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Category: Appropriations

House Budget Released

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US Capitol (AOC)

House Budget Committee Chairman Tom Price (R-GA) released the House Republican budget draft today, which in recent years has been largely a political document. The House Democrats are expected to release a competing draft soon. The federal budget, while it does not become law, does have to pass both chambers of Congress and will guide the House and Senate on federal spending. In addition, the budget typically charges the respective legislative bodies on sweeping policy initiatives, such as tax reform, which is what then-Chairman Paul Ryan (R-WI) suggested last year. This year, Chairman Price includes the repeal of Dodd-Frank and Obamacare, proposes a premium support system for Medicare, asks for a bipartisan study and report to Congress on the problems facing the Social Security program, and would eliminate the Alternative Minimum Tax.

Additionally, the final budget will guide the respective House and Senate Appropriations Committees on how much funding is available to begin work on the 12 annual appropriations bills.

The details are not yet clear, but at first blush, the bill would aim to balance the budget in nine years and create a surplus by 2025.  The measure would also cut $5.5 trillion over the next decade.  This would be achieved by eliminating duplicative programs and eliminating programs within agencies that are not “core functions” of the federal government. Examples of these duplicative, beyond the scope or “corporate welfare” programs cited include, job training programs, and eliminating the Hollings Manufacturing Extension Program  and Trade Promotion Activities at the International Trade Administration.

Redundancies and misuse of tax dollars called out include:

  • There are 92 different anti-poverty programs.
  •  There are 17 food aid programs.
  •  There are 22 housing assistance programs
  • An Inspector General report revealed that employees at the Environmental Protection Agency are taking paid leave after work-related violations.
  • The Department of Defense and the Central Intelligence Agency, two of the most important agencies in our national security apparatus, currently spend part of their budget studying climate change.

For higher education, the legislation proposes a new framework to use “federal dollars more efficiently” in higher education — but details on what that framework would be are thin. Pell grant awards would both be capped for next decade and limited to the neediest borrowers.

The bill would also replace or prevent Sequester cuts — although how is unclear. The measure would keeping the 2011 budget ceilings, and would impose a $1.017 trillion ceiling on spending in the fiscal year beginning on Oct. 1. Domestic discretionary programs would get $493 billion, with $523 billion allotted for the Pentagon’s base budget. The GOP budget ignores Obama’s request for $74 billion in additional spending.

Already, the GOP members of the House Armed Services Committee has been less than committal to the measure. It remains to be seen if the measure will enjoy unified Republican support.

An overview of the House Budget Committee draft can be found here.

The Office of Federal Relations will continue to update on this issue as more information becomes available.

DHS Funding Passes House

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Today, the House passed the FY2015 appropriations for the Department of Homeland Security (DHS). In what has been a protracted standoff between the House, the Senate and the Administration, the House passed a clean bill, meaning it was free of any policy riders on immigration that the House GOP had previously attached to similar measures.

This ends a three month standoff between Congress and the Administration on the President’s recent executive order to shield approximately 5 million undocumented immigrants from deportation. In December, Congressional Republicans decided to pass all the FY15 appropriations bills, but for the DHS bill, in an effort to curb the President’s administrative actions, which the House GOP considers unconstitutional. The Department has been funded under a continuing resolution that expired at the end of February.

In January, the House had passed the DHS bill with restrictive funding language essentially curtailing what the Republican’s considered the Administration’s ability to follow through on the executive order. The DHS bill with the policy riders became impossible to pass through the Senate, as Senate Democrats remained unified against the riders and refused to pass anything but a stand alone bill.

Late last week, the House and Senate had to scramble to pass a short-term, one-week extension on DHS funding. Earlier in the week, the Senate passed a clean bill, which was sent to the House for consideration today.

The measure passed 257-167, with 182 Democrats and 75 Republicans voting to beat a Friday midnight deadline for DHS funding to expire. Voting against the measure were 167 Republicans, many in protest to the lack of language to block Obama’s immigration policies.

The bill now heads to the President for his signature.

New Plan for Homeland Security Appropriations Bill

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For the fourth time, Senate Majority Leader Mitch McConnell (R-KY) was unable evening to call up a $39.7 billion House-passed Department of Homeland Security (DHS) spending bill on Monday evening amid united Democratic opposition to provisions blocking recent executive action on immigration riders.

Following the failure, Senate Majority Leader Mitch McConnell moved to consider a standalone bill narrowly targeting the President’s 2014 Executive Order and sparing the Administration’s 2012 action aimed only at certain young immigrants. It’s the Republican leader’s first step in trying to disentangle the immigration fight from a funding bill for the Department of Homeland Security.

At present, it looks like the the Senate may have no choice now but to fund the agency on a short-term basis. The move towards disentanglement is designed to sway a small number of Democratic Senators towards moving the bill, while also avoiding a shut down of the security agency. Further, it avoids a shutdown of the agency and the political blame that the Republicans would face (and fear similar to what happened with the last shut down) if DHS is shut down.

If funding does lapse, there would be 30,000 furloughs while approximately 75 to 80 percent of DHS employees would have to work without pay. Historically, Congress has given essential workers back pay for the duration of a funding lapse, but such funding is certainly not guaranteed. DHS Secretary Jeh Johnson warned Congress that a stopgap measure would also have consequences, including delayed improvements to border security and delayed state and local aid.

The continuing resolution funding for DHS expires on Friday.

 

Senate Fails to Pass Homeland Security Spending Bill

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The Senate failed to evoke cloture and pass the Department of Homeland Security spending bill for FY15. In an ironic twist, Senate Democrats used procedural maneuvers they so railed against in previous congressed to block the measure from moving forward. The 46 Senate Democrats banded together to block the bill from coming to the Senate floor for consideration. To consider the measure by the Senate 60 votes are needed, and the measure failed by a vote of 51-46.

The House passed the $39.7 billion measure (HR 240) earlier this year to fund the Department of Homeland Security. The House measure also contained several controversial provisions to block the Administration’s new immigration policy announced in November 2014.

Senate Majority Leader Mitch McConnell (R-KY) is expected to try and bring the bill up again later this week. However, there is no clear path forward to funding the Department of Homeland Security for FY15 and addressing the Executive Order which Republicans see as a gross overstep of Executive Power. Republicans see combing the two as the best path forward, while Senate Democrats are insisting they will only pass a clean appropriations bill.

 

State of The Union

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Tonight at 9 pm Eastern, 6 pm Pacific, President Obama is scheduled to give his 6th State of the Union address to Congress. The White House has been previewing certain initiatives, such as two years of free community college and paid sick leave, in advance of the speech tonight.

Tonight, however, the crux of his speech is expected to center around his economic proposals to promote the middle class and make a case for increasing federal spending on education and technology priorities. It is unclear, however, how his proposal to handle the largest funding issue confronting this last two years in office, the return of the Sequester spending cuts, will be received. The President is expected to propose increasing federal spending above the Budget Control Act levels in part by increasing taxes for the rich – his starting position in negotiations with Republicans that will ultimately determine the size of the budget for FY16.

Obama is unlikely to call for specific increases in stringent sequesters spending caps that start again in 2016, but he could call for ways to re-direct funds within those caps or come up with new revenues. As a remedy for past sequesters, the President has suggested maintaining funding for his priorities by increasing corporate taxes mainly by closing loopholes. That plan now would almost certainly be a non-starter on Capitol Hill with Republicans controlling both chambers.

The President did preview his tax increase proposals over the weekend, which included imposing a fee on financial institutions, closing the capital gains tax loophole on inherited assets, and raising the top rate of capital gains and dividends back to the Reagan rate of 28% among others. Additionally, Obama will propose increased and streamlined tax credits for the middle class for child care, two-earner families, and retirement savings.

For higher education, the President will propose consolidating the six overlapping education provisions into just two, while improving the American Opportunity Tax Credit (AOTC) to provide more students up to $2,500 each year over five years as they work toward a college degree. This move would likley make the AOTC permanent, index it to inflation, increase refundability, and resolve a significant problem of coordination with Pell grants that disadvantages low-income students. However, it is unclear how the  Lifetime Learning Credit would be handled and the impact on graduate students.

Read more about the President’s tax proposal here.

Watch the State of the Union at 9pm EST, 6 pm Pacific on most television stations tonight.