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Category: Appropriations

Keep Calm with Appropriations and Carry On

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Despite having no budget resolution and discretionary spending levels, the House and Senate Appropriations committees have decided to move forward with crafting draft bills.

Lawmakers of both parties and in both chambers have predicted the need for another stopgap measure to extend current funding levels when FY 2018 begins on October 1, 2017.

Without any budget in place or the prospect of one coming soon, congressional leaders understand that they must have some sort of spending package ready to avoid a government shutdown. Additionally, writing detailed spending bills that fund lots of popular programs is easier than navigating the treacherous politics involved in constructing a bipartisan deal over spending limits.

That said, the House and Senate are taking different approaches to crafting their bills.

On Monday, the House Appropriations Committee has released its version of the FY2018 Military Construction – VA appropriations bill.  The first of the 12 annual spending bills Monday night — a popular measure funding the Department of Veterans Affairs and construction projects at military bases. The $88.8 billion measure is $6 billion over FY2017 levels, despite FY2018 sequester levels being less than FY2017 levels.  It is unclear where the $88.8 billion figure came from. The House Appropriations Committee is expected to vote on the measure as soon as Thursday and more bills are expected to be released soon.

 

Late Tuesday, Senate Majority Leader Mitch McConnell, (R-KY) said that spending bills in the Senate would be written using FY 2017 funding levels as a guidepost.

If no new budget deal is cut, the House and Senate are confined to the levels set by the 2011 deficit-cutting law, the Budget Control Act (BCA), which is also known as the Sequester. That law would require cutting about $5 billion from the agreement reached to set FY2017 levels.

Memorial Day Recess, Health Care & Tax Reform Slowly Move, Omnibus Already?

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The House and Senate are in recess to observe Memorial Day this week. Members returned to their home districts to work as efforts continue behind the scenes in DC on health care and tax reform.

Health care continues to be a big unknown in the Senate. According to the most recent impact analysis released by the Congressional Budget Office (CBO), the amendments to the AHCA do little to improve the bill. The AHCA would lead to 14 million people without insurance in 2018 and 23 million uninsured in 2025. The bill also hurts the Medicaid program, cutting $834 billion over 10 years.

The bill is now with the Senate where various Senate Republicans have indicated that any health care measure will undergo a dramatic overhaul in the coming weeks. Senate Republicans ca not ignore CBO completely — they have to pay attention to the cost estimates to make sure they comply with budget rules.

A specific timeline for the bill has not yet been set or made public. Currently, Senate staffers are drafting legislation intended to jump-start conversation when the Senate reconvenes next week.

House and Senate leaders and the White House going to try to put their heads together and cook up a single tax plan – instead of allowing each chamber to craft its own bills, like Republicans are doing now on health care and as happened with the 1986 tax revamp. However, the timeline to accomplish reform is slipping due to several factors (including the need to raise the debt ceiling much earlier than previously anticipated) and a failure to reach consensus about what provisions should actually change. All politicians hate the tax code, but there is not agreement on which provisions exactly what they hate. Voters gripe about complexity but are opposed to losing any breaks that benefit them.

Looming over tax reform is federal government’s need to raise the debt ceiling now, several months before Congress was prepared to act. At the beginning of 2017, Treasury estimated that the Department could use extraordinary measures until the Fall so that the federal government could continue to operate.

Now, senior White House officials are requesting Congress address and raise the debt ceiling prior to the August Recess. The request sets up a potentially monumental political fight. It is something that will not just be a fight between Republicans and Democrats but within each of the parties. The GOP is torn over whether to combine spending cuts with the debt ceiling lift, and Senate Democrats are already signaling they may push for their own concessions since their votes are going to be needed to avoid a devastating government default.

Rumor of the Week! House Appropriators are floating the idea of passing a 12- bill omnibus before the August Recess. Such a move would certainly accelerate the FY 2018 process, which is significantly behind this cycle due to the late completion of the FY 2017 appropriations in May. To complete such a package would put tremendous pressure on the House Appropriations committee to craft, mark up and combine all 12 bills (none of which are currently in public draft form) and would be a significant accomplishment if any of the bills were already available. FY 2018 begins October 1 and right now, lawmakers have just 12 legislative days planned when both chambers will be in session in September. Stay tuned!!

They’re Back (tho’ the Senate Never Left)

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DC typically has a strong law enforcement presence, and now, officers are everywhere on the Hill today because it’s National Police Week and the 36th Annual National Peace Officers’ Memorial Service is today on the West Front of the Capitol.

The Senate continues to consider nominations. Up first, Jeffrey Rosen is Trump’s pick to be Deputy Secretary of Transportation. He worked at the department as general counsel during the George W. Bush administration. He also did a stint at the Office of Management and Budget when Senator Rob Portman (R-OH) was OMB Director. If confirmed, Rosen would face the day-to-day responsibilities of running an agency with more than 50,000 employees and a budget this year of about $76 billion. Rosen would also be a key player in any infrastructure legislation to be considered by Congress later this year.

The House will spend most of the week concentrating on hearings. Most importantly, hearings regarding FY 2018. With just three-and-a half months left to complete work on FY 2018 appropriations (not counting the month-long August recess), appropriators still have not started drafting any of the 12 standing spending bills. That’s because there is still no budget blueprint or any agreement on overall spending limits. President Donald Trump’s full budget request for FY 2018 (that begins October 1) is due to be unveiled next week, on May 23. Keep in mind, Presidential budget plans are traditionally submitted in early February, but new Administration, including Obama’s, are often late in submitting their first budget. The current Administration has already submitted a skinny budget document. 

To give context, hearings normally held in February and March are just getting underway now — in mid-May. Much of that was due to Congress wrapping up the FY 2017 cycle at the beginning of May. However, may of the FY 2018 efforts are still stymied by the lack of a FY 2018 budget resolution that sets the discretionary spending caps (known as 302(b)s) that gives House and Senate Appropriators. Right now, the FY 2018 Budget is tied up in ACA repeal and the AHCA.

Other things to watch for this week…

A second federal appeals court will hear arguments Monday over whether the Trump Administration should be able to implement its revised travel ban, this time with an expected audience of millions watching via live video stream. A three-judge panel of the U.S. Court of Appeals for the 9th Circuit hears one hour of arguments on the case starting at 12:30 p.m. ET in a Seattle courtroom. Interested viewers can tune in via the court’s live stream or on C-SPAN’s website. Most major networks will also be televising the arguments.

Expect Congress to be incredibly upset about the malware, derived from the NSA leak earlier this year, that crippled the British National Health Service’s computer systems on Friday, among others. The impacts continue to be felt today in Asia, as workers were headed out or gone for the weekend when the UK was hit.  The Wall Street Journal has the fascinating story about how a 22-year-old U.K. researcher stumbled upon the virus’s “kill switch” through a $10.69 website.

FY2018 President’s Budget Proposal Expected Tues, 5/23

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The full President’s Budget Proposal for FY 2018 is expected to be released on Tuesday, May 23. Earlier this year, the Administration released the  America First “skinny” budget proposal as well as supplemental appropriations request for FY 2017.

Earlier this month, Congress passed the FY 2017 omnibus appropriations measure, which completed the FY 2017 appropriations cycle. The omnibus appropriations bill which provides fresh spending instructions for nearly every corner of the federal government. It formally appropriates more than $1 trillion in discretionary spending for FY 2017, in keeping with the spending limits agreed to last year. Additionally, appropriators absolutely rejected the Trump Administration’s supplemental FY 2017 request for $18 billion in cuts to domestic discretionary programs.

Office of Federal Relations will continue to monitor and report on developments on the budget front.

House Out, Senate Still Working

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The House is out for a pre-scheduled recess this week — and likely to do a victory lap about passing the AHCA last week — while the Senate continues to move through nominations, Russian investigations, and maybe health care reform.

Also last week, FY 2017 funding is finally secured, and Congress is beginning to take stock of how far behind schedule they are for FY 2018.  There are now only four-and-a-half months left before the new fiscal year begins on Oct. 1 – and that includes the month-long August recess. Typically, at this point in the Congressional calendar, at least one of the 12 standing appropriations bills has been marked up by committee and the House and Senate Appropriations Committees are well on their way to drafting the other standing bills.

However, there is no guidance for appropriators on the annual spending limits, which is something set up by the annual budget measurers, which has yet to be passed by the House and Senate. The House took a first step with the AHCA last week, but within hours of the passage of the House legislation, Republican Senators made clear they didn’t support the measure and would begin drafting their own version…and that might take a while…like August. 

President Donald Trump has yet to submit a full FY 2018 budget request, which is typically due in early February. While the President offered an outline of discretionary spending plans in March, his full budget is not likely to come before May 22, and even then, it is unclear how in depth the budget released might be.

Stay tuned.