Finance

Trump's plan to claw back spending hits wall in Congress

President Trump's plan to claw back more than $15 billion in spending is on life support on Capitol Hill. 

GOP leaders insist they are open to Trump's proposal, which comes after Republicans faced a backlash for passing a mammoth, $1.3 trillion spending omnibus that shredded federal budget caps. 

But despite the GOP's broad desire to cut spending, it appears increasingly unlikely that the legislation will reach Trump's desk, with Republicans in both chambers expressing opposition.

House moderates are worried, their colleagues say, that Democrats could weaponize the package against them in the midterm elections - where many of them are already facing strong headwinds.

 "I could see some competitive seaters saying, 'Why, why?' " said Rep. Ryan Costello (R-Pa.). "The messaging, you just give to the Democrats and say, 'Here, hammer us with this,' because it's an idiosyncratic accounting issue." 

The main political issue is that nearly half the funds that Trump wants rescinded - $7 billion of the $15.4 billion total - come from two accounts in the Children's Health Insurance Program (CHIP). The administration, backed up by an analysis from the Congressional Budget Office (CBO), says the rescissions would not impact CHIP spending over the next decade.

But for imperiled House Republicans, voting to remove funds from a children's health account provides easy fodder for attack ads.

"I think some members are worried about the CHIP portions of it," said Rep. Tom Cole (R-Okla.), an appropriator.

"They shouldn't be. I think they know logically that $5 billion of this you can't spend, so we might as well take it back. Another $2 billion of it is in a program that, if states need it, it's available, but we never spent more than $350 million out of that program and we're leaving $500 million in. So it's more that they're worried about the optics politically," he said.

With House leadership scrambling to revive the farm bill and quash a rebellion on immigration, lawmakers warn that Trump's proposal could be pushed to the back burner. Leadership hoped to bring it to the floor next week, but it appears likely to get kicked to June, giving more time for opposition to build.

"It's not the focus. They are being talked about, but I don't know if it's on the top three [agenda items]," said Rep. Mark Meadows (R-N.C.), the chairman of the House Freedom Caucus. Pressed if the rescissions package was a top priority right now, he shook his head no.

The administration is requesting Congress approve a package to claw back $15.4 billion in spending from previously approved funds. Lawmakers have 45 days to approve the measure if they want to avoid the 60-vote Senate filibuster.

Even if the bill manages to pass the House, it is likely to run aground in the Senate. Republicans' already fragile 51-seat majority is effectively capped at 50 with GOP Sen. John McCain at home fighting brain cancer in Arizona.

Still, GOP leadership say they've warmed up to the rescissions package after Majority Leader Mitch McConnell (R-Ky.) rejected the idea of using it to take back money from the omnibus. That move would have broken the deal that Republicans made with Democrats to pass the legislation.

"My understanding of the rescission package is that it does not breach the bipartisan agreement we reached in the caps deal. If the House is able to pass the rescissions package, we'll take a look at it," McConnell told reporters recently.

McConnell's comments, while not a ringing endorsement, were more positive than when the White House first floated the plan of canceling spending in the omnibus. He repeatedly closed the door on that idea. 

Republicans have no room for error if they want to be able to pass a rescissions package without leaning on support from Democrats, who condemned the legislation largely because it, in part, targets the CHIP funds.

Yet other key senators - including GOP Sen. Richard Shelby (Ala.), the chairman of the Appropriations Committee - are concerned the administration's new plan would target their legislative priorities.

Shelby, while noting he was evaluating the rescissions package, floated that it "could take funds away from a lot of us in the South, on transportation. And that's not going to be a very popular thing."

In addition to Shelby, several other GOP senators have registered concerns, including Sens. Susan Collins (Maine), Shelley Moore Capito (W.Va.) and Lisa Murkowski (Alaska).

"I have shared several of my concerns with [Budget] Director [Mick] Mulvaney. ... A lot of it has to do just with the fact that we have directed that spending and rescissions effectively take that away from us as the Congress," Murkowski said.

Some Republicans also see the bill as little more than a public relations exercise. The CBO analysis of the bill found that despite zapping $15.4 billion worth of budget authority, the focus on unobligated accounts meant it would only reduce spending by about $1 billion over a decade. That figure amounts to a drop in the bucket compared to annual expenditures of over $4 trillion.

Losing even one GOP senator means Republicans wouldn't be able to pass the rescissions bill without help from Democrats, who are making it clear they will not put up votes to help McConnell overcome defections.

Senate Minority Leader Charles Schumer (D-N.Y.) warned that the package could do "real damage."

"To go forward with these rescissions, to bow to the right wing after they voted for a $1.5 trillion deficit, causing tax increase, will hurt the ability of the appropriations process to move forward," he said. 

Democrats also seized on the new Ebola outbreak in Congo to criticize the rescissions package. The bill proposes clawing back $252 million in remaining funds designated for fighting the last major Ebola outbreak in 2015.

There are some signs that the rescissions package isn't set in stone and that changes could be made to win over lawmakers.

Murkowski said she had spoken with Mulvaney and he appeared open to making changes. Shelby, meanwhile, indicated that he has not spoken with the administration, noting the measure still needed to get through the House.

Asked if the administration should have gotten his sign-off as the chairman of the Appropriations Committee before pitching a spending-related package, he noted that rescissions "haven't done very well" in Congress.

"[Put it] in the context of ... what it does. What it doesn't do. Is it more optics than substance, you know?" 

Shelby declined to say which category he believes Trump's plan falls under, adding that he was "reserving my options."

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