Since the Budget Control Act (BCA) of 2011 was enacted, the defense world has become accustomed to fiscal uncertainty in the form of sequestration, continuing resolutions and government shutdown. However, the upcoming resignation of House Speaker John Boehner (R-Ohio) announced Friday could throw an even bigger wrench into the equation.
Over the past few weeks, rumors have swirled that conservative Republicans —namely the 42 members of the Freedom Caucus headed by Rep. Jim Jordan (R-Ohio)—could move to oust Boehner should the speaker avoid government shutdown by banding with House Minority Leader Nancy Pelosi (D-Calif.) to pass a “clean CR” that includes federal funding for Planned Parenthood.
But with Boehner’s departure imminent at the end of October, lawmakers and analysts said that it seems more likely that the House and Senate will be able to pass a short-term spending bill before the new fiscal year starts on Oct. 1.
“I think we’ll pass [a clean CR] next week,” House Appropriations Committee Chairman Hal Rogers (R-Ky.) said Friday morning after the speaker announced his resignation.
The big question is what happens after that. Todd Harrison, director of defense budget analysis and senior fellow at the Center for Strategic and International Studies, said the change in leadership may make it more difficult for lawmakers to negotiate a “grand bargain” budget deal that raises the BCA spending limits for defense and non-defense.
“Initially it appears his resignation may have mollified members of the Freedom Caucus so that they will accept a clean short-term continuing resolution. But it has created more uncertainty about whether Republicans and Democrats will be able to reach a deal on the overall FY ’16 budget once that short-term CR expires in December,” he said in an email to Defense Daily. “Without Republican leadership in the House, it’s unclear who would even be empowered to negotiate such a deal. I think this raises the probability of a full-year CR, which would be unprecedented for DoD.”
Boehner’s resignation may have placated the Freedom Caucus enough to avoid a shutdown in October, but one in December has just become increasingly likely, said Mackenzie Eaglen, a defense budget expert with the American Enterprise Institute.
“Everything is still unanswered and unsettled at that point, and in fact, it will be worse off,” she said. “House Republicans are going to watch the debt ceiling be increased without their approval. [Democrats] are going to reauthorize the highway bill again…And those [Republicans] that are spoiling for a fight on Planned Parenthood are not going to take this moment and move on.”
Those GOP losses will likely trigger another even bigger budget battle come December—one that could end in a government shutdown or yearlong CR, she said.
The Freedom Caucus “is emboldened and empowered, and they want a yearlong CR. They see that as a victory because it’s locking in BCA,” Eaglen said. “A mini budget deal breaks the caps, and it’s going to have to be paid for in part by debt ceiling, and that’s a huge loss for this group.”
“And a yearlong CR becomes a two yearlong CR, that is a certainty,” she said. “I couldn’t think of anything worse for the Pentagon.”
In the coming weeks Republicans will vote to replace Boehner with a new speaker. The early frontrunner is House Majority Leader Kevin McCarthy (R-Calif.).
McCarthy has reached out to the defense community during his tenure in House leadership, but if takes over for Boehner, he will have to be conciliatory toward the Freedom Caucus or risk meeting the same fate, Eaglen said.
The change in leadership could impact broader budget negotiations, Rogers said. “I hope not, but the new team has to get their feet on their ground, so it may cause a little bit of a delay.”
House Armed Services Committee Chairman Mac Thornberry (R-Texas) is optimistic that the change in leadership would not affect lawmakers’ ability to resolve budget issues before a December deadline, he told reporters during a news conference Friday.
But a longterm CR would be an unacceptable outcome, he added.“The U.S. military and our national security cannot be adequately protected with a longterm CR, which is roughly the same amount as if sequestration kicks in and the caps are reduced.”