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FY15 Appropriations Released

Last night, House and Senate Appropriators unveiled a $1.1 trillion spending package that is a combination of all but one of the Fiscal Year 2015 (FY15) appropriations bills rolled into an omnibus for the remainder for FY15, plus a continuing resolution (CR) funding the Department of Homeland Security through February 2015. The FY15 appropriations package, dubbed the “Cromnibus,” would provide new funding for all government agencies and programs, except the Department of Homeland Security, and is designed to gain bipartisan support and avert both a government shut down or another continuing resolution, as was seen in FY 2014. The current CR runs through tomorrow (December 11, 2014). 

The deal is a victory for appropriators, who have insisted that spending caps set under the 2013 budget agreement would allow them to move most of the annual measures for FY15. The Homeland Security stopgap portion is an effort by Republicans leaders to force a showdown with the White House on immigration in the new Congress, when Republicans will control both chambers of Congress.

The Cromnibus will move as HR 83, a previously considered piece of energy legislation. By using a previously considered bill, House and Senate leadership is trying to overcome Senate procedural hurdles so that measure could be cleared as early as Friday. Regardless, with the current stopgap funding expiring on tomorrow, the House will likely pass a two- or three-day CR to guarantee there is no shutdown before the Senate takes action and sends the “cromnibus” to the President.

For domestic agencies, flat funding is the norm, with some spending tradeoffs made to build political support. For example, the bill’s education programs are almost level funded at $70.5 billion, only $100 million less than last year. Democrats, however, will be pleased with level funding of $8.5 billion for Head Start and $22.5 billion for Pell grants, an amount that would raise the maximum grant award by $100 to $5,830.

Overall, Appropriators said the entire Labor-HHS-Education section of the spending bill would contain $156.8 billion in discretionary money, roughly the same level enacted last year. The title is always among the most contentious of the annual spending bills because of the wide reach of the programs under its jurisdiction and has become even more of a lightning rod since passage of the health care overhaul in 2010.

Additionally, the bill would provide $100 million, a $1.6 million increase, for the Office of Civil Rights, which is responsible for investigating Title IX complaints of inappropriate campus response to sexual violence. Moreover, the Student Aid Administration received a $230 million increase from last year to $1.4 billion with part of that funding going to increased enforcement and data collection under the Clery Act. The Committee commended the Education Department for its emphasis on campus sexual assault prevention.

The Defense Department, however, would see its base budget rise $3.3 billion over current funding to $490.2 billion, an amount still $500 million less than what was requested by the Pentagon.

Of note in the Cromnibus:

  • National Institutes of Health received $30.1 billion, which is $150 million more than FY14.
  • National Science Foundation received $7.34 billion, which is $172.3 million above the 2014 enacted level. NSF’s MREFC received $200.8 million.
  • The Department of Education was cut by $166 million overall. Pell grants, however, received a net increase for ED of $137 million increasing the maximum award to $5,830. Federal Work Study received an increase of $15 million. The Student Aid Administration received an increase of $230.924 million. Race to the Top was eliminated.
  • National Aeronautics and Space Administration (NASA) received $18.01 billion for which is $363.7 million more than the 2014 enacted level.
  • National Oceanic and Atmospheric Administration (NOAA) received $5.4 billion, which is $126.4 million more than the 2014 enacted level.  Big winners at NOAA were Weather, which received $90.8M, which is $9.6M above the FY14 enacted level. Climate accounts remained relatively level with previous funding. Sea Grant received level funding of $62 million. NOAA Cooperative Labs and Institutes received $60 million, which is level funding. The bill provides $60 for Climate Competitive Research, Sustained Observations and Regional Information, the same as the FY14; $38M for Regional Climate Data and Information; $8.5M for Integrated Ocean Acidification, which is $1.5M above the FY14 enacted level; $41.3 for Sustained ocean observations and monitoring, which is comparable to the FY14 enacted level
  • National Weather Service operations received $954.2 million for, which is $526,000 above the 2014 enacted level.
  • The US Geological Survey received $5 million in additional funding Early Earthquake Warning funding on the Pacific Coast.
  • The Department of Defense’s S&T programs generally enjoyed increases in funding (6.1: $2.279 billion (+$112 million over FY14); 6.2: $4.605 billion (-$38 million below FY14);  6.3: $5.530 billion ($155 million above FY14)

The House is expected to pass the measure on Thursday and send to the Senate. The Senate is expected to pass it Thursday or Friday. The President is expected to sign it into law Friday.

Federal Relations will continue to update information on the Cromnibus as it move through the Congress and becomes law.

House Considers Charitable Tax Extenders

Last week, the House voted to renew most extenders for one year — restoring them for the current 2014 tax year so that companies and individuals can make use of the breaks when filing their 2014 tax returns. The Senate expects to clear that measure in the coming days.

Today, the House considered HR 5806, the Support America’s Charitities Act, which would make permanent a number of popular charitable tax provisions related to food contributions, conservation property and contributions from certain retirement accounts to charitable entities..

The measure’s provisions were previously passed by the House as part of December’s one-year tax extender bill (HR5771) passed last week. This measure, however, makes these provisions permanent.

Of not for universities,  the legislation would make permanent the rule allowing certain tax-free distributions from individual retirement accounts (IRAs) for charitable purposes. Taxpayers must be at least 70-and-a-half years old and make distributions of $100,000 or less per year directly to a qualifying charitable organization.  According to the House Ways and Means Committee, in the first two years that the IRA provision was available, it led to more than $140 million in charitable donations, with the median gift just under $4,500. The Joint Committee on Tax has previously estimated that enacting this provision would reduce revenues, and thus increase federal budget deficits, by about $8.4 billion over 10 years.

The measure is noncontroversial and is expected to pass under suspension of the rules. It is unlikely the Senate will consider the bill. The Administration issued a Statement of Administrative Policy against the legislation, which included a veto threat.

House Narrowly Passes Immigration Response

In a fairly narrow and mostly party line vote, the House passed a measure disapproving of Obama’s immigration action yesterday. It likely stops there: Senate Majority Leader Harry Reid says the Senate won’t take it up. 

Congressman Ted Yoho (R-FL) has lead the effort in the House meant to channel conservative anger and stop the Administration’s recently announced Executive Order on immigration. 

On November 20th, President Obama announced the US would extend legal status to an estimated 4 million people who have lived in the United States for at least five years and are parents of U.S. citizens or of lawful permanent residents. The move is designed to end deportations that separate families that have been together in the United States. This action will reinforce a 2011 prosecutorial discretion order telling customs and Justice Department officials to focus deportations on immigrants who threaten public safety or national security. The Executive Order will not go into effect until next year.

Late Thursday, House lawmakers passed the bill, HR 5759, the Preventing Executive Overreach on Immigration Bill, sponsored by Rep. Yoho, which would prohibit the administration from exempting or deferring from removal certain categories of undocumented immigrants. It also would prohibit the executive branch from treating such undocumented immigrants as if they were lawfully present, had lawful immigration status or providing them authorization to work legally.

In a 219-197 vote, Seven Republicans voted against it, three Democrats voted for it, and three Republicans voted present.

The bill and the vote is largely symbolic since Senate Majority Leader Harry Reid has already announced that the Senate will not take up the measure.

Republican lawmakers are seeking other routes for nullifying the President’s executive order, including via a year-end fiscal year 2015 appropriations omnibus that would fully fund most of the government but provide only temporary spending for immigration-related activities as a way to revisit the immigration issue in the next Congress.

 

 

House to Pass Tax Extenders

The House is set to consider HR 5771, the Tax Increase Prevention Act today. The measure would retroactively extend more than 50 expired tax breaks for one year. It would renew the individual deduction for state and local sales taxes and the equalization of tax-free benefits for transit and parking, the business research and development tax credit, bonus depreciation and other expensing rules along with the work opportunity tax credit.

Most of the renewed tax extenders, notably the R&D and tuition tax credits, expired at the end of calendar year 2013.  In total, Joint Committee on Taxation (JCT) estimates that the tax extenders would reduce revenue by $41.6 billion over 10 years.

These provisions expired on December 31, 2013, but will receive a one year extension. Originally, Senate Democratic leaders began negotiations with House Republicans on a potential deal on extenders that would renew most for two years and make a number of provisions permanent — at an overall cost of more than $400 billion over 10 years. The White House, however, last week announced that the President would veto such a deal because, while it made certain business tax breaks permanent, it would not permanently extend tax provisions for the working poor such as the expanded earned income tax credit and child tax credit. These provisions were last extended in January 2013 in the American Taxpayer Relief Act, which was the measure to avert the fiscal cliff.

Tax reform is expected to be a central focus for the next Congress. In coming Chairman of the tax-writing Ways and Means Committee, Rep. Paul Ryan (R-WI) has announced his intention to examine and reform the nation’s tax structure.

Update:  The measure passed by a vote of 378-46.

NDAA Sent to Senate

The House passed HR 3979 the FY15 National Defense Authorization Act (NDAA) by a vote of 300-119. The Senate is expected to take up and pass the measure next week.

The measure, which must be passed annually, authorizes all Pentagon and defense-related programs for the fiscal year. In FY15, the measure authorizes $577.1 billion for the Pentagon and defense-related programs for FY 2015, of which $63.7 billion is war-related funding — including $5.1 billion requested by the president to counter the Islamic State in Iraq and Syria. Defense spending continues to account for well over 50% of overall federal discretionary spending.

The bill extends the administration’s authority to train and equip Syrian rebels fighting both ISIS and the Assad regime and authorizes funding to help train the Iraqi Army in its fight against ISIS. It includes new provisions to combat sexual assault in the military, continues restrictions on the transfer of Guantánamo Bay detainees and allows the Pentagon to slightly reduce servicemembers’ housing allowances and impose a small copay for prescription drugs. It also includes a major package of non-defense-related land management provisions, including an appropriation for the PILT program and provisions creating new National Park units.

Additionally, the legislation includes strong language on increasing military cyber security.  These efforts come in the wake of two years of leaks from Defense Department insiders and cyberattacks on both the department and its contractors, including Manning and Snowden.

The measure would require the Defense Department to report back to Congress by March 2015 on its efforts to build both interim and long-term capabilities to continuously evaluate the security status of employees with access to classified information. Another provision in the bill is directly linked to a report the Senate Armed Services Committee released in September detailing what congressional leaders called a disturbing lack of communication on cyberattacks between agencies.

Additionally, the bill would add cybersecurity to the department’s list of major force programs. The department groups certain activities into those groups for budgeting and mission planning — the current list includes programs such as special operations, mobility forces and guard and reserve forces. Breaking cybersecurity out into its own major force would serve a symbolic move to show that the issue has been elevated to a high priority for the department.