The 2025 Spending Fight Has Officially Begun — and It’s Going to Be Big

Plus: House releases $1.5 trillion farm bill ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ [The Fisc](   By Yuval Rosenberg and Michael Rainey Happy Friday and let’s go Knicks in six! Here’s your weekend fiscal update. (iStockphoto/TFT) The 2025 Spending Fight Has Officially Begun — and It’s Going to Be Big November’s presidential election looms over the appropriations process for 2025, as members of Congress will want to wait to see who wins the White House and which party can exert leverage over spending plans. But after a prolonged and painful process this past year, there are already signs that funding the federal government for 2025 will once again involve significant tension as Republicans and Democrats clash over non-defense spending levels in particular. “It’s going to be a big fight,” Sen. John Cornyn of Texas said, according to [The Hill](. The Fiscal Responsibility Act that codified a bipartisan budget deal last year calls for both defense and non-defense to rise by 1% for fiscal year 2025. Republicans and defense hawks say that doesn’t make sense given the global threats the country faces. Democrats insist that spending on healthcare, infrastructure and other programs is essential — and that parity has been the key to getting appropriations done in recent years. House Republicans outline spending plans: House Appropriations Chairman Tom Cole on Thursday announced GOP spending allocations for 2025, including a topline just over $1.6 trillion, or $895 billion for defense and about $711 billion for non-defense spending. The defense figure represents an increase of nearly $9 billion, or just over 1%, and Cole proposes to fund Homeland Security above the president’s request. Non-defense programs, meanwhile, “will be cut effectively by 6%, and those cuts are not evenly distributed,” according to a release from the committee. Some subcommittees, including Labor, Health and Human Services and Education, would be in line for cuts of 10% or 11%. “In the face of an aggressive schedule and fiscal constraints, we will demonstrate responsible governance and safeguard hard-earned tax dollars,” Cole said in a statement. “The bills written by this Committee will adhere to law set by the Fiscal Responsibility Act—with no side deals—and focus resources where they are needed most.” Cole also released a markup schedule that would have the committee complete work on all 12 annual appropriations bills by July 10. “This is a very ambitious schedule,” writes John Bresnahan at [Punchbowl News](. “House Majority Leader Steve Scalise has told us that he wants to pass all 12 bills on the floor before the August break. There’s almost zero chance it actually happens, yet this is House Republicans’ starting position.” Democrats demand parity: Democrats say that the GOP’s starting position violates the funding deal the parties reached last year and sets the stage for a repeat of the troubled 2024 process. They insist that non-defense spending should be treated the same as defense programs. “This is the exact same process we saw play out last year,” Rep. Rosa DeLauro of Connecticut, the top Democrat on the Appropriations Committee, said in a statement. “A process where House Republicans, held hostage by their most extreme members, led us from one shutdown threat to another. It was messy, chaotic, harmful, and embarrassing for House Republicans who could not pass their own funding bills. It ended with the majority realizing they could not pass bills without House Democrats. The only difference between last year and this year is that their majority is even smaller. I call on Republicans to rethink the funding levels they released. Increase nondefense and defense funding levels by at least one percent as agreed to almost a year ago today.” DeLauro and Democrats say that non-defense spending should be at least $786 billion, or $75 billion above the Republican proposal. Battles brewing in the Senate, too: The disagreements are also playing out on the Senate side, where appropriators were able to work in a more bipartisan fashion for 2024. Sen. Patty Murray, who heads the Senate Appropriations panel, is seeking equal increases for defense and non-defense. “For me the word of the day, today and every day until we pass our funding bills, is going to be ‘parity,’” Murray reportedly said earlier this month. But Republican Leader Mitch McConnell has already said he won’t agree to dollar-for-dollar parity. “I can’t accept that at all,” McConnell said last week, as The Hill’s Alexander Bolton [reports](. McConnell argues that the threats from Russia, China, North Korea, Iran, and terrorist groups make this the most dangerous time since the fall of the Soviet Union and demand significant military spending increases that don’t need to be matched on the non-defense side. “We can’t let partisan spending priorities hold the common defense hostage,” McConnell said earlier this month. “It’s time to acknowledge that the growing threats to our peace and prosperity deserve our utmost attention.” Sen. Susan Collins of Maine, the top Republican on the Appropriations Committee, agrees with McConnell. “Given how underfunded defense is and the global threats we face, I don’t think parity can be achieved,” she said, according to The Hill. Democrats reportedly counter by pointing out that the $95 billion supplemental package Congress just approved for Ukraine, Israel and the Indo-Pacific included billions more in defense spending. What’s next: Appropriators have reportedly discussed a spending patch that would extend current federal funding into February, allowing lawmakers to focus on the final weeks of the election campaign — and, from the perspective of some Republicans, allowing Donald Trump to have a say in the process if he’s elected. The bottom line: Fiscal fights may take a backseat to campaign clashes from now until November, but they’re already starting and they’re going to be major. And the spending battle may just be a preview of an even bigger one over expiring tax provisions. House Releases $1.5 Trillion Farm Bill, Teeing Up Duel With Senate Lawmakers in the House released a long-awaited $1.5 trillion farm bill on Friday, kicking off an effort to complete one of the few remaining major pieces of legislation left in the current Congress. The bill touches on numerous contentious issues, however, and there is no guarantee it will pass before the end of the year. The farm bill, which funds nutrition, commodity and conservation programs, is typically renewed every five years, though the last one ended in 2023 and is now operating under a one-year extension that expires at the end of the fiscal year in September. Released by House Agriculture Committee Chair G.T. Thompson, a Republican from Pennsylvania, the 942-page Farm, Food, and National Security Act of 2024 will be marked up in committee next week. The bill in its current form includes provisions that have drawn significant criticism from Democrats, raising questions about its ability to win approval in the House or succeed in being reconciled with a separate version offered by Senate Agriculture Chair Debbie Stabenow, a Democrat from Michigan. One particularly controversial provision would change the way benefits in the Supplemental Nutrition Assistance Program (SNAP) are calculated. Future increases in benefits would reflect inflation only, while restricting the Department of Agriculture's authority to update cost estimates using real-world grocery budgets. The rule change would save an estimated $27 billion over 10 years. Rep. David Scott, the senior Democrat on the Agriculture Committee, slammed the proposal. “House Republicans plan to pay for the farm bill by taking food out of the mouths of America’s hungry children,” he said in a statement. “The economic impact of the SNAP cuts alone would be staggering. A $27 billion reduction in food purchasing power would not only increase hunger, but it would also reduce demand for jobs in the agriculture, transportation, manufacturing, and grocery sectors.” Thompson rejected the Democratic criticism, saying that the upcoming markup process “should not be compromised by misleading arguments, false narratives, or edicts from the Senate.” After meeting with House Democratic Leader Hakeem Jeffries earlier this week, Stabenow and Scott released a joint statement calling on House Republicans to offer a bill that can gain bipartisan support. “House Republicans are undermining this goal by proposing policies that split the broad, bipartisan coalition that has always been the foundation of a successful farm bill,” they said. “We need a farm bill that holds the coalition together and upholds the historic tradition of providing food assistance to our most vulnerable Americans while keeping our commitment to our farmers battling the effects of the climate crisis every day.” The bottom line: House lawmakers will battle in committee next week over the massive bill, with a particular focus on food assistance programs, which account for about 80% of the overall spending level. The real fight, however, is likely to be with the Senate, where Democratic leaders have vowed to avoid any cuts to nutritional programs. “I want a farm bill,” Stabenow [told]( The New Republic’s Grace Segers last week, “but we’re not going to go backward on nutrition.” --------------------------------------------------------------- Send your feedback to yrosenberg@thefiscaltimes.com. And please encourage your friends to [sign up here]( for their own copy of this newsletter. --------------------------------------------------------------- Fiscal News Roundup - [House Unveils $1.5 Trillion Farm Bill After Long Delay]( – Politico - [McConnell, Collins on Collision Course With Democrats Over Spending Parity]( – The Hill - [Greene Fracas at Hearing Leaves Lawmakers Shaking Their Heads]( – The Hill - ["Dumpster Fire" Hearing Spurs Groans About Congress' New Low]( – Axios - [CFPB Readies Crackdown on Predatory Lending After Supreme Court Win]( – Washington Post - [Florida Republican Willing to Buck Leadership to Bring Tax Relief Bill to House Floor With Help of Democrats]( – CNN - [BlackRock’s Rieder Says Cut, Not Hike, to Tame US Inflation]( – Bloomberg - [Key Conservative Group Advises Trump: More Tax Cuts, No Tariffs]( – Bloomberg Views and Analysis - [Voters Prefer Trump Over Biden on Economy. This Data Shows Why]( – Mark Niquette et al, Bloomberg - [Trump Promises Tax Cuts and Fewer Rules. CEOs Shouldn’t Fall for It]( – Washington Post Editorial Board - [Are the Republicans Sneakily Trying to Cut Food Stamps?]( – Grace Segers, New Republic - [The CFPB Ruling Strikes a Blow for Governing]( – David Dayen, American Prospect - [The Medicare Bubble Has Burst]( – David Wainer, Wall Street Journal - [Markey Targets Private Equity in Health Care]( – McKenzie Beard, Washington Post - [Where’s the Bond Market’s Breaking Point? It’s Not $35 Trillion]( – Robert Burgess, Bloomberg - [Biden Moves Could Help Shape Political Landscape in His Favor]( – Tyler Pager, Washington Post Copyright © 2024 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website or through Facebook. The Fiscal Times, 399 Park Avenue, 14th Floor, New York, NY 10022, United States Want to change how you receive these emails? 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