Dems, GOP set to huddle on deal to fund government, avert shutdown

Top Democrats and Republicans are set to huddle Wednesday in pursuit of a deal that could fund the federal government for the remainder of the fiscal year, hoping to stave off a shutdown while potentially pumping new spending into health care, education, science and defense.

The upcoming discussions mark the second consecutive day of private meetings on Capitol Hill, as lawmakers who oversee the federal purse increasingly express a measure of confidence that they can act before a Feb. 18 deadline—and overcome months of prior political disputes and delays.

Since President Joe Biden took office, the U.S. government has operated under short-term measures that sustain key federal agencies and programs largely at their existing spending levels. The stopgaps have kept the government running, but they have also delayed Democrats from delivering on some of the White House’s top priorities in 2022, from expanding affordable housing to confronting climate change.

Republicans appeared content to continue in that vein, essentially dealing a political blow to Biden in the process. But the two sides have come to see mutual benefit in striking a longer-term resolution, especially at a moment when the United States continues to confront the pandemic at home and new diplomatic challenges abroad. The omicron variant of the coronavirus has sparked fresh discussions about the need for another round of federal aid, while the intensifying standoff between Russia and Ukraine has emboldened a Republican-led push to spend more on defense.

With the clock ticking, Democrats huddled Tuesday morning to discuss their political strategy. Emerging from the gathering, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Chuck Schumer, D-N.Y., each offered their public, formal blessings for the nascent talks around a longer-term spending deal. Schumer added that the party’s negotiators are “on the same page,” though he and Pelosi noted they had not yet received an official counteroffer from their GOP counterparts.

The leaders of the House and Senate’s top panels overseeing appropriations then gathered on their own late Tuesday to try to put pen to paper. One of the participants in the bipartisan session, Sen. Richard Shelby, R-Ala., later told reporters that lawmakers are still seeking an “agreement on our principles, then the [spending] top line will follow.”

Shelby acknowledged that a slew of policy gaps still separate the parties, including the balance between “social spending versus national security.” But he joined his Democratic counterparts in maintaining that “we all want to try to get to yes,” adding: “We’re not there yet.”

The promises and platitudes nonetheless amounted to noteworthy progress on Capitol Hill, a place where partisan disagreements these days have come to transform all but the most basic debates into intractable conflicts.

Twice in recent months, the appropriations process has nearly brought federal agencies to a screeching halt, threatening to shut down the government and hamstring the country’s response to the pandemic. Republicans at the end of last year even held up a swift resolution to the funding fight to launch an ill-fated political campaign against Biden’s vaccination and testing mandates targeting businesses. The Supreme Court later struck down some of the administration’s policies.

This year, lawmakers from both parties have pledged to steer clear of the same brinkmanship that characterized negotiations in fights past. Instead they have aimed for a deal that covers spending through the fiscal year, which concludes at the end of September. But they already face a race against the clock to act by Feb. 18, the date by which lawmakers must adopt another short-term measure or broker the sort of compromise that has so far eluded them during Biden’s presidency.

Democrats seek significant boosts in federal domestic spending, now that the country for the first time in a decade is not bound to strict budget caps. Writing to her caucus last week, Pelosi endorsed the need for a “strong omnibus” that would “address critical priorities for our country, including for our national security and for communities at home.”

Yet some of the Democrats’ proposed spending increases and policy tweaks have troubled Shelby and his fellow Republicans. Beginning last year, they pointed to a series of “poison pills”—from Democratic plans to enhance the IRS to the party’s effort to loosen a long-standing ban on federal funding for abortion services—that could sink any talks on a deal. GOP lawmakers also have called for parity in defense and nondefense spending, a move that historically has troubled some Democrats, who have sought greater cuts to the Pentagon than even Biden has proposed.

“We’re looking for parity. We live in a troubled world and a lot of us think national security is important for this country,” Shelby, who leads the GOP on the Senate’s appropriations panel, stressed on Tuesday.

Democrats and Republicans otherwise appeared to downplay any potential disagreements following their flurry of meetings. Sen. Patrick Leahy, D-Vt., the chairman of the chamber’s appropriations panel, described himself as “always optimistic.” Rep. Rosa DeLauro, D-Conn., his counterpart in the House, declined to specify any timelines or expectations for the follow-up session set for Wednesday afternoon.

“The goal is to get an agreement,” DeLauro said.

But such a deal, known in congressional parlance as an omnibus, is likely to carry additional significance this year. The compromise could pave the way for billions of dollars to flow toward projects that would improve the nation’s roads, bridges, pipes, ports and Internet connections. Lawmakers approved the money as part of a bipartisan infrastructure law finalized in 2021, but the package requires them to complete the act of writing the check, so to speak, before the real work can begin.

The must-pass spending measure also could serve as a legislative vehicle for lawmakers to advance a slew of other critical priorities. That includes new disaster aid in response to recent hurricanes and the tornadoes in and around Kentucky last year, for example, along with billions of dollars to augment the country’s efforts to combat the coronavirus.

With cases still rampant from the omicron variant, Democrats in recent weeks have renewed their calls for more federal spending to boost testing, therapeutics and vaccine access, especially abroad. Others have sought to provide additional benefits to workers, including a revived program that extends limited, pandemic-related paid family and medical leave. And still other Democrats have joined with a small but growing crop of Republicans who hope to give the green light to new assistance targeting restaurants, gyms, stages and other small businesses.

Publicly, the White House has maintained in recent months that significant money remains as part of the roughly $1.9 trillion American Rescue Plan that Biden signed into law last spring. White House officials, meanwhile, have quietly started preparing a supplemental request focused on outstanding public health needs.

But the Biden administration by Tuesday afternoon had not transmitted any official request to the Capitol, Democratic leaders said. “We’re waiting for the administration to send us something. They haven’t sent us anything yet,” Schumer told reporters.

Some party aides acknowledged it had become a deliberate, delicate dance, reflecting an attempt to keep Congress focused on solidifying government funding levels without adding any other political complications.

The issue also did not come up in a significant way during a meeting Tuesday between the leaders of the House and Senate appropriations panels, according to Shelby. Earlier in the day, he echoed the sentiment of other Republicans who have said lawmakers first need a fuller accounting of the fact there is “a lot of money unspent out there.”

In recent months, budget hawks in both parties have raised alarms about the country’s growing debt, which the Treasury Department said this week had topped $30 trillion. Debt has accumulated more rapidly in the past two years because of emergency stimulus initiatives enacted to address fallout from the pandemic. But some economists across the political spectrum still estimate that the total amount of U.S. borrowing is actually lower than it appears – pointing to the way Social Security is counted in particular.

The Congressional Budget Office, meanwhile, has projected that the government will spend around $5.5 trillion in the current fiscal year, down significantly from spending in 2020 and 2021 because of the expiration of earlier pandemic relief funds. The CBO also has estimated that the government will bring in close to $4.4 trillion in revenue this year, leading to a deficit of around $1.15 trillion, roughly one-third the size of the yearly shortfall for 2021.

For now, some Democrats said they do still see a potential opening for a sprawling package to come to fruition, with coronavirus aid in particular tacked onto a deal to fund government operations. But, they concede, it depends on whether lawmakers can take the next step in brokering such an agreement in the first place.

“I do think we’re going to be able to put those pieces together,” said Sen. Chris Van Hollen, D-Md., a member of the Senate Appropriations Committee. “But again we don’t yet have a critical mass over here on covid relief or the omnibus.”