raising the current budget caps. There have been suggestions that the negotiations will de-couple enactment of a DACA fix from a budget deal with Democrats going along. No doubt that will be affected by what progress is actually made on immigration over this next week (see below).
It looks certain that the budget caps will be raised for both 2018 and the next fiscal year. Rumored numbers have been in the neighborhood of a $70 billion increase for this current fiscal year and perhaps an increase of $80 billion for 2019. The additional challenge is how much of that will be allocated to defense spending and how much to non-defense. Current spending caps allocate approximately $1.1 trillion with Defense Department spending at slightly more than half of that total. It seems certain that it will not be a true parity with increases split down the middle, rather it will tilt toward defense with non-defense getting less than half. The non-defense spending includes not just domestic spending but spending for the State Department and some veterans spending.
Democrats are seeking increased spending to address opioids addiction and the figure they have sought is by at least $20 billion over two years. It is unclear how this would calculate into any non-defense spending caps.
If a deal is struck, it would be a part of another CR when funding expires on February 8. A deal would require another temporary extension that will allow for three or four weeks of work to finally have a 2018 budget approximately half a year into the fiscal year.
Action will be limited this week. After the President’s State of the Union, Congressional Republicans are expected to hold their annual retreat starting on Wednesday.
