(Bloomberg) -- The short-term spending bill passed by the House to avoid a government shutdown this Friday may get replaced with a longer-term budget plan that raises spending caps for defense and domestic programs if congressional leaders can wrap up a deal in the next two days.
The House bill, passed 245-182 Tuesday, would keep the government open only until March 23 while funding the Pentagon through September. But Republican and Democratic leaders in both chambers are working on a two-year budget plan that -- if that comes together -- may be combined with other important but stalled measures, including lifting the federal debt ceiling and hurricane disaster aid.
Some lawmakers said they would rather take one big controversial vote than a series of them.
“I believe doing a bigger bill is often easier,” said Representative Charlie Dent, a Pennsylvania Republican.
Current government funding runs out at the end of the day Thursday. Senate leaders said they don't want to bring the government to the brink of a shutdown and see little risk that it would occur. Last month, the government was closed for three days after Democrats demanded action on immigration legislation. The threat of another hang-up dissipated after Senate Majority Leader Mitch McConnell agreed to an open debate on immigration.
A two-year budget deal under discussion would cost more than $250 billion for this fiscal year and the next one that begins Oct. 1. Defense caps for each year would be raised by about $80 billion, while non-defense spending limits would be raised by about $60 billion. Budget maneuvers would be used to add more domestic spending, allowing Democrats to claim that defense and non-defense are being treated equally.
Both McConnell and Senate Democratic leader Chuck Schumer said on Tuesday that a deal could be reached soon.
There still is a chance that the broader budget accord won't be settled before the government funding runs out at the end of the day Thursday. In that case the Senate could pass a temporary spending bill without the added money for the Pentagon. Any Senate revisions to the House bill, H.R. 1892, would mean the House would have to vote again before Friday. Democrats canceled plans for a retreat on Maryland's Eastern Shore that was scheduled to begin on Wednesday.
Hard Choices
A deal to raise the budget caps would create some hard choices for the two party leaders in the House, Speaker Paul Ryan and Minority Leader Nancy Pelosi.
Some House Republicans are balking at adding more spending on non-defense programs, and a group of Democrats are threatening to buck their party for failing to include a solution for young immigrants facing potential deportation.
Republican Representative Mark Meadows, chairman of the conservative House Freedom Caucus, said he won't support an increase in domestic spending. He said enough Republicans would reject it that Ryan would need about 90 Democratic votes to get it passed. If a debt-limit increase is included, even more Democratic support would be needed, he said.
There are 238 Republicans in the House and 193 Democrats.
“We've had some very, very contentious conversations in the last 24 hours” and the discussion “puts us at odds with some in our own party,” Meadows told MSNBC Wednesday. He said the concern of deficit and fiscal hawks is that an increase of the debt ceiling will be added in and “it will be a Christmas tree of spending” and “a lot of votes will be bought.”
But there's restiveness among Democrats as well.
‘Complete Betrayal'
Pro-immigration hard-liner Luis Gutierrez, an Illinois Democrat, said a budget deal without protection for the young immigrants covered under the soon-to-end Deferred Action for Childhood Arrivals program, or DACA, is unacceptable.
“That would be a complete betrayal,” he told reporters, adding that “a lot” of Democrats would feel the same.
Still, Representative John Yarmuth, a Kentucky Democrat, said the increase in domestic spending would be a big sweetener for many in his party who realize that immigration won't be part of a budget agreement.
Senate Democratic leaders dropped the immigration issue from the budget negotiations. That's now proceeding down a separate path after McConnell's promise to have a fair and open immigration debate in the Senate.
‘Substantial Debate'
“Either way we're going to have a substantial debate on the floor of the Senate over DACA. That hasn't happened in five years," said Senator Bob Casey, a Pennsylvania Democrat facing re-election in November. "I would love if we can guarantee a lot of things around here.”
Republican Senator Lindsey Graham of South Carolina, who's been at the center of the immigration negotiations, said DACA talks are moving toward a short-term fix short of a path to citizenship in exchange for border funding sought by President Donald Trump.
He lamented that a broader deal is being held up by disputes over Trump's proposals to cut legal immigration.
"You're not going to get a pathway to citizenship unless you get the things that the president wants, like getting $25 billion for border security. The chain migration and visa lottery are going to be the problem areas," Graham said. "The Democrats have moved toward border security, very close to the president's number."
Republican Senator John Cornyn said the budget deal may include a provision lifting the federal debt ceiling, which lawmakers have been putting off since it snapped back into place on Dec. 8. The nonpartisan Congressional Budget Office predicts the Treasury can prevent a debt default only through early March, and Treasury Secretary Steven Mnuchin urged Congress Tuesday to “act as soon as possible.”
Tax Breaks
In addition to a debt-limit increase and disaster funds, Congress could extend expired tax breaks and may revise a provision in the tax bill that lets farmers minimize their taxable income by selling to cooperatives rather than commercial grain-handlers like Archer-Daniels-Midland Co., ADM, Bunge Ltd. and Cargill Inc.
Even as the threat of a government shutdown was ebbing in Congress, Trump threatened Tuesday to force one if Democrats refuse to meet his demands on immigration legislation.
“I'd love to see a shutdown if we don't get this stuff taken care of,” Trump said at an event with law enforcement officials to discuss MS-13, a predominantly Latino gang whose members include undocumented immigrants.
--With assistance from Steven T. Dennis Jack Fitzpatrick and Margaret Talev
To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net, Laura Litvan in Washington at llitvan@bloomberg.net, Sahil Kapur in Washington at skapur39@bloomberg.net.
To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo
©2018 Bloomberg L.P.
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