Bipartisan Budget Agreement

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For an analysis of the previous budget agreement and its impact on defence spending, see “Making Sense of the Bipartisan Budget Act of 2018 and What It Means for Defense.” On August 2, President Trump H.R. 3877, the Bipartisan Budget Act of 2019 (BBA 2019), signed into law. The bill raises the budget caps of the 2011 Budget Control Act (BCA) for both defence and non-defence, for GJ 2020 and GJ 2021, the last two years of discretionary caps. The bill also suspends the debt ceiling until July 31, 2021 and extends reductions in some mandatory programs from GJ 2027 to GJ 2029. Here are four critical questions about the budget agreement and its impact on national defence. A1: BBA 2019 is a two-year contract that increases budget limits for both defence and non-defence in GJ 2020 and 2021. As shown in Table 1, the agreement increases the defence ceiling for GJ 2020 by about $90 billion above the previous ceiling of $576 billion and increases the $590 billion ceiling for fiscal 2021 by approximately $81 billion. The date of the BBA 2019 agreement also means that Congress can theoretically adopt defenses before the start of the fiscal year on October 1. This would be the first time since the 2004-2005 GJ that the defence would benefit from two consecutive years of appropriations stopped prior to the start of the fiscal year. And because it`s a two-year budget deal, it means that Congress may also be able to deliver the funds in time for GJ 2021, which would be the first time in at least 50 years that defence has had one-off resources for three consecutive years. However, simply reaching a budget agreement does not guarantee that the budgetary procedure will proceed smoothly. For example, while a budget agreement was already in effect months in advance for GJ 2019, some parts of the federal government did not have timely resources and experienced a prolonged loss (i.e. a partial government shutdown) for part of the year.

As shown in Figure 1 below, the BBA 2019 is the closest to BBA 2018 in terms of the size of the agreement. BbA 2019 increased defence budget caps for the GJ 2020-2021 period by about $172 billion, while the BBA increased defence caps in 2018 and fiscal year 2018-2019 by $165 billion. By comparison, BBA 2013 and BBA 2015 increased defence caps by $32 billion and $40 billion for their respective two-year periods. Table 1. Defence funding levels under the Bipartisan Budget Act 2018 (current dollar discretionary budget authority) A3: Total national defence funding of $738 billion for fiscal year 2020 under BBA 2019 corresponds to real growth 1% above the level forecast for the 2019 GJ. That`s 1.6 percent less than the $750 billion the Trump administration is asking for the GJ 2020. However, the requested amount of $7.2 billion was considered emergency assistance for the construction of border walls.

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