Disputes Stall Work on $1.2 Trillion Spending Bill in Congress

(Bloomberg) -- Republican attempts to cobble together a comprehensive $1.2 trillion spending bill stalled late Monday, pushing House and Senate votes on the package closer to a deadline at the end of the work week to keep the government operating.

Lawmakers, who’ve had a month to work out the details of a budget agreement aimed at ending a cycle of stopgap measures, blew past another target to finish their work as disagreements persisted over immigration, border security, tax breaks and a tunnel under the Hudson River between New York and New Jersey.

Current government funding expires at the end of the day Friday. With the latest delay in completing the spending package, a vote in the House may be pushed to Thursday with the Senate following suit by Friday. But any disruption in the process risks triggering a temporary weekend shutdown of government operations.

Wall and Tunnel

House Republicans emerged from a late-afternoon meeting saying that Speaker Paul Ryan told them decisions still hadn’t been made on whether to fund President Donald Trump’s border wall or to provide $900 million for the Hudson rail project, known as Gateway, which Trump opposes. A late-night leadership negotiating session failed to resolve all the outstanding issues, causing Ryan’s conference to abandon attempts to release the bill before Tuesday.

"We’re working on it," said House Appropriations Chairman Rodney Frelinghuysen, a New Jersey Republican. He is one of the lawmakers pushing to finance the Gateway project.

The measure would increase spending on the military by $80 billion and on domestic programs by $63 billion over previous budget limits as set out in the bipartisan budget agreement that ended a February shutdown. The higher spending for non-defense programs was the price Democrats demanded in the face of Trump’s 2018 budget proposal to cut domestic levels by $54 billion.

Border security and immigration have repeatedly stymied agreements in Congress. Democrats have tried to link financing for Trump’s wall at the Mexican border to protection from deportation for undocumented immigrants brought to the U.S. as children. The president has demanded other changes in immigration law in return. The White House has floated temporary protections in exchange for some $25 billion in wall funding during the talks over the bill, an offer Democrats have rejected.

One potential solution to the standoff may be skipping changes to immigration law and using the $1.6 billion allocated for a wall in the original draft legislation for wider border security.

Congress has been at loggerheads with the White House over Gateway, which would provide a crucial rail link between New York and New Jersey. The project would supplement a decaying century-old tunnel damaged by saltwater flooding from Hurricane Sandy in 2012. That tunnel provides the only direct train link between New Jersey and Manhattan for New Jersey Transit and Amtrak, and helps bind the entire Northeast corridor to the New York area.

Trump has told Ryan and other lawmakers he doesn’t want it in the spending bill. His objection is in part because New York’s Chuck Schumer, the Democratic leader in the Senate, had held up the nomination of several of Trump’s nominees, according to people familiar with the president’s thinking on the issue. Senate Majority Leader Mitch McConnell also is known to have reservations about sinking a lot of money into the project.

Several other provisions that had been sought by some lawmakers are being left out or remain unresolved.

Ryan told members that the spending measure, which would finance the government through the end of September, won’t include a provision to stabilize Obamacare costs after Democrats balked at anti-abortion restrictions, lawmakers said.

That part of the package had been sought by Republican Senators Lamar Alexander of Tennessee and Susan Collins of Maine, who argued that premiums for health insurance bought on Obamacare markets could be 40 percent lower if Congress passes the package than they would be if under the status quo.

Also unresolved is whether to include a revision to the tax law passed in December to change tax breaks for agricultural grain cooperatives. The tax breaks are opposed by grain companies.

Lawmakers may have to pass another stopgap spending bill, because as the Friday deadline nears, a senator could hold the floor long enough to cause a brief shutdown. That’s what Republican Senator Rand Paul of Kentucky did last month, causing an overnight shutdown until Congress passed a spending bill before dawn.

The GOP agenda has been rapidly thinning out, raising the possibility that the spending bill will be the last major legislation to clear Congress before this year’s congressional election, when Republicans are at risk of losing control of both the House and Senate.

The bill is expected to carry temporary extensions of the National Flood Insurance Program, EB-5 investment visa program and Federal Aviation Administration fee collection activities. It is also likely to carry limited changes to gun regulations to improve a federal database as well as an increase in school safety funding.

To contact the reporter on this story: Erik Wasson in Washington at ewasson@bloomberg.net.

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo

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