The Insider

OMB working new FY-19 toplines after Congress passes spending deal

By Tony Bertuca  
February 9, 2018 at 11:09 AM

The White House Office of Management and Budget will submit the fiscal year 2019 budget request Monday and is updating it to reflect the two-year, $300 billion spending agreement Congress reached early this morning, according to a senior OMB official.

"After we finalized the budget, Congress reached agreement to significantly raise the spending caps in FY-18 and FY-19 in the Bipartisan Budget Act, and the President has signed the new caps into law," the official said. "In light of this agreement, we are modifying our FY-19 budget request to account for these new cap levels."

The official also said OMB will release an "addendum" with the administration's "roadmap for how to account for the increased spending caps in a responsible manner."

The roadmap will include additional FY-19 funding for a "limited set of administration priorities as well as proposals to fix certain budget gimmicks used to circumvent the spending caps," the official said.

OMB did not immediately respond to questions about whether it would alter its guidance for the Pentagon's Overseas Contingency Operations account. OMB Director Mick Mulvaney has long deried the OCO account as a "gimmick" and a "slush fund" because it is not subject to the spending caps.

The congressional deal, meanwhile, provides $700 billion in total defense spending for FY-18 and $719 billion for FY-19, a $165 billion increase above the caps set by the 2011 Budget Control Act.

The Defense Department's base budget will be $600 billion for FY-18 and $617 billion for FY-19, breaking the respective caps of $549 billion and $562 billion for those years. A congressional staffer said the OCO request for FY-19 would $69 billion.

The new agreement also adds $63 billion more than the BCA cap to non-defense spending in FY-18 and $68 billion in FY-19.

Defense Secretary Jim Mattis, citing an ongoing Pentagon audit, pledged Thursday to "wisely" spend the $165 billion in additional defense funding.

"We have never had a full audit," he told reporters at the Pentagon. "I'm very comfortable that we are going to find problems in how we are spending money and we'll correct on every one of those. We are going to find every problem and we're going to keep finding them and we're going to spend the money wisely."