This Wednesday is the target date for the House Budget Committee to move a budget resolution for FY 2018. At least that is the goal but it is still an open question as to whether or not they will meet that goal this week.  Since House leadership would like to pass the resolution in one week with a floor debate the following week, this may mean that action gets put off until after the July 4th break.

From a technical standpoint. The Congress and the Republican leadership do not want to adopt a budget resolution for 2018 until they’ve dealt with the health care bill. That health care bill is using the 2017 Budget Resolution and the reconciliation instruction it allows.  If they were to adopt a new budget resolution it would supersede the health care reconciliation bill.

That is the technical aspect of it but in practical terms both the House and the Senate could craft budget resolutions and then hold it in their respective committees or even on the floors before it is finally adopted.  That is likely what will happen. Both the Senate and House could agree to a budget resolution in principle hold onto it and then wait if they must pass their health care bill. They could also plan on using a new reconciliation for a set of tax cuts and entitlement spending cuts and write up those packages and hold both the budget resolution and future budget reconciliation.

At this point, there appears to be a divide within the House Republican Caucus.  Some of the more conservative members want a reconciliation instruction to cut entitlements in exchange for avoiding further cuts in domestic spending and providing increases in the defense budget.

The main purpose of the budget resolution is to set the spending caps and allocations in spending between the 12 appropriations subcommittees including the important Labor-Health and Human Services-Education Subcommittee.  Unless there is an unwritten spending allocation agreement (which there could be), appropriations subcommittees could be working without truly knowing if they are under or over their spending limits.  Since Labor-HHS-Education is generally held to the end, funding for these programs, especially in the House lose out.

Unless current law is changed, the Congress is mandated to work under the Budget Control Act which provides less money in 2018 then is being spent now.  That would mean across the board budget cuts in January when automatic cuts reduce spending.  Senator McConnell has indicated that the Senate (where they need at least some Democrats) would not be spending below the current 2017 levels.The Administration is seeking approximately $54 billion in Defense Department increases with equal cuts in the rest of the budget.  Some in Congress (Senator John McCain (R-AZ)) want significantly more than that for defense and want increases closer to a $70 to $100 billion.

All these decisions could get a boost if the House can agree to a budget resolution.  The two outstanding issues that are dividing Republicans in the House appear to be level of defense increases and what is the trade off: more domestic spending cuts or cuts to entitlements.  Some conservatives would like to continue to freeze funding even as it applies to defense. Others want a reconciliation that cuts in addition to adding tax cuts.  A reconciliation could be used to cut taxes and at the very same time cut mandatory and entitlement spending to offset those tax cuts.

In regard to the debt ceiling the Administration now appears to be backing away from demands that the ceiling gets raised before the August break. Now the Treasury is signaling that they might be able to wait until September.  For a further examination of the budget in some of the key child welfare and children’s issues, you can read a budget chart of key child welfare services and a more detailed description on this budget summary.