Breaking Bipartisan Agreement: Congress Sets Federal Spending, Averts Shutdown, But Battles Over Policy Riders Loom

The bipartisan agreement, as outlined in a letter to colleagues by Speaker Mike Johnson, R-La., sets the federal government's discretionary spending at a maximum of $1.59 trillion. This figure includes $886 billion allocated for defense and $704 billion for nondefense spending.

The $1.59 trillion figure was a product of an agreement necessitated by the Fiscal Responsibility Act (FRA) last year. This compromise was reached during debt limit discussions between President Biden and then-Speaker Kevin McCarthy, R-Calif. Democratic leaders have indicated that the final top line will also incorporate an additional $69 billion in nondefense discretionary spending, a component of a side deal between McCarthy and Biden. This inclusion would bring the total to approximately $1.66 trillion.

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In his letter, Johnson revealed that the new agreement would necessitate some additional cuts to discretionary spending to balance the deal. "As has been widely reported, a list of extra-statutory adjustments was agreed upon by negotiators last summer. The agreement today achieves key modifications to the June framework that will secure more than $16 billion in additional spending cuts to offset the discretionary spending levels," Johnson wrote.

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He further explained that the Senate had marked up their appropriations bills $14 billion above the FRA levels and the adjustments. The agreement reached today, he said, allows for none of that funding, and combined with the additional savings described above, results in an overall $30 billion total reduction from the Senate’s spending plans.

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A GOP aide emphasized that the top line agreement would ultimately represent a cut to the McCarthy-Biden agreement struck last spring. "This deal has the same levels of spending as the FRA deal except with billions more in cuts. Republicans put the screws to Democrats one more time," the aide informed Fox News Digital.

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Johnson acknowledged in his letter that "these final spending levels will not satisfy everyone, and they do not cut as much spending as many of us would like" but added, "this deal does provide us a path to: 1) move the process forward; 2) reprioritize funding within the topline towards conservative objectives, instead of last year’s Schumer-Pelosi omnibus; and 3) fight for the important policy riders included in our House FY24 bills."

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Democrats also celebrated the deal. Senate Majority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y., released a statement on Sunday declaring that the agreement "clears the way for Congress to act over the next few weeks in order to maintain important funding priorities."

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However, a showdown is still on the horizon. Johnson made it clear that he still wants conservative policy riders included in the final spending agreement. Schumer and Jeffries responded to Johnson's effort in their statement, "we have made clear to Speaker Mike Johnson that Democrats will not support including poison pill policy changes in any of the twelve appropriations bills put before the Congress."

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President Biden also expressed opposition to House Republicans while praising the deal. "It reflects the funding levels that I negotiated with both parties and signed into law last spring. It rejects deep cuts to programs hardworking families count on, and provides a path to passing full-year funding bills that deliver for the American people and are free of any extreme policies," he said of the deal.

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He urged congressional Republicans to "do their job, stop threatening to shut down the government, and fulfill their basic responsibility to fund critical domestic and national security priorities, including my supplemental request. It’s time for them to act."

Current government funding levels are set to expire partially on January 19, with remaining agencies and offices funded through February 2.

Meanwhile, a growing faction of GOP hardliners is urging House Republican leaders to halt government funding progress altogether until Democrats make conservative policy concessions to address the border crisis.