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Evaluating the Budget Deal

August 2, 2019

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 BudgetH.R. 3877, BBADifferenceDefense Base664,000666,5002,500Defense OCO69,00071,5002,500Total733,000738,0005,000NDD Base631,000621,500-9,500NDD OCO (Including Census Plus-Up)8,00010,5002,500Total639,000632,000-7,000…and for FY21 (in millions):House BudgetH.R. 3877, BBADifferenceDefense Base680,000671,500-8,500Defense OCO69,00069,0000Total749,000740,500-8,500NDD Base646,000626,500-19,500NDD OCO8,0008,0000Total654,000634,500-19,500So, 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):FY19H.R. 3877, BBADifferenceDefense Base647,000666,50019,500Defense OCO69,00071,5002,500Total716,000738,00022,000NDD Base597,000621,50024,500NDD OCO (Including Census Plus-Up)8,00010,5002,500Total605,000632,00027,000So, 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 CapsH.R. 3877, BBADifferenceDefense Base576,000666,50090,500Defense OCO071,50071,500Total576,000738,000162,000NDD Base543,000621,50078,500NDD OCO (Including Census Plus-Up)010,50010,500Total543,000632,00089,000FY21 BCA CapsH.R. 3877, BBADifferenceDefense Base590,000671,50081,500Defense OCO069,00069,000Total590,000740,500150,500NDD Base555,000626,50071,500NDD OCO08,0008,000Total555,000634,50079,500

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