A bipartisan group of negotiators worked through the weekend in hopes of striking a year-end spending deal by Monday so Congress has enough time to pass the legislation before Dec. 11 and avert a government shutdown.
The weekend sessions came after Democrats rejected an initial proposal from Republicans last week that included dozens of policy riders that GOP lawmakers wanted to attach to the must-pass legislation. Leadership aides are now trying to settle disagreements over the riders and strike a deal on a separate package of tax break extensions that could be added to the omnibus appropriations bill.
Aides said the talks over the spending and tax packages had become increasingly intertwined as House and Senate leaders work to craft a broad deal that would allow both parties to claim some policy victories but a broader deal could prove difficult.
House Appropriations Committee Chairman Hal Rogers, R-Ky., told reporters on Thursday that his goal is to have a deal completed by Monday so that the legislation could pass by the Friday deadline. If a deal is not completed by early Monday, leaders will have to begin seriously weighing a short-term continuing resolution to avert a shutdown while negotiations continue.
Members of the Senate Finance and House Ways and Means committees have also been working in recent weeks to reach a deal on tax breaks for businesses and individuals. A list of nearly 50 tax breaks expired at the end of last year and lawmakers have promised to act before the end of the month to renew the breaks retroactively.
Republicans have been pushing to make permanent several business breaks, including the credit for research and development and small business expensing, and in exchange were offering to permanently extend the Child Tax Credit and expand the Earned Income tax credit, both priorities for Democrats. Under that plan the remaining breaks would be extended for a short-period of time.
Aides familiar with the talks said there remains some hope a deal on tax relief can be struck and used to sweeten a spending deal by allowing Republicans to take credit for a huge tax break for millions of individuals and businesses. But those negotiations hit a snag late last week and plans for permanent extensions could be scaled back in favor of a simple short-term extension of the full list of breaks.
The biggest issue facing negotiations on the omnibus spending bill is the policy riders being pushed by Republicans.
Democratic votes will likely be needed to pass the bill in the House because a group of conservatives is likely to oppose the legislation over spending levels and because it will provide money for some programs they oppose.
Democrats are using this leverage to push Republicans to get rid of some of the riders that were included in the initial offer.
“We all know that we have to compromise, Republicans have a majority, the president has the signature and we can sustain a veto so let’s talk,” House Minority Leader Nancy Pelosi, D-Calif., told reporters on Thursday
House Republicans met Thursday to figure out which policy provisions they could force Democrats to accept without risking a deal. Many members left a weekly Thursday morning House GOP policy meeting stressing that they want to get an agreement, including some members of the hard-line Freedom Caucus.
The list of demands from conservatives includes increasing screening for refugees from Syria and Iraq, scaling back environmental and banking regulations, and giving health care providers the right to object to providing certain services that go against their religious beliefs. Many also dislike a campaign finance provision backed by McConnell that would increase strict limits on how much national party committees can spend to coordinate with individual candidates.
Republicans have floated the possibility of increasing the threshold at which banks face increased scrutiny from the Federal Reserve. That may be appealing to some moderate Democrats but would almost certainly draw the ire of liberals like Sen. Elizabeth Warren, D-Mass., who was enraged when leaders eased financial regulations in a similar spending bill last year.
Campaign finance could be another area of compromise. Conservatives worry that the proposed changes would give greater electoral control to mainstream party leaders. Aides said the campaign finance rule could possibly be adapted to ease those concerns by including language that would allow the rule to apply to potential third party committees that might be created in the future.
The fate of environmental regulations remains dicey. McConnell has said for months that he plans to use the appropriations process to hammer away at Obama’s recent executive actions aimed at air and water pollution. Republicans have insisted that funding for those regulations be rolled back in the upcoming spending bill, according to aides and lobbyists.
The discussion comes at an awkward time for Obama who just returned from a global climate summit in Paris. The ongoing talks are aimed at working out a long-term international agreement to curb climate change. Scaling back regulations now could weaken U.S. negotiators by proving that Congress can move to undo any promises made by the White House.