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Category: 2014 UW Federal Agenda

Appropriations, Sequestration, and Immigration

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The Senate is in session today at 2:00pm but there will be no votes today. The House will be back in session at noon Tuesday.

Appropriations: The House GOP plans to begin drafting their FY2014 spending bills to adhere to the roughly $967 billion spending cap set by recent budget law, which also reflects the sequester. The Senate Democrats, on the other hand, appear ready to ignore the sequester and instead mark up their FY2014 bills under a $1.058 trillion cap.

The House Appropriations Committee is expected to start the FY2014 process with two relatively non-controversial bills: Military Construction & Veterans Affairs and Defense. The Senate Appropriations Committee has not yet scheduled any FY2014 markups, but has a full slate of budget hearings planned with administration officials this week.

Sequestration:  The sequester was designed to be so bad that lawmakers would never allow it to happen. But it did happen and now many members of Congress are looking to protect their favorite federal programs from some or all of the effects of sequestration. After easing some pain for the FAA a couple of weeks ago, the shortlist for the next round of possible sequester saves includes cancer patients, medical researchers, hungry seniors, poor people, and pre-schoolers.

There are already more than a dozen pieces of stand-alone legislation introduced to address agencies, programs and accounts hit by sequestration. Whether any one proposal has a shot at becoming law requires a confluence of events. It needs bipartisan support and at least some semblance of a spending offset to cover the costs. And public outcry from the Americans across the country helps as well.

Here’s a small sample of other sequester fixes also waiting in the wings: Rep. Jim McDermott (D-WA) would exempt the NIH; Rep. Derek Kilmer (D-WA) would ensure that civilian Pentagon employees who get furloughed don’t lose access to classified information; the New York delegation is trying to protect September 11th health and compensation programs; Rep. Steven Palazzo (R-MS) wants to prevent furloughs for members of the National Guard who work full time as uniformed civilians maintaining equipment; Rep. Maxine Waters (D-CA) hopes to save the TIGER transportation grant program; Reps. Betty McCollum (D-MN) and Tom Cole (R-OK) have a bill to exempt the Indian Health Service fund; Sens. Susan Collins (R-ME) and Mark Udall (D-CO) are releasing a new version of legislation this week that would give agency heads more flexibility in how they implement the budget cuts.

We expect this sort of legislation to consume much of the public debate in Congress throughout the summer and fall.

Immigration: The Senate Judiciary Committee will resume their work on a comprehensive overhaul of immigration laws (S 744) Tuesday and Thursday with members of the chamber’s so-called gang of eight focused on which of hundreds of amendments filed could be potential deal-breakers. The committee chairman has said he hopes to finish the markup before Congress breaks for Memorial Day recess in two weeks.

Progress on Student Loan Interest Rate Bill

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Although both chambers are in recess today, there’s plenty of behind-the-scenes legislating and negotiating. House lawmakers plan to release a draft 2013 farm bill that’s expected to produce $38 billion in savings over a decade. Across the Capitol, Senate Democrats are looking for ways to advance President Obama’s nominee to head the Environmental Protection Agency – Gina McCarthy – who is having a tough time getting Republican support. The Administration also is engaged in talks with Republicans to head off a scheduled student loan interest rate hike. And there are efforts afoot to revise a Senate Internet tax bill in the House in an effort to gain support from conservative lawmakers.

A deal aimed at preventing federal student loan interest rates from doubling on July 1 appears possible after both sides made concessions on Thursday. A House Republican bill (HR 1911), that could be marked up next week, would treat the subsidized and unsubsidized portions of the Stafford federal student loan the same, pegging their interest rates to the 10-year Treasury rate plus 2 .5 percent. The legislation would also shift loans for graduate students to the 10-year Treasury rate plus 4.5 percent. Those interest rates would be capped at 8.5 percent and 10.5 percent, respectively. According to the Congressional Budget Office, the bill would save the federal government $990 million over five years and $3.7 billion over 10 years.

This measure largely mirrors a proposal included in President Obama’s FY2014 budget to shift the current fixed interest rate to a market-based variable rate.  The House is poised to move the measure through that chamber by Memorial Day, plus or minus a week.

New Manufacturing Innovation Institutes Funding Announced

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As part of President Obama’s manufacturing agenda “National Network for Manufacturing Innovation (NNMI),” the Administration today announced that it is launching competitions to create three new manufacturing innovation institutes with a Federal commitment of $200 million across five Federal agencies—Defense, Energy, Commerce, NASA, and the National Science Foundation. The Department of Defense will lead two of the new Institutes, focused on “Digital Manufacturing and Design Innovation” and “Lightweight and Modern Metals Manufacturing,” and the Department of Energy will be leading one new institute on “Next Generation Power Electronics Manufacturing.”

All three institutes will be selected through an open, competitive process, led by the Departments of Energy and Defense, with review from a multi-agency team of technical experts. Winning teams will be selected and announced later this year.

Senate Begins Mark Up of Immigration Bill

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The Senate Judiciary Committee is beginning to mark up the immigration bill today in the opening act of what will likely be a long, contentious fight over amendments. The “Border Security, Economic Opportunity, and Immigration Modernization Act” (S 744) is the immigration reform proposal developed by the so-called “gang of eight.”

Among other things, the bill would expand the annual cap of H-1B visas to 110,000 from the existing cap of 65,000, raise the number of visas for foreign graduates with advanced degrees from U.S. universities that are exempt from the annual cap, and create a 13-year path to citizenship for nearly 11 million immigrants. No undocumented worker, however, would be eligible for citizenship until the border is considered secure.

The Office of Federal Relations has been actively engaged with Congressional members on issues related to visas and pathways to citizenship for our students (Dreamers).

Watch the Senate Committee mark up live.

Congress to Focus on Budget Issues

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After a weeklong break, both the House and Senate are back in session this week. They have a three-week work period before the next break at Memorial Day. During this time, the House is expected to make some progress on their FY14 spending bills.

Appropriations

Even though there has been no final resolution over the budget for FY14, House appropriators are set to begin writing their FY14 spending bills this month with the plan of having a few of those bills on the floor by June. In the next week, House Appropriations Chairman Harold Rogers (R-Ky) is expected to propose how to divide up $967 billion in discretionary funding for the 12 annual bills, known as the 302(b) allocations. Once the allocations are approved, House appropriators will begin moving their bills through subcommittees and then the full panel.

The Senate appropriations process is typically later than the House process, and will be further complicated this year as Democrats have sought to set the cap for FY14 discretionary spending at a higher level, $1.058 trillion. The difference – $91 billion – is already reflected in the budget resolutions adopted by each chamber and has thus far kept them from reaching a final budget accord for FY14.

Among the first FY14 bills expected to reach the House floor is the Defense measure, which accounts for roughly half of regular discretionary spending. Another likely candidate for early House floor action is the nonpartisan Military Construction-Veterans Affairs spending measure. The Labor-HHS-Education spending bill is usually the last bill written as it has some of the most controversial programs that tend to divide Democrats and Republicans.

Sequestration

After providing more flexibility from sequestration for the FAA last month, Congress will likely grapple with how to give other agencies similar flexibility – especially if there is another public outcry like there was for FAA (ie: long lines at TSA check points in the nation’s airports). The White House and Democrats appear to be sticking with a strategy of seeking a full repeal of the sequester, despite pressure from Republicans, federal agencies, and other interests to back the kind of special law that eased the impact of spending cuts on air traffic controllers. Many members of Congress and the White House continue to talk about a “budget deal” that will address the impacts of sequestration and possibly close tax loopholes for the wealthy. It is unclear how such a deal would come together at this point as Republicans have been adamant about not raising any additional taxes.

Debt Limit

Many had hoped to use the next debt ceiling debate as a way to force a broad budget deal, but those hopes are fading the default deadline has been moved back and lawmakers appear less worried about the consequences. The urgency to address the debt is diminishing with the annual deficit falling from $1.3 trillion two years ago to a projected $845 billion this year. And the Treasury may not exhaust the extraordinary measures it can use to avoid default until November – rather than this summer.  So pushing back the deadline also pushes off any need to compromise in the near term, one reason the House and Senate appear set to move forward with very different levels for FY14 discretionary spending. If a big deal is even remotely possible, it is likely to come with an overhaul of the tax code tied to modest cuts in entitlement spending and a debt ceiling increase.