At some point later I will do a newsletter solely focused on the budget, appropriations bills and why things work the way they do. It’s too much to include here, but here are number of facts worthy of your understanding:
1). Continuing Resolutions (CRs) are temporary. In this case, the bill that passed the House and Senate last week extends Fiscal Year 2024 funding levels until mid-March. (Yes, we will have another big spending battle then, so get ready!)
2) The Debt Limit Cap is set to kick in sometime during the summer. As you may recall, the current Debt Limit was extended to a date certain, January 2, as a result of the negotiations from a year ago. President Trump wanted an extension of the Debt Limit until 2027. This is the primary reason why he and Elon Musk came out so hard against the original spending package.
3) Appropriations bills are approximately 24% of the total Federal Budget (about $1.8 trillion), and more than half of Discretionary spending is Defense Spending. Eliminate all of Discretionary Spending and you still don’t make a dent in the debt. Why? Because Entitlement Spending and the debt service payments drive the debt, accounting for the remaining 76%. And entitlement Spending is largely driven by an aging population and health care costs.
4) The final product after the uproar costs roughly the same, but didn’t include the many authorization bills, which is why the bill is so much thinner. The Education and Workforce legislation included in the original bill was more than 500 pages, for example. The health care extenders package in the original bill that included the much-needed “Doc Fix" was in the hundreds of pages. The Pharmacy Benefit Manager (PBM) reform package that our small and independent pharmacies have been pleading with Congress to pass for years was more than 100 pages. Because of the uproar, this was all striped.
5) Major reforms take ten, twenty and sometimes thirty or more years to find the right political climate in order to pass. (For example, the 2017 tax package was the first reforms in 31 years.) That is why the annual appropriations bills end up being vehicles for authorizing legislation. Appropriations are must-pass bills because without them the government shuts down.
6) Everyone complains that special interests have too much power. Ironically, the only way to beat them is to find a must-pass bill to include your provision. For example, PBM reform is so important to locally owned small pharmacies, but it probably never happens unless it is attached to a must-pass spending bill. Why? Because the big PBMs are staunchly opposed to any reform, have deeper pockets, and have the stronger lobbying effort. That is just one of a million other examples.
7) Treat what the media, members of Congress and other politicos tell you as a data point — not the absolute truth or verdict. Just because you hear it on your favorite media outlet doesn’t mean it is 100% true. Issues are almost always more complicated than they first appear. Furthermore, most (not all!) on TV have no idea what they are talking about, but they sound good. And if it’s a cable news show, just remember it is all about ratings. What drives ratings? Pitting one against another. It makes governing exceptionally difficult with a very narrow majority.
