Long-Delayed $1.2 Trillion Spending Package Zooms to the Finish Line

Long-Delayed $1.2 Trillion Spending Package Zooms to the Finish Line

Nearly six months into the fiscal year, and less than 48 hours before a government shutdown deadline, congressional leaders on Thursday released their final package of 2024 annual spending bills. The 1,012-page, $1.2 trillion "minibus" was made public just before 3 a.m., kicking off the final leg of a months-long marathon to resolve policy disputes, fund the government and keep agencies operating through September.

The House is expected to vote on the package tomorrow, bypassing a rule giving lawmakers at least 72 hours to review legislation before it is brought to a vote. The Senate would then follow, though the package could face some delays in that chamber and it’s still not clear whether Congress will be able to pass the bills in time to beat a Friday midnight deadline.

The new package includes about 70% of discretionary federal funding for the year, including the appropriations bills for Defense; Homeland Security; Labor, Health and Human Services and Education; the Legislative Branch; State and Foreign Operations; and Financial Services and General Government.

Defense spending would climb more than 3% while non-defense spending would stay roughly flat. The defense increase includes a 5.2% pay raise for U.S. servicemembers, the largest in decades.

Democrats and Republicans each sought to highlight what they saw as wins.

Democrats said they had delivered a $1 billion increase for child care and Head Start pre-school programs while fending off GOP demands for steep spending cuts and dozens of conservative policy riders, including some targeting abortion rights and diversity efforts. Democrats also celebrated adding 12,000 new Special Immigrant Visas for Afghan refugees.

"We defeated outlandish cuts that would have been a gut punch for American families and our economy—and we fought off scores of extreme policies that would have restricted Americans’ fundamental freedoms, hurt consumers while giving giant corporations an unfair advantage, and turned back the clock on historic climate action," Democratic Sen. Patty Murray, who leads the Senate Appropriations Committee, said in a statement.

Republicans, meanwhile, touted a $27 billion increase in defense spending and a partial reversal of additional funding for the IRS while emphasizing that they had delivered first overall cut to non-defense, non-veteran spending in almost a decade. They said they had sharply curtailed the use of budgetary gimmicks and managed to set spending levels more than $100 billion lower than President Joe Biden had requested.

GOP leaders also highlighted funding for 22,000 Border Patrol agents and about 8,000 additional Immigration and Customs Enforcement detention beds. And they pointed to a 6% cut to the State Department and foreign operations as well as a prohibition on taxpayer funding for the United Nations Relief and Works Agency (UNRWA) through March 2025. That agency provides aid to Palestinians in Gaza but faces accusations that at least 12 of its employees participated in the October 7 terrorist attacks in Israel and that many of its workers have ties to Hamas. The package also bars U.S. embassies from displaying unofficial flags, including LGBTQ pride flags, and prohibits any effort to ban gas stoves, both of which have been hot-button issues for some on the right.

"House Republicans made a commitment to strategically increase defense spending, make targeted cuts to overfunded non-defense programs, and pull back wasteful spending from previous years," said Republican Rep. Kay Granger of Texas, the chair of the House Appropriations Committee. "I am proud to say that we have delivered on that promise, and this bill is proof."

But hardline Republicans were incensed by the $1.2 billion package, with some blasting Speaker Mike Johnson for agreeing to it instead of trying to win more negotiating leverage by adopting a longer funding patch or allowing a government shutdown. "I like Mike as a person. He’s honest. I just don’t know if it’s in his DNA to fight," South Carolina Republican Rep. Ralph Norman said, per Politico. "This is just sad."

Conservative Rep. Chip Roy of Texas called the bill an abomination. "It’s total lack of backbone, total lack of leadership, and a total failure by Republican leadership, there’s no other way to describe it," he said in an appearance on Steve Bannon’s "War Room" podcast. He added: "I will not be going out and supporting any Republican who votes for this bill, for any position ever again. It’s absolutely unsupportable by anybody who is a self-proclaimed conservative."

The bottom line: This spending package is now speeding toward passage, though it’s still possible the government might see a brief funding lapse, depending on how quickly the Senate moves and whether any one senator chooses to delay a final vote. Once this funding fight is done, lawmakers will turn to the 2025 spending and tax plans. For more on that, read on...

House Republican Group Calls for Raising the Social Security Retirement Age

The Republican Study Committee, the largest conservative caucus in the House, released a 2025 budget proposal Wednesday that would slash healthcare spending, raise the Social Security retirement age, and balance the budget in seven years.

The budget has little chance of becoming law but provides a sense of the policies Republicans may pursue if they retain control of the House in 2025, and possibly expand their power to include the Senate and the White House.

Of the many reductions in federal spending outlined in the proposal, the cuts to Social Security quickly gained the most attention. The RSC, which represents about 80% of Republicans in the House and virtually all of GOP leadership, said lawmakers have "a moral and practical obligation to address the problems with Social Security," which faces a funding shortfall within a decade.

In the RSC proposal, the retirement age for future beneficiaries would rise and become linked to life expectancy, and benefits would be cut for some wealthy retirees. Over time, the program would move toward a "flat benefit" designed to reduce costs. Taken as a whole, the proposed changes would reduce spending on Social Security by $1.5 trillion over a decade, Bloomberg’s Jack Fitzpatrick reports.

The Medicare program would move toward a "premium support model" that would provide subsidies within a private market. A similar approach was favored by former House Speaker and Republican vice-presidential candidate Paul Ryan, even amid criticism that it would "end Medicare as we know it," as former President Barack Obama put it in 2012. The proposed changes would reduce Medicare spending by $1.2 trillion over the next 10 years.

Health insurance subsidies provided by the Affordable Care Act would also be rolled back, as would a variety of regulations that seek to control prices within the healthcare system.

Rep. Kevin Hern, chair of the RSC, said the proposal is "proof that it’s possible to balance the budget," largely with spending cuts. He also portrayed it as a way to save popular programs, warning that the president’s "refusal to address Social Security insolvency will destroy this or any future Congress’ ability to save it for future generations."

What critics are saying: The White House responded to the budget proposal Thursday. "The Republican Study Committee budget shows what Republicans value," President Joe Biden said in a statement. "This extreme budget will cut Medicare, Social Security, and the Affordable Care Act. It endorses a national abortion ban. The Republican budget will raise housing costs and prescription drugs costs for families. And it will shower giveaways on the wealthy and biggest corporations."

Biden vowed to fight the RSC agenda. "Let me be clear: I will stop them," he said.

Speaking on the Senate floor, Democratic Majority Leader Chuck Schumer said the RSC budget proposal "reads like a wish list for Donald Trump and the MAGA hard right," adding that it "is cruel, it is fringe, way out of line with what most Americans want, but unfortunately it is what the House Republicans envision for our country."

Rep. Brendan Boyle, the senior Democrat on the House Budget Committee, rejected the Republicans’ approach, and focused on their refusal to consider tax increases as a means for shoring up the finances of popular social welfare programs. "Instead of saving Social Security and Medicare by making billionaires pay their fair share, House Republicans would rather break the sacred promise that every American should be able to retire with dignity," he said. "This Republican budget is an attack on seniors, veterans, and the middle class. President Biden and Congressional Democrats will fight to ensure it never becomes reality."

The bottom line: Although neither is likely to become law, the release of budget proposals from the White House and the leading Republican caucus in the House within a two-week period provides a clear view of the two sides’ starkly different ideas about the role of government and how to pay for programs such as Social Security and Medicare.

Biden Administration Forgives Another $5.8 Billion in Student Loan Debt

President Biden announced Thursday that his administration is forgiving another $5.8 billion worth of student loan debt. The move affects about 78,000 public sector workers, who will receive notifications of forgiveness next week.

The latest round of debt forgiveness applies to borrowers in the Public Service Loan Forgiveness program, which is designed to forgive student loan debt for workers in fields such as nursing, teaching and social work after 10 years. The program was plagued by administrative problems, however, and few participants have benefited.

"These public service workers have dedicated their careers to serving their communities, but because of past administrative failures, never got the relief they were entitled to under the law," Biden said in a statement. "Because of the fixes my Administration has made, we have now cancelled student debt for over 870,000 public service workers– compared to only about 7,000 public service borrowers ever receiving forgiveness prior to my Administration."

The announcement brings the total of student loan debt forgiven by the Biden administration to $144 billion, benefiting nearly 4 million borrowers. It’s the largest wave of student loan forgiveness on record, but still falls short of the Biden plan to forgive roughly $400 billion in debt for 43 million borrowers that was shot down by the Supreme Court last summer.

Fiscal News Roundup

• Congress Races to Pass $1.2 Trillion in Spending Before Shutdown Deadline – Washington Post
• Johnson Spurs Fresh Conservative Fury With New Spending Deal – Politico
• Senate Conservatives Not Ready to Threaten a Brief Shutdown by Delaying Spending Deal – Politico
• House Democrats Are Lending the GOP Speaker a Hand — and They Don’t Mind – Politico
• House Republican Budget Calls for Raising the Retirement Age for Social Security – NBC News
• Democrats Seize on a GOP Budget Proposal That Would Raise Social Security Retirement Age – Washington Post
• FBI Headquarters Funding Draws Sharp Backlash From Conservatives – The Hill
• Biden Targets Private Jets in Hunt for Tax Revenue – New York Times
• Biden Suggests a Bigger Federal Role to Reduce Housing Costs – New York Times
• Social Security Program Failed to Properly Notify People of Huge Fines, Report Finds – Washington Post
• US Backs $50 Billion Ukraine Bond Using Frozen Russia Assets – Bloomberg
• AOC, Sanders Unveil ‘Green New Deal’ for Housing – Politico
• 270,000 Overdose Deaths Thrust Fentanyl Into Heart of US Presidential Race – Bloomberg
• Medicare Plans Can Cover Wegovy for Patients With Heart Conditions – Washington Post
• Weight-Loss-Drug Users Pay Up for Help Ditching the Pricey Meds – Bloomberg Businessweek

Views and Analysis

• Why Congress Is Having Trouble Funding the Government – Leigh Ann Caldwell and Theodoric Meyer, Washington Post
• Shutdown Time? Freedom Caucus Rips Mike Johnson for Spending Bill – Tori Otten, New Republic
• Biden Economists' Glowing Message: Full Employment and Less Inflation – Neil Irwin and Courtenay Brown, Axios
• The PBM-Insurer Mafia Comes for Community Pharmacies – Matthew Cunningham-Cook, American Prospect
• Two Johns’ Subtle Differences on Social Security, Medicare – Anthony Adragna, Politico
• Biden’s Emergency Aid Request Crumbles in Hill Pile-Up – Don Wolfensberger, The Hill
• The Fed’s Foot-Dragging Is Making the Last Mile Harder – Matthew Boesler, Bloomberg Businessweek
• The Deadliest Infectious Disease Isn’t a Science Problem. It’s a Money Problem – John Green, Washington Post
• Sports Stadiums Are Good for Owners. Taxpayers, Not So Much – Nia-Malika Henderson, Bloomberg