August 2, 2019

Evaluating the Budget Deal

Zack Marshall

Yesterday, the Senate passed H.R. 3877, the Bipartisan Budget Act, by a vote of 67-28 – sending a bill to President Trump’s desk that suspends the debt ceiling for two years, substantially raises the Budget Control Act’s spending caps, raises spending compared to current levels by roughly $320 billion over two years, and officially gets Congress out of town for a historically long August recess.

While President Trump and Majority Leader Mitch McConnell spent quite a bit of time selling Republican senators on the deal that was struck by Treasury Secretary Steve Mnuchin and Speaker Nancy Pelosi, the Bipartisan Budget Act was a true compromise.

To illustrate this, let’s compare H.R. 3877 to the House-passed budget for FY20 (in millions):

  House Budget H.R. 3877, BBA Difference
Defense Base 664,000 666,500 2,500
Defense OCO 69,000 71,500 2,500
Total 733,000 738,000 5,000
NDD Base 631,000 621,500 -9,500
NDD OCO (Including Census Plus-Up) 8,000 10,500 2,500
Total 639,000 632,000 -7,000

…and for FY21 (in millions):

  House Budget H.R. 3877, BBA Difference
Defense Base 680,000 671,500 -8,500
Defense OCO 69,000 69,000 0
Total 749,000 740,500 -8,500
NDD Base 646,000 626,500 -19,500
NDD OCO 8,000 8,000 0
Total 654,000 634,500 -19,500

So, as you can see, Republicans got quite a bit of savings, relative to the House-passed budget numbers for FY20. They got a $5B bump in FY20 for defense, and basically a $9.5B cut in non-defense discretionary (not counting the Census bump up). In FY21, there’s a bit more of a mixed bag, as defense takes a big $8.5B haircut, but NDD is reduced $19.5B. All total, there’s a $3.5B cut in defense spending and a $26.5B cut in NDD over the course of the two-year deal, relative to the House-passed numbers.

If you’re curious about a comparison of the Bipartisan Budget Act’s FY20 levels to current FY19 levels (in millions):

  FY19 H.R. 3877, BBA Difference
Defense Base 647,000 666,500 19,500
Defense OCO 69,000 71,500 2,500
Total 716,000 738,000 22,000
NDD Base 597,000 621,500 24,500
NDD OCO (Including Census Plus-Up) 8,000 10,500 2,500
Total 605,000 632,000 27,000

 

So, a nearly $50B increase in spending compared with current spending, with NDD getting a bigger increase than defense.

Overall, a pretty fair compromise. Both sides will complain, but both sides got some wins.

If you’re curious as to how the new bill compares to the existing budget caps, here are tables comparing H.R. 3877, the Bipartisan Budget Act, to the current law Budget Control Act caps for FYs 20 and 21. Basically, the Bipartisan Budget Act replaces the caps set in place by the 2011 Budget Control Act.

  FY20 BCA Caps H.R. 3877, BBA Difference
Defense Base 576,000 666,500 90,500
Defense OCO 0 71,500 71,500
Total 576,000 738,000 162,000
NDD Base 543,000 621,500 78,500
NDD OCO (Including Census Plus-Up) 0 10,500 10,500
Total 543,000 632,000 89,000

 

  FY21 BCA Caps H.R. 3877, BBA Difference
Defense Base 590,000 671,500 81,500
Defense OCO 0 69,000 69,000
Total 590,000 740,500 150,500
NDD Base 555,000 626,500 71,500
NDD OCO 0 8,000 8,000
Total 555,000 634,500 79,500