In this update: Two-Year Budget Agreement Reached ECA Staff

 
Two-Year Budget Agreement Reached
 
On Monday evening, congressional leaders announced that they reached an agreement with the White House to suspend the debt limit and raise spending caps for the next two years.  The agreement, unveiled in the Bipartisan Budget Act of 2015, could be voted on as soon as Wednesday.  It was negotiated between outgoing Speaker John Boehner, Senate Majority Leader Mitch McConnell, House Minority Leader Nancy Pelosi, and Senate Minority Leader Harry Reid.
 
The deal, which applies to fiscal years (FY) 2016 and 2017, raises discretionary spending levels by $80 billion - $50 billion in the first year and $30 billion in the second – above sequestration caps.  The increased spending authority will be split evenly between defense and non-defense programs.  An additional $32 billion for the Defense Department’s Overseas Contingency Operations (OCO) account, evenly split between both years, is also part of the agreement.  Overall, this funds the government at $66 billion above FY16 caps and $46 billion above FY17 caps.  Leaders also agreed to suspend the debt ceiling until March 15, 2017.
 
Once passed, the agreement would effectively eliminate the possibility of a government shutdown or political brinkmanship over the debt limit during a presidential election year.  Other provisions of the agreement include offsets for the additional spending, some policy changes to entitlement programs like Medicare, and the authorization for the sale of oil from the Strategic Petroleum Reserve.
 
Impact on Energy and Water Appropriations
 
Idaho Rep. Mike Simpson, the chairman of the House energy and water appropriations subcommittee, predicted that Congress could quickly resolve their energy spending differences.  According to Politico, Simpson said that he and his Senate counterpart, Sen. Lamar Alexander, "are very close in our bills" and that the differences could be resolved "in a pretty short time."
 
The energy and water bill could become part of an omnibus appropriations package to fund the government beyond December 11.  Simpson also expressed hope that his appropriations bill would include funding for Yucca Mountain waste.  Either way, a final spending bill would include funding to pursue a “consent-based” siting process for other nuclear waste sites in line with the Blue Ribbon Commission’s recommendations.
 
Defense Spending
 
The agreement also negates the main point of contention between the Administration and Congress over the National Defense Authorization Act (NDAA).  The President vetoed the bill last week because it increased defense spending by providing additional funds through the OCO account without any similar increase for domestic programs. 
 
Earlier this year, the Defense Department requested a budget that was $38 billion above the caps; the agreement provides an extra $33 billion.  Senate Armed Services Committee Chairman John McCain said earlier today that the agreement means that an attempt to override the President’s veto is no longer necessary.  Sen. McCain and his House counterpart, Rep. Mac Thornberry both said they are ready to trim the NDAA to bring it in line with the budget deal but weren’t sure where those cuts would come from.  The NDAA authorizes the Energy Department’s national security and nuclear programs, including NNSA and environmental cleanup.
 
Congressional Passage
 
While a number of conservatives have thus far criticized the process that led to the deal and some have announced their opposition, the deal is expected to pass Congress easily.  The tweaks to entitlement programs and oil sales from the Strategic Petroleum Reserve have attracted some concerned statements from lawmakers but are not likely to sink the bill.  As a point of comparison, the Bipartisan Budget Act of 2013 (also known as the Ryan-Murray Agreement) passed the House by a vote of 332-94 and the Senate by 64-36.  The continuing resolution that funds the government through December passed 277-151 in the house and 77-19 in the Senate.

ECA will continue to bring you news on the passage of the agreement, NDAA, and other spending bills.