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A look at Congress’ 2018 agenda: budgets, social programs and — maybe — infrastructure

Election years can be slow legislatively speaking, but Republicans may feel the pressure to get as much done as they can while they still hold the levers of power in Congress.

With an overhaul of the tax code in the books — which permanently slashed tax rates for corporations and reduced individual tax rates for eight years — top Republicans are now talking about working on another long-desired priority: restructuring key social safety net programs like Medicare, Medicaid, Social Security and anti-poverty programs.
Carlos Barria

2017 was an action-packed year on Capitol Hill: in their first year controlling both the White House and Congress since 2006, Republicans moved successfully to overhaul the tax code and moved unsuccessfully to repeal and replace the Affordable Care Act; the Senate also confirmed a slew of conservative jurists to the federal bench at a record pace.

2018 is here, and in November, voters will go to the polls for what looks to be one of the most consequential midterm election cycles in years, and control of Congress hangs in the balance. It’s Washington conventional wisdom that less gets done during election years. That’s true, for the most part: with fewer days in session, and vulnerable incumbents wary of tough votes, the Hill can seem quieter than in non-election years.

But this year may be different, as Republicans feel the pressure to get as much done as they can while they still hold the levers of power in Congress. Already, key members of Congress are talking big about delivering on a long-promised infrastructure package, and pursuing wish-list conservative priorities like reining in spending by targeting Medicare, Medicaid, and other key social safety net programs. First, however, congressional leaders kicked key spending and policy deadlines from 2017 into this calendar year, setting up a winter busy with unavoidable, must-do items.

Budget, spending — and Dreamers

Since the end of fiscal year 2017 on September 30, Congress has failed to pass a long-term package that authorizes federal government spending through the new fiscal year. Lawmakers have passed three short-term extensions called continuing resolutions, and the most recent one, passed before Christmas, expires on January 19.

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Complicating matters is Congress’ need to pass a budget that sets overall spending levels — lawmakers can’t appropriate money for the new year until those caps are agreed upon. At the end of 2017, a budget agreement negotiated between President Barack Obama and former Speaker of the House John Boehner expired.

The Obama-Boehner agreement — reached as Boehner gave up his gavel and retired — raised limits on both defense and non-defense spending that were put in place by the Budget Control Act of 2011, which imposed automatic spending cuts and caps referred to as sequestration.

Unless Republicans and Democrats reach a deal, automatic sequestration will set in again, which would reduce non-defense spending by $3 billion, placing it at an overall level of $515 billion, which is 16 percent below the 2010 level, the last year before sequestration took full effect.

There is little appetite for the return of these automatic spending cuts among Republicans, most of whom are itching to blow the caps off defense spending. This is a priority for the Trump White House, which wants to increase military spending by $54 billion, bringing the Pentagon budget to a total of $683 billion.

But Democratic leadership is demanding that any increase in defense spending be accompanied by a dollar-for-dollar increase in spending on non-defense programs. Democrats say they are aiming for a non-defense spending increase in the realm of $20 to $30 billion.

There may not be an exactly equal increase in spending on both sides of the budget, but the conventional wisdom on the Hill is that there will be some significant increase in non-defense spending to accompany the fiscal ramping-up at the Pentagon.

That doesn’t sit well with fiscal conservatives like 2nd District Rep. Jason Lewis, who sits on the House Budget Committee. In 2017, his committee advanced a budget resolution that aimed to achieve a balanced budget in 10 years with significant cuts to spending.

Lewis told MinnPost that Congress can’t have “wild-eyed spending… we need restraint across the board.” He placed blame on increased spending on Democrats, but also on Republicans who cut deals with them to get their own pet programs funded. “We end up with, I’ll do this for you and you’ll do this for me, and it ratchets up like a staircase.”

In the first week of the new year, talks between Republican and Democratic leaders on the Hill stalled over a matter unrelated to spending and budget: the Deferred Action for Childhood Arrivals program — which provides legal status for millions of undocumented youth brought to the U.S. as children — is set to expire in March after Trump terminated it last year.

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Democrats, and some Republicans, are pushing hard for any must-pass spending item to include a long-term DACA fix that allows the so-called Dreamers to remain in the U.S.

Fourth District DFL Rep. Betty McCollum, who sits on the House Appropriations Committee, said Republicans aren’t taking their responsibility to fund the government seriously. “Instead of continuing to kick the can down the road, it’s time for Republicans to work with Democrats to find common ground and responsibly fund our government,” she said, mentioning the need to fund further disaster relief for last year’s hurricanes and fires, as well as to protect Dreamers.

Republicans have criticized Democrats for wrapping up immigration policy into the spending debate, saying it endangers the U.S. military. But enough of them are likely to accept Democrats’ DACA demands, if it ensured increased defense spending and some concessions from the minority on border security — particularly funding for a border wall, which is a condition for Trump to support a DACA fix.

Cutting the safety net

Once Congress gets budget and spending off its plate — at least until later in the year, as fiscal 2019 approaches — Republican leadership is looking to tackle other priorities while they still retain majorities.

With an overhaul of the tax code in the books — which permanently slashed tax rates for corporations and reduced individual tax rates for eight years  — top Republicans are now talking about working on another long-desired priority: restructuring key social safety net programs like Medicare, Medicaid, Social Security, and anti-poverty programs, in order to make a dent in the $20 trillion federal debt.

In December, after passage of the tax bill, Speaker Paul Ryan said “We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit.” He cited Medicare and Medicaid, the federal government’s health care programs for seniors and low-income individuals, as the main “drivers of debt.”

Beyond that, Ryan said “We have a welfare system that’s trapping people in poverty and effectively paying people not to work… We’ve got to work on that.”

There is widespread support within the House GOP for these goals. Lewis said that lawmakers should look into work requirements for programs like the Supplemental Nutrition Assistance Program, to avoid a situation “where childless, able-bodied adults are taking advantage of a system geared to the truly indigent.”

Funding for the SNAP program, along with other programs that help Americans access affordable food, is included in the so-called Farm Bill, which lays out hundreds of billions of dollars in federal money for agriculture and nutrition programs every five years. Congress takes up the Farm Bill this year, and it’s a big item on a the 2018 to-do list.

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Outside of the House, it’s unclear how much traction plans to change essential components of the government safety net, which assist a vast number of Americans, will get — especially in an election year.

Key Republican senators have been far more circumspect on entitlements. Majority Leader Mitch McConnell said in December that “the sensitivity of entitlements is such that you almost have to have a bipartisan agreement in order to achieve a result.”

Texas Sen. John Cornyn, McConnell’s deputy, said that considering the Republicans’ narrower Senate majority, crafting a plan that satisfies Senate rules and earns the support of all but one Senate Republican would be very difficult. “That’s a pretty steep hill to climb,” he said.

There is also the president, who has previously promised not to touch Social Security. Ryan believes he can persuade the president to get on board with massive entitlement cuts, but it’d be yet another blow — and perhaps a fatal one — to the populist image Trump has cultivated. (Trump himself has reportedly cooled on Ryan’s plans.)

Democrats, meanwhile, plan to fight Republicans tooth and nail on safety net programs, and believe that the GOP’s pursuit of spending cuts would be a massive anchor to their electoral chances in November’s midterms.

First District DFL Rep. Tim Walz said that cuts to Medicare, Medicaid, and other programs would ensure the Republicans lose control of Congress. “You can feel it out here on the ground,” he said. “They’re writing ads for November. They’re starting to reinforce people’s understanding about what they’re really doing.”

It’s Infrastructure Week — for real this time

President Trump took office last January making big promises to rebuild American infrastructure. Democrats saw it as an area — perhaps the only area — where they could work with the divisive president on a major shared priority.

During the campaign, Trump’s team touted a $1 trillion infrastructure package, built up with tax credits to spur private investment in big-ticket projects. With states across the country — including Minnesota —  facing dire infrastructure needs, local officials were eager to start working with Washington.

A year later, however, a big infrastructure package has failed to materialize, as Republicans instead tackled tax cuts and repealing Obamacare. Republican leadership, singing a new tune of bipartisanship, may finally hit the road on infrastructure: the Los Angeles Times reports that the White House could release a plan this week that outlines a  $200 billion commitment in federal infrastructure spending over a multi-year period, which would be supplemented by a projected $800 billion in local government and private sector money.

A blueprint of the plan, reports the Times, outlines federal investment for projects in rural America, which is likely music to the ears of Minnesota officials looking to fill a $18 billion gap between revenue and need for highway spending. Trump met with legislative leaders over the weekend at Camp David to discuss infrastructure, but the Washington Post reported the president has some misgivings about his own administration’s plan to count on so much private money.

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Minnesota’s Republicans and Democrats both want to see an infrastructure package passed this year, but they differ on the main sticking point: how such a project would be paid for.

Lewis, who serves on the House Transportation and Infrastructure panel, said Congress needed to avoid a “Keynesian trap” of throwing piles of money at any kind of infrastructure project.

He predicted “you’re not going to see two to three federal bills that total $1 trillion… We don’t have that money. What we’re talking about is getting to some level of spending that would approach that in total, with public and private money.”

Eighth District DFL Rep. Rick Nolan, also on the transportation committee, thinks Republicans are fooling themselves if they believe just $200 billion in federal money can be leveraged to craft a $1 trillion package — “unless they want to put a tollbooth on every road,” he said.

Nolan also believes that as much as $3 trillion is required to truly meet the country’s infrastructure needs, and plans to advocate for a full trillion in federal money. “We’re going to get to the $2-3 trillion that we actually need… I’m not saying I’d never vote for what [Trump] is proposing, but I’m going to do everything I can to make it better and match up with what our real needs are.”

Walz said Democrats wanted to work with the president and Republicans on infrastructure, but predicted their 2017 achievement — the tax bill — will complicate their 2018 agenda.

“I don’t see after the tax package giveaway where they’re going to get the revenue,” Walz said. “None of them will talk about revenue… It’s magical thinking again. They’re not going to get it done.”