Why Congress’ budget solution might not avert a shutdown
Judy Woodruff: Wall Street's wild ride took it way south again today, as fears of coming inflation and higher interest rates overcame U.S. markets.
The Dow Jones Industrial Average dropped more than 1,000 points for the second time this week, to close at 23,860. The Nasdaq fell almost 275 points, and the S&P 500 gave up 100. Both the Dow and S&P are down 10 percent from their highs of just two weeks ago. That officially signals what experts call a correction.
Our other major story tonight- Deal or no deal on the federal budget? U.S. Senate leaders labored all day to pass a funding bill that keeps the government running. The House of Representatives waited to cast its own vote, as time ticked away.
Lisa Desjardins reports.
Lisa Desjardins: At the Capitol, hours away from another government shutdown, a sweeping solution with admitted flaws.
Sen. Mitch McConnell: I am confident that no senator on either side of the aisle believes this is a perfect bill.
Lisa Desjardins: Still, Senate leaders pushed their mega-budget deal as a way to avoid a shutdown and end budget uncertainty.
Sen. Mitch McConnell: But I'm also confident this is our best chance to begin rebuilding our military and make progress on issues directly affecting the American people.
Sen. Chuck Schumer: And it's a strong signal that we can break the gridlock that has overwhelmed this body and work together for the good of the country.
Lisa Desjardins: But as the midnight funding deadline drew closer, the Senate floor was mostly empty. That's because a single senator, Republican Rand Paul of Kentucky, objected to an immediate vote, saying he would keep objecting unless the Senate had a chance to reduce the spending in the budget deal.
This as most members were still digesting the dense 652-page final bill released overnight. In it, a big boost for defense spending, over $160 billion over the next two years. For non-defense, a $130 billion increase. The packed proposal also includes funding for community health centers, a 10-year extension of the Children's Health Insurance Program, and nearly $90 billion in disaster aid for areas hit by last year's hurricanes, wildfires and other disasters.
But more than two-thirds of the bill's spending is unpaid for, a major concern for fiscal conservatives.
To Republican Senator Jeff Flake of Arizona, it's a bad deal and bad direction.
Sen. Jeff Flake: I love bipartisanship. It seems like the only bipartisan measures we can do now is when we just spend obscenely and spread enough money around where everybody's OK. And we just can't do that anymore. We have done that too long. So, it's just too bad.
Lisa Desjardins: Separate hurtles await the bill in the House.
Rep. Nancy Pelosi: I'm just telling people why I'm voting the way I am voting.
Lisa Desjardins: Democratic Minority Leader Nancy Pelosi says she won't vote for the bill. Today, she again called for House Speaker Paul Ryan to guarantee a vote on protections for DACA recipients brought to the U.S. illegally as children. Senate Majority Leader Mitch McConnell has already made that promise.
The speaker, who likely needs Democratic votes to pass the bill, insisted that he is committed to a DACA solution. But, he added, the budget must come first.
Rep. Paul Ryan: In order to shift our focus and get on to the next big priority, which is a DACA solution, we got to get this budget agreement done. I'm confident we can bring a bipartisan solution to the floor that can get signed into law and solve this problem.
Lisa Desjardins: First, Congress still has to pass a funding bill, with just hours until a shutdown.
But as we speak right now, Senator Rand Paul's on the Senate floor still objecting, still blocking a vote on this bigger budget bill. And, of course, Judy, that means blocking the funding that would avert a shutdown.
Judy Woodruff: So we are, what, six hours away from when they have to do something. Where do things stand?
Lisa Desjardins: Yes.
OK, let's game this out. In truth, if the Senate were to pass something at this exact instant, it could still take six to seven hours for them to get the bill to the House and have the House be able to vote.
So, Judy, I think at this moment because of the delays in the Senate primarily, we will have technically a shutdown. It could be a few hours into the overnight. I think what's going to happen is this battle will be determined in the dark, in the midnight hours, where we have seen the most ferocious fights of this past year happen.
And to be honest, Judy, we don't know yet if there are the votes on the House side to pass this bill. It seems so, but it's not clear.
Judy Woodruff: So, let's step back just a moment, as you started to do there.
Lisa Desjardins: Yes.
Judy Woodruff: Talk about this budget bill and how this process works at this point.
Lisa Desjardins: Right.
It's important to realize what this large budget bill is, is permission to spend more. It's guidance and maximum amounts that they can spend. They're raising the maximum amounts, but they're not saying exactly how you can spend it.
To do that, Congress wants another six weeks of time to do the normal appropriations bills. So this bill does two things. It raises those maximum spending amounts and it has a continuing resolution, or one last short-term funding bill, that would go to March 23.
That's the item that's most imperative to avoid a shutdown, that short-term C.R., or continuing resolution, but they're tied together, and right now they're both being blocked.
Judy Woodruff: So, I watched your report last night. You got into some of what is in this bill, but flesh out some more of it for us.
Lisa Desjardins: Right.
Let's talk about some key things. A lot of folks concerned about the opioid crisis. I mentioned there's $6 billion worth of funding. Let's have some perspective on that. That's not much compared to the $25 billion that was recently requested from senators in high-impact states.
Now, another thing, the military. We hear a lot about that and this $160 billion increase in their annual budget over the next two years. What other people don't talk a lot about, Judy, is there's also another $160 billion for the military in something called the overseas contingency fund.
It's emergency funding that's actually been kicked around year after year. It has become an annual spending item. So, the military getting an even bigger increase than people realize. There's also a slew of tax extenders, NASCAR, racing horses, Indian reservations, plug-in cars, many, many dozens of the tax cuts in this bill.
Judy Woodruff: So we heard Senator Flake lamenting what does this does to spending. There is an increase in the debt ceiling included here.
Lisa Desjardins: That's right.
Judy Woodruff: Tell us a little bit more about how that works. What does this bill do to the debt?
Lisa Desjardins: So, the debt ceiling would be increased for a year, not by a nominal amount, but just by however much it naturally grows until next March, March 2019.
Now, then you also look at what does this bill do itself in terms of the red ink. Well, if the spending amounts in this bill were extended over 10 years, it would be $1.5 trillion added to the deficit. Let's add that on top of the other bill recently passed, the tax cut law, another $1.5 trillion over 10 years, two big bills from Republicans.
But compare that to TARP, the Troubled Assets Relief Program. Remember that that was so unpopular to save the banks, and the Obama stimulus?
Judy Woodruff: Yes.
Lisa Desjardins: Those two things, TARP and the Obama stimulus, $1.5 trillion together, and that is what the amount of each of these bills would add to the deficit. So, the Republicans didn't like those two bills earlier. That's what started the Tea Party movement.
Instead, now they're passing two different bills that would add that much red ink, each of them.
Judy Woodruff: Ten years later.
Lisa Desjardins: Yes.
Judy Woodruff: And just very quickly, we heard Speaker Ryan talk about immigration. Where does immigration come down here?
Lisa Desjardins: Right.
Roll up your sleeves. It is going to be a major debate in the Senate next week. Senator McConnell has said he's not starting with any particular immigration bill, but instead allowing all the amendments that people want to come to the floor. He says it will be a fair process. We will have to see the exact rules.
It could take more than a week for the Senate to run through all the different ideas that senators have and to vote on all of them. But get ready. Next week will be a very big one in the Senate.
Judy Woodruff: I have a feeling the midnight oil in the Desjardins household may be burning.
Lisa Desjardins: That's right. A lot of federal workers are going to be up late figuring out if they go to work tomorrow or not.
Judy Woodruff: Appreciate it. Lisa Desjardins, here we go again.
Lisa Desjardins: Yeah.
Judy Woodruff: Thank you.