Detail

House Passes Bipartisan Bill to Suspend Debt Ceiling, Increase Budget Caps 2 Years and End Sequestration; Senate to Vote on Package Next Week

  • July 26, 2019

The U.S. House of Representatives yesterday passed the Bipartisan Budget Act of 2019 (H.R. 3877) that would suspend the national debt ceiling until July 31, 2021; raise federal spending over the next two years; and avoid the threat of automatic, across-the-board "sequestration" budget cuts. The bill now goes to the Senate, which is expected to vote next week.  ( Section-by-Section summary of the bill, Budget Committee)

The U.S. House of Representatives yesterday passed the   Bipartisan Budget Act of 2019  (H.R. 3877) that would suspend the national debt ceiling until July 31, 2021; raise federal spending over the next two years; and avoid the threat of automatic, across-the-board "sequestration" budget cuts.  

  • The measure, which passed 284-149, caps recent negotiations between Democratic congressional leaders and the White House.  Earlier this month, Treasury Secretary Steven Mnuchin wrote to House Speaker Nancy Pelosi (D-CA) warning that if the debt ceiling was not raised, the U.S. could run out of cash to pay its bills in early September, resulting in potential default on the nation's financial obligations.  (Roundtable Weekly, July 12) 
  • The deal increases discretionary spending limits $324 billion over two years, replacing the prospect of strict sequestration caps imposed under the Budget Control Act of 2011.  The bill passed by the House permanently ends sequestration, which would impose a 10 percent cut on all programs if budget targets are not met.  (CQ, July 25) 
  • The fiscal package passed by the House would increase the budget cap for FY'20 defense programs by three percent, to $738 billion.  Funding for domestic programs would increase four percent, topping off at $632 billion. (Politico, July 25) 
  • The deal also lifts the debt limit through July 2021, meaning policymakers would not have to address the controversial issue during the 2020 election year. 
  • President Trump encouraged GOP lawmakers to endorse the legislation, tweeting yesterday, "House Republicans should support the TWO YEAR BUDGET AGREEMENT which greatly helps our Military and our Vets. I am totally with you!"  
  • Senate Majority Leader Mitch McConnell, (R-KY) this week stated he expects the Senate to pass the House bill next week and send it to President Trump for his signature. (Washington Post, July 25).  He added, "I make no apologies for this two-year caps deal. I think it's the best we could have done in a time of divided government. The alternatives were much worse." (Politico, July 23).   
  • When Congress returns from summer recess on September 9, policymakers will face a tight deadline to set federal appropriations for individual agencies and departments for FY'20.  Current FY'19 funding runs out on September 30, as does legislative authority for the National Flood Insurance and EB-5 investment programs.  
  • If Congress and President Trump cannot agree on how to allocate the $1.37 trillion in discretionary money allotted for the new fiscal year beginning October 1, a stopgap funding measure (or "Continuing Resolution") may be required.  
  • Last December and January, the lack of a government spending deal over security measures on the southern border led to a 35-day partial government shut down. (Roundtable Weekly, Feb. 1) 

The House recessed today for six weeks; the Senate is scheduled to leave August 2.