Insights into Federal Fiscal Priorities if Congressional Majority Changes in 2021

As our members know, many disability programs including Medicaid (a federal-state partnership), employment supports, food assistance and housing assistance rely on federal funding. The reporting below by Politico Pro gives insights into how the federal budget could shape up as lawmakers prepare their post-election plans, which could help inform our members’ advocacy efforts. As explained in this article, 2021 will be significant because an existing budget deal capping spending will expire, creating an opportunity for lawmakers to renegotiate and redefine budget priorities for fiscal year 2022 in a more significant manner than they have in previous years.

“Democrats are eyeing aggressive budget and spending plans if they sweep in November, aiming to deploy every fiscal tool at their disposal to deliver major investments in infrastructure, clean energy, child care and more.

Congress is already heading into a big budget year, regardless of the outcome on Election Day. After a decade of enduring strict budget caps and operating under the threat of automatic spending cuts, lawmakers face no overall limits on defense and non-defense discretionary spending for fiscal 2022. Washington will also have to again grapple with raising the debt limit on federal borrowing next summer in order to stave off calamity.

But the main event — if Democrats control the White House, Senate and House — will be budget reconciliation. Originally designed to reduce the deficit, the procedure has been used by both parties in recent years to enact a sometimes-costly agenda while evading the Senate filibuster. Democrats used reconciliation to pass much of the Affordable Care Act, while Republicans tapped it for their 2017 tax overhaul.

Senior Democrats are already eyeing the special legislative vehicle to disperse trillions of dollars in policy priorities, including for a massive infrastructure plan backed by a prospective Biden administration.

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Rep. Pramila Jayapal (D-Wash.), a Budget Committee member who also serves as co-chair of the Congressional Progressive Caucus, said reconciliation presents Democrats with an opportunity to make extensive investments in infrastructure, clean energy, health care and other areas.

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It’s also possible that Democrats would turn to reconciliation for a massive health care expansion if the Supreme Court strikes down the Affordable Care Act, said Rep. Debbie Wasserman Schultz (D-Fla.), a senior appropriator.

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Reconciliation will be especially necessary if Democrats win a majority in the Senate and choose not to not eliminate the filibuster’s 60-vote threshold, Yarmuth said. Under reconciliation procedures, only a simple majority is needed to pass legislation in the Senate, though certain limitations apply.

But first, lawmakers may have to address some unfinished business from the previous Congress. Democratic leaders have signaled their first priority would be another multi-trillion-dollar coronavirus relief package if Congress and the Trump administration can’t reach a deal by early next year. Lawmakers may also have to finalize appropriations bills for the current fiscal year if they punt a Dec. 11 government funding deadline into early 2021.

Beyond that, Congress is effectively entering new budget territory. A two-year budget deal struck by congressional leaders and the White House last summer carried lawmakers through the final years of the 2011 Budget Control Act, which established caps on how much money Congress can spend for a decade.

Now, there are no restrictions in place for fiscal 2022, meaning lawmakers will have to decide how to approach overall totals for defense and non-defense discretionary spending next year. Those levels are set at $740.5 billion and $634.5 billion in fiscal 2021, respectively.

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More broadly, [Chair of the House Budget Committee John] Yarmuth said he wants to shift the conversation away from worries over widening deficits toward how Congress can make sizable but effective investments for the country.

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Some House appropriators are also eyeing a return to the politically taboo practice of earmarked spending, albeit with stronger transparency and oversight controls. While the notion has raised some concerns among the most vulnerable House Democrats, there’s growing demand for a system to ensure that members once again have the chance to secure cash for projects at home.”