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Category: Appropriations

Shut Down Show Down?

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Congress is back this week after a two week Passover/Easter Recess, and the first order of business is reaching some agreement to keep the government open beyond 12:01 am Saturday morning. Tensions over funding have risen during the recess as the Administration has begun a hard push for more defense money and a significant amount ($1.4 billion) to begin work on a wall along the Mexican border. Initially, OMB Director Mulvaney had insinuated that the lack of funding for the Administrations priorities (in both the FY2017 supplemental request and the FY2018 skinny budget) would result in a veto. In recent days, however, Administration officials generally have stopped short of insinuating the President would veto any FY2017 measure not including these funds.

Democrats in the House and Senate have been very vocal that including any funding for a border wall is a nonstarter. Mulvaney has suggested that a path forward with Democrats would be including funding for insurance subsidies under Obamacare that are used to reduce the cost of co-payments and deductibles, which is something the Trump Administration has vowed to cut.

Realistically, Republican leadership in the House and Senate know that no continuing resolution (CR) or omnibus for FY2017 can pass either body without some Democratic support. Bottom line: Democratic cooperation is needed in the Senate for any spending deal to pass because 60 votes are required to advance legislation and Republicans control only 52 seats.

As negotiations continue to drag on, the more likely a short term is likely to move, simply to give Congress more time to negotiate a broader package or figure out a resolution for FY2017.

Additionally, House Republicans are working with the White House to try to revive a replacement plan for Obamacare as negotiations continue on a compromise that might win a majority vote. However, Members return to Capitol Hill this week with no sign of an imminent deal that would overcome objections from both moderate and conservative camps,

What’s driving this push? The Trump Administration’s first 100 days in office winds up on Saturday. Traditionally, the first 100 days of a new administration is the most active and influential (CNN has a good overview). While the Trump Administration has not been as successful legislatively as it would have liked, there have been successes in rolling back Obama Administration regulations and confirming a Supreme Court nominee. That said, Trump Administration officials would like a big win prior to Saturday and pushing some version of Obamacare repeal and a FY2017 are the two options being pushed right now.

Meanwhile, the debt ceiling is likely to make a summer appearance. Technically, the federal government exceeded its spending authority on March 15th. The Treasury has been using so-called extraordinary measures to extend the government’s borrowing capacity for several more months. That capacity should last until “sometime this fall” before Congress would need to raise the debt limit again, according to an estimate from the Congressional Budget Office. Treasury Secretary Steve Mnuchin has privately accelerated the timeframe for Congress to address the issue and raise the debt ceiling to some time this summer. This move would coincide with tax reform provisions (or perhaps still Obamacare repeal) that Congress would consider.

Stay tuned.

 

OMB Director Mulvaney Pushing for Sanctuary City Language in FY2017

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OMB Director Mick Mulvaney is pushing House lawmakers to include language in the FY2017 omnibus appropriations bill to restrict federal funding grants for cities that do not enforce federal immigration policies. The goal is to bring the House Freedom Caucus on board with a government funding bill.

Such a provision, known as a rider, would put the already delicate negotiations under further strain, as Congressional Republicans already struggle to deal with the Administration’s supplemental request to begin building a border wall. A rider prohibiting federal funds from going to sanctuary cities would guarantee zero Democratic support.  

Despite recent changes to the Senate rules regarding confirming Supreme Court Justices, the Senate will need 60 votes to move forward with any appropriations bill and Senate Republicans are only 52 votes. 

When Congress returns on April 25th from its two-week recess for Passover and Easter, it will have 4 legislative days to pass some vehicle (an omnibus or another CR) for FY2017 funding or risk a shutdown.

Stay tuned.

Two Weeks of Recess

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As Congress begins a two-week recess for Easter and Passover, the countdown clock begins toward a potential government shutdown.

Lawmakers left town last Friday insisting there would be no government shutdown when the current stopgap measure funding the government expires on April 28. For several weeks, House and Senate appropriators have been slowly negotiating a catchall  or omnibus spending package to complete FY2017, and have been making headway. That said, obstacles remain.  

One primary obstacle is when Congress reconvenes in the final week of April, there will be only four legislative days left when both chambers are in session to get a catchall bill introduced and enacted. While its is certainly something that Congress can achieve, the timeframe leaves little room for error. 

A second major obstacle is that negotiators have yet to definitively resolve how – or whether – to accommodate President Donald Trump’s 11th-hour request for an extra $33 billion in military and border security money. While the proposal is a nonstarter with most Democrats, how to handle the border wall request in the supplemental is causing internal Republican concerns. In March, Trump has requested an extra $3 billion for enhanced border security, including about $1 billion that would be used as a down payment toward a wall. The Administration also wants to give the military a $30 billion boost for the current FY 2017, which would be offset by cuts to domestic spending. However, to do so so would require renegotiating the overall defense spending level permitted under a two-year bipartisan budget deal, which pushed off the sequester caps for two years. To change those caps would certainly require a bipartisan deal. How or how much Congress addresses the supplemental request remains to be seen.

If negotiations stall, a fallback option would be to pass another CR that would simply extend current funding levels for several more weeks or months. That option, however, riles defense hawks because it would leave the military unable to start new programs and gives pause to Democrats, who are concerned about the tremendous latitude given to spending and programs given to the Administration during a CR.

 

Stay tuned.

Trump Requests Additional Funding for FY2017

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Today, the Administration sent a supplemental appropriations request to Congress asking for an additional $30 billion for the Department of Defense (DOD) to rebuild the U.S. Armed Forces and accelerate the campaign to defeat the Islamic State of Iraq and Syria (ISIS), and an additional $3 billion for the Department of Homeland Security (DHS) for urgent border protection activities. For DOD, $5 billion would go into the Overseas Contingency Operations fund, which is not subject to sequester budget limits.

The Administration proposes the remainder, $18 billion, to come from unspecified nondefense discretionary spending.

Federal Relations is tracking this issue.

Health Care Keeps Moving, Senate Moves on Confirmations

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The House will keep moving on health care reform as the Capitol recovers from snow Monday night. While GOP leaders quickly dismissed the CBO’s report on the replacement bill released late Monday as either incomplete or inaccurate, Democrats held the report as evidence that repeal the law should be stopped. The House appears to be moving full steam ahead. The House Budget Committee is next to consider the American Health Care Act (AHCA) in what should be another eventful, and long, markup.

The analysis by the CBO and the Joint Committee on Taxation found that the GOP legislation would save money by making large cuts to Medicaid and eliminating the subsidies designed to help low-income people buy insurance under the current law .  Those subsidies would be replaced by tax credits that would generally be less generous, the study said.

In the short term, the effect of the Republican plan could be painful, according to the analysis. Next year, 14 million more people would be uninsured than under current law. Average premiums for single policyholders in the individual marketplace would be 15 percent to 20 percent higher than under current law. Premiums would spike mostly because fewer people who are relatively healthy would sign up for insurance once the current law’s mandate to buy coverage ends.

But after a decade, the report said, average premiums would decline by 10 percent compared to current law because of several factors. Those include a new grant program for states, more freedom for insurers to offer less generous coverage and a younger mix of enrollees.

Over in the Senate,  GOP Senators huddled with key House committee chairmen, HHS Secretary Tom Price, and Vice President Mike Pence over lunch Tuesday to plot strategy on moving the bill forward in the Senate. Numerous Republican Senators have come out against or with extreme hesitancy to the AHCA.

All the health care issues have overshadowed two Senate confirmations this week, confirming former Indiana Senator Dan Coats as director of national intelligence and Lt. Gen. H.R. McMaster as Trump’s national security adviser.