WASHINGTON — After Congress returns from its Thanksgiving recess, budget forecasters are hoping for a year-end spending deal, a pre-Christmas miracle to avert a government shutdown.

But by no means is a deal in hand.

Multiple reports suggest that as 2017 winds down, a showdown is heating up over whether any spending deal will include a remedy for undocumented immigrants who came to the U.S. as minors. House Speaker Paul Ryan, R-Wis., has said no, but a bloc of House Democrats have demanded it for their votes on any year-end funding bill.

Though federal spending runs out Dec. 8, Ryan has hinted there will be another stopgap continuing resolution, or CR, to keep the government open while lawmakers wrangle. He has said he expects a spending deal to be final by year’s end.

Roman Schweizer, an analyst and managing director at the Cowen Washington Research Group, said in a note to investors he expects a deal before the new year — as opposed to a long-term CR — and potentially a two-year deal.

“A two-year deal makes a lot of sense” because Congress has amended budget caps two years at a time before, because it would avoid having to make another deal in an election year and because “a hold-your-nose catchall bill” with enough vote-getting provisions will win passage, said Schweitzer.

Lawmakers are reportedly considering a GOP proposal of a two-year budget deal that would raise 2011 Budget Control Act caps for defense by $54 billion and nondefense funds by $37 billion in both fiscal 2018 and 2019.

Congressional defense hawks have howled over that possibility, that budget caps would be set at $603 billion for defense. The 2018 National Defense Authorization Act that passed the House and Senate earlier this month authorized much more: $626.4 billion in base defense spending and $8 billion in defense funds authorized in other committees.

The defense industry applauded passage of the NDAA earlier this month, but not reports of the potentially lower top-line for the Pentagon. The National Defense Industrial Association expressed its own concerns in a Nov. 20 statement.

“NDIA urges swift action to reach a budget agreement that provides sufficient defense funds for the remainder of FY 2018,” the statement reads. “It must also meet the needs indicated in the soon-to-be-released National Defense Strategy and Nuclear Posture Review that will drive the FY 2019 budget request and Future Years Defense Program.”

Some arguments are emerging for Democrats to push back both against the higher top-line and — linked to defense — tax reform.

In a Center for a New American Security podcast posted Nov. 20, former U.S. Army Secretary Eric Fanning, due to become the chief of the Aerospace Industries Association in 2018, expressed skepticism about the force structure growth mandated by the NDAA.

Fanning flipped on its head a hawkish argument for the NDAA: that it provides troops with needed readiness funding. He argued that what it provides for training and modernization was not enough for the force-structure boost.

“I think we hadn’t properly resourced the force that we had, and if there’s going to be an emphasis on growing the number of Marines, ships and fighter squadrons, I’m concerned that we won’t get enough money for that,” Fanning said.

Fears have surfaced that the GOP tax plan, unless it is revenue-neutral, will add downward pressure on future defense budgets.

In a Nov. 15 letter to senior congressional leaders, three former defense secretaries who served under President Barack Obama — Leon Panetta, Chuck Hagel and Ash Carter — warned that because the tax plan is expected to increase the debt, passing it will probably mean future cuts to Pentagon budgets “for training, maintenance, force structure, flight missions, procurement and other key programs.”

“The result is the growing danger of a ‘hollowed out’ military force that lacks the ability to sustain the intensive deployment requirements of our global defense mission,” the letter reads. “The Navy’s recent report on the causes of the two destroyer collisions with civilian cargo ships that took the lives of 17 seamen confirms the lack of adequate training.”

House Armed Services Committee ranking member Rep. Adam Smith, D-Wash., made a similar argument in a floor speech a day earlier, that GOP tax reform plans would “undermine the ability to fund” the NDAA’s spending plans.

“We are having this debate now and talking about how underfunded the military is and how badly we need to shore up our readiness,” Smith said. “The rest of the week, we will make sure how our government takes in trillions of dollars less money. That is wildly inconsistent. If we believe we have these needs, we ought to be able to pay for them.”

Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.

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