More Disaster Relief; Tax Reform Slowly, Slowly

Posted on October 10, 2017

It’s getting expensive to deal with disaster relief.

Going first, the House is scheduled to vote this week on the second installment of hurricane relief aid. While the Trump administration requested $29.3 billion, lawmakers have been busy trying to add to the total.

Texas lawmakers want an extra $18.7 billion for victims of Hurricane Harvey, which devastated coastal Houston. The Governor of Puerto Rico asked for another $4.6 billion to help the territory deal with the aftermath of Hurricane Maria. Florida lawmakers have asked for an additional $26.9 billion for victims of Hurricane Irma.

If all those requests were honored, the total aid package would balloon to $79.5 billion. Also, House Armed Services Chairman Mac Thornberry (R-TX) has lobbied the White House for extra money for missile defense to combat the threats from North Korea.

Disaster aid is considered emergency funding that is exempt from discretionary spending limits imposed by the Sequester. However, with the ultimate damage assessment from three recent hurricanes projected to reach a few hundred billion dollars, some conservatives are beginning push to pay for long-term rebuilding costs by cutting other programs, which is a nonstarter with Democrats.

This second installment does not even consider how the US is approaching federal disaster preparedness and recover. For example, the Administration’s request includes $16 billion to cancel debt owed by the National Flood Insurance Program, which has faced mountains of red ink since Hurricane Katrina in 2005. The FEMA-run program literally can not pay claims.

…and Congress and the Administration haven’t started talking about wildfires yet…

Meanwhile, House and Senate leadership are slowly trying to fill in the Administration’s framework for tax overhaul. Generally, lawmakers have said the cost of tax rate cuts would be offset by eliminating most of deductions and credits in the tax code. However, the few ideas floated publicly have run into stiff resistance.

The idea to include a border-adjustment tax, that would have raised $1.2 trillion over 10 years, has been dropped after business lobbies complained that it would raise prices for consumers. Also, the idea to eliminate the state and local tax deduction has unleashed a huge volume of complaints to tax writers. Plans to completely eliminate the “death tax” have also been sidelined as it becomes more clear that reducing of changing existing taxes will be more politically manageable than outright repealing them.

One Federal Fiscal Year Ends, Another One Begins

Posted on September 29, 2017

Federal FY2017 comes to a close Saturday night, September 30. To prevent the government from shutting down Sunday morning at the start of FY2018, Congress passed and the President signed into law earlier this month a short-term funding measure that would keep the federal government funded through the first week of December essentially at FY2017 levels.

Whether and if any of the 12 individual spending bills for FY2018 are dealt with before the short-term funding package expires on December 9 remains to be seen.

Hurricane-Debt Ceiling-Short-Term Spending Package Expected to be Cleared

Posted on September 8, 2017

In a surprising development earlier this week, President Trump struck a deal with the Democratic leadership in Congress to link measures that would increase the debt ceiling and keep the government funded on a temporary basis to a hurricane-relief bill. The move caught Congressional Republicans off guard, who had earlier expressed opposition to tying the debt ceiling and government-funding efforts to a bill to fund the rebuilding efforts after Hurricane Harvey.

After the House cleared a stand-along hurricane bill totaling approximately $8 billion earlier this week, the Senate followed up by nearly doubling the size of the package as well as increasing the debt limit and funding the government through December 8. The House is expected to take up the Senate-passed package later today.

Deal Reached on Short-Term Debt, Spending, and Hurricane Package?

Posted on September 6, 2017

It appears that President Trump has sided with the Democrats on a legislative package that would deal with the quickly approaching deadlines to pass annual spending bills and increase the debt ceiling. The Democratic leadership in Congress had proposed to the White House a short-term spending bill and a short-term debt limit increase, both until December 15, which would be packaged together with an initial relief bill to address the aftermath of Hurricane Harvey. President Trump has agreed to the proposal.

House Passes “Minibus” Package

Posted on July 28, 2017

While the Senate was busy with healthcare yesterday, on the other side of the Capitol, the House took up a “minibus” spending package for FY2018, consisting of four bills: Defense, Energy and Water, Legislative Branch, and Military Construction. The House Republicans combined these four bills as a defense-oriented package, after an initial conversation to pull together all 12 spending measures were unfruitful.

The bill passed by a vote of 235 to 192.

Even though the package has been adopted by the House, its biggest portion, the Defense bill, contains funding recommendations that cannot be implemented without change in law. The allocation for defense programs in the bill exceed the current allowable limit by more than $70 billion, meaning that either the law will need to be changed or the funding levels in the bill will need to be altered.