The House of Representatives last week passed a two-year, $2.7 trillion budget deal. The Senate passed the deal on Thursday, and President Trump is expected to sign it into law. The Bipartisan Budget Act of 2019 passed the House with 284 votes including 219 Democrats and 65 Republicans. It passed the senate 67-28, drawing all of the Democrats and half of the Republicans. According to POLITICO, had the bill not passed, there would have been more than $120 billion in new sequestration cuts this coming January.
Here are five facts on the bill and its anticipated long-term impact:
According to The Washington Post, the spending bill will increase total discretionary spending, or money controlled by Congress, significantly in the coming fiscal years. The increase will go from $1.32 trillion this fiscal year to $1.37 trillion the following fiscal year and $1.375 trillion in fiscal year 2021. This amounts to over $320 billion, which will add hundreds of billions of dollars to the annual budget deficit.
The spending bill includes $1.48 trillion for the military over the next two years, which is more than the $1.3 trillion allocated for the rest of the government. The Military Times reports that the $738 billion in military funding allocated for fiscal year 2020 is a three percent increase from current spending levels. Since taking office, President Trump has consistently increased military spending; in fiscal year 2018, military funding was roughly $700 billion.
The spending bill also permanently ends “budget control caps,” which were put in place in 2011 by the Budget Control Act. This bill raised the debt limit by $2.4 trillion and capped discretionary spending; however, the new bill sets guidelines that supersede the Budget Control Act until it expires at the end of 2021.
Even though the Budget Control Act will expire there are no provisions in the spending bill to enforce fiscal responsibility. Many Republicans cited this reason for voting “no” on the spending bill. In the future, new strategies will be needed to close the budget gap.
While the bill had bipartisan support, it does not address the country’s long-term budget problems. The state of the country’s finances remains concerning to many. Today, the national debt is $22 trillion, and the deficit is close to $1 trillion annually. U.S. News and World Report notes that interest payments will increase by $7 trillion in the coming decade and the government will spend more on interest than national defense by 2025.
