Federal Relations

January 28, 2019

Three Week Deal…Some Ancillary Fixes

As part of the three week deal signed into law on Saturday, the measure (H.J.Res. 28) would reopen the nine Cabinet departments and several independent agencies closed during the shutdown through February 15. Beyond funding these agencies, there were other significant items included in this agreement.

Back Pay

Federal employees will receive back pay as part of the agreement. Most employees should be expect to receive their two missed paychecks by the end of the week. Government contractors may or may not receive missed pay depending on the nature of their contract. States or grantees that helped fill the gap during the shutdown can expect to be reimbursed.

Conference Committee

As part of the agreement, the House and Senate will convene a conference committee to work out a deal on FY 2019 Homeland Security spending, including the fate of the Administration’s demand for $5.7 billion for border wall construction, which is spending Congressional Democrats have long opposed.

Pay-Go

Under the Pay-As-You-Go Act of 2010 (PL 111-139), the White House Office of Management and Budget (OMB)  is supposed to issue a report within 14 days after the end of a Congressional session outlining whether enacted laws added to the deficit over five or 10 years. If so, then the OMB has to implement across-the-board cuts to any programs not exempt from the statute, to eliminate the excess.

Routinely, since the 2010 law was enacted, Congress has simply decreed that certain pricey provisions will not be added. For example, Congress removed the impact of the $1.5 trillion, 10-year tax cuts from the OMB’s calculations as part the 2017 stopgap appropriations bill both were signed into law the same day.

The stopgap spending bill includes provisions delaying roughly $800 million in spending cuts, mainly (about 90 percent) impacting Medicare. Because Congress did not act in time, the OMB should have had to implement the cuts, but the shutdown delayed implementation.

That Pay-Go “debit” will pop up again next year unless Congress eliminates it once again on any FY 2019 final package. A House-passed, $271.8 billion package (HR 648) of six appropriations measures would have wipe out the scorecard’s existing debit, so only future legislation increasing deficits would count for the OMB’s calculations.