House and Senate Pass Fifth FY18 CR and Raise Budget Caps

The federal government briefly shut down at midnight last night as Congress worked to complete action on the fifth continuing resolution for fiscal year 2018. The Senate passed H.R. 1892, the Bipartisan Budget Act of 2018 by a vote of 71-28 (37 Democrats/Independents voted in favor of the measure while 16 Republicans voted against it) and the House followed passing it by a vote of 240-186 (73 Democrats voted in favor of the measure while 67 Republicans voted against it – many of whom are members of the House Freedom Caucus). While the Senate had secured a bipartisan agreement earlier in the week, Sen. Rand Paul (R-KY) wanted the Senate to vote on an amendment to restore the budget caps to the lower levels. He objected to requests to allow an expedited vote on the spending deal so the Senate had to wait to vote on the measure until Sen. Paul’s allotted time ran out after midnight.

The bill includes an FY2018 continuing resolution (CR) funding the federal government through March 23 and raises the spending caps for FY2018 and FY2019. The budget agreement lifts the defense spending caps from $549B in FY2018 and $562B in FY2019 to $629B (base budget)/$700B (with OCO funds) in FY2018 and $647B (base budget)/$716B (with OCO funds) in FY2019. For nondefense spending, the caps are raised from $516B in FY2018 and $530B in FY2019 to $579B in FY2018 and $598B in FY2019. The agreement also suspends the debt ceiling until March 2019. At that point, the Treasury Department would again begin using extraordinary measures to avoid default buying Congress some additional time before they would have to address the issue.

H.R. 1892 also included:

  • $6B over two years would go towards anti-opioid and mental health efforts
  • $20B for infrastructure projects like surface transportation, rural broadband, and clean drinking water
  • $5.8B for Child Care Development Block Grants
  • $4B to rebuild veterans hospitals and clinics
  • $2B for the National Institutes of Health
  • $4B for college affordability programs, including those for police officers, firefighters, and teachers
  • $4B to help clear out a Veterans health care maintenance claims backlog
  • Only $100B of the spending increases would be offset (most of the increased spending will be financed by additional borrowing)
  • $89.3B in Emergency Funds for Hurricane-Affected Communities
  • $4.9B in increased Medicaid funding for Puerto Rico and the U.S. Virgin Islands with a 100% federal cost share
  • Tax Extenders – one year extensions of tax breaks that expired after CY2016
  • Repeal of the Independent Payment Advisory Board established by the Affordable Care Act to help rein in Medicare costs
  • $1.1B to help dairy and cotton farmers
  • A 10 year extension of the authorization of the Children’s Health Insurance Program (CHIP)
  • $7B over two years for community health centers
  • Closes the Medicare Part D prescription drug benefit “donut hole” for seniors in 2019
  • Creation of two joint select congressional committees tasked with:
    • Developing legislation on multi-employer pension plans
    • Come up with budget process reform legislation

With the overall funding levels for defense and nondefense now agreed to, the House and Senate Appropriations committees can begin to rewrite their 12 FY2018 spending bills to the higher spending levels. The FY2018 omnibus spending bill is expected to be considered before this new CR expires on March 23.

H.R. 1892


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