Congress made quick action of a two-week continuing resolution (CR) on Thursday, December 7, extending FY 2018 funding to December 22, 2017.  Kicking the proverbial can down the road, congressional leaders now have two more weeks to negotiate a laundry list of items that were supposed to be completed last September 30. The House approved it by 235 to 193 with mainly all Republicans and very few Democrats in support.  The Senate later acted on a vote of 81 to 14 with the opposition split between a handful of Republicans and Democrats.

The House approved the extension quickly despite some conservative member hesitation to be put in a position of having to make tough decisions three days before Christmas (Hanukkah is celebrated December 12 through December 20). Those decisions could include a significant increase in budget caps, renewal of programs like CHIP, Home Visiting and most controversial of all, Deferred Action for Childhood Arrival (DACA).

If there is a final deal on budget caps by December 22, it is likely to raise the caps for both the current 2018 and FY 2019.  A deal would likely require a second CR that would extend for another three or four weeks to allow the appropriations committees to write final 2018 appropriations for the 12 bills.

Thursday afternoon also included a meeting between the four Congressional leaders and the President.  No agreement was reached but all sides came away saying the work would continue (although their versions of what progress was made was not in sync).

Even before the White House discussion some work had been done with numbers exchanged on how much to increase funding.  The first big item is raising the Budget Control ACT (BCA) caps.  Democrats have some leverage with at least 8 Democratic Senators needed to approve an increase in the caps.  Republicans would like significant increase in the current caps for FY 2018 for defense spending which decreases to $549 billion.  Without a law to increase this cap, any defense increases would be reduced with across the board cuts imposed automatically on January 15.  The most conservative members would like an increase in defense spending and a completion of the defense budget through the rest of FY 2018 with the rest of the government operating on a series of CR’s.  Because these same conservatives need those Democratic votes they won’t get that deal.

Under the current Budget Control Act (BCA) parity between the two categories was $551 billion for defense and $519 billion for non-defense spending.  Those totals will decrease in FY 2018 to $549 billion for defense and $516 billion for non-defense under the BCA.