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Category: Budget

Welcome to the New Fiscal Year!

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With the passage of a continuing resolution late last night, the federal government is open for business on this first day of FY2016! The threat of shutdown diminished greatly last Friday when House Speaker John Boehner (R-OH) announced his retirement effective October 30, 2015.

The CR will fund federal through December 11 and includes $1.017 trillion in annualized spending, which is roughly equal to the FY2015 level (most programs would be funded under the CR at a rate 0.21 percent lower than enacted FY2015 levels). The CR would continue to fund Planned Parenthood and also provide $700 million in emergency dollars to fight Western wildfires. It would also renew expiring authorizations for the E-Verify program and the so-called Internet Tax Freedom Act (PL 105-277).

So, what happens between now and December 11? There are many possible outcomes for FY2016 appropriations. In the best case scenario, Congress could effectively negotiate a budget deal – similar to the 2013 Murray-Ryan deal – which would lift the budget caps for both defense and non-defense discretionary spending and remove the ongoing threat of sequester. This would pave the way for advancing spending bills (or an omnibus bill) before the December 11th deadline. If a budget deal is slow to materialize, then we could see another short term CR to give Congress more time to negotiate this deal. If budget negotiations fail, we could see the threat of shutdown reemerge or Congress could agree to a yearlong CR at FY2015 levels.

Early signs indicate that a budget deal is possible. Senate Majority Leader Mitch McConnell (R-KY) has already initiated preliminary discussions with President Obama and Speaker Boehner on a possible deal. Additionally, Democratic staff said this week that they are already beginning to set new topline numbers and identify possible offsets.

The Office of Federal Relations will continue to monitor and report on progress.

Senate Advances Clean CR

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On Monday, the Senate took the first step toward approving a continuing resolution (CR) to fund federal government through December 11, 2015. They will take a final vote on the measure on Wednesday – the last day of the current fiscal year – and then send it to the House for consideration at before current budget authority expires Wednesday night at midnight.

Senators voted 77-19 in favor of limiting debate on an amendment containing the text of the so-called “clean” CR (HR 7190. The CR would fund federal agencies for 90 days and keep federal dollars for Planned Parenthood in place despite opposition from conservatives.

The House must pass the stopgap before the end of the day Wednesday in order to avert a shutdown and appears on track to do so with relatively little drama. Legislative obstacles in the chamber seemingly evaporated after Speaker John Boehner (R-OH) announced his retirement Friday.

The stopgap provides funding for federal agencies at an annualized rate of $1.017 trillion, which is roughly flat compared to current funding levels. The CR notably includes $700 million in emergency funding to suppress Western wildfires, flat funding for the non-capped war account, and a reauthorization of the E-Verify program and the Internet Tax Freedom Act.

The Obama administration said in a Statement of Administration Policy issued Monday night that it would support the CR.

Move to Defund Planned Parenthood Fails in Senate

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Senate Democrats and a eight Republicans blocked a proposal that a constituted a continuing resolution that would run through December 11 and prohibit for one year federal funding for Planned Parenthood or its affiliates unless they certify that they will not perform or fund abortions during that period. The Senate rejected, 47-52, the motion to invoke cloture on the substitute amendment to the joint resolution. The measure failed to even win a simple majority vote.

Sixty votes were needed to advance the measure. Republican senators voting with Democrats included Senators Kelly Ayotte (R-NH), Susan Collins (R-ME), Tom Cotton (R-AR), Dean Heller (R-NV), Mark Kirk (R-IL), Lisa Murkowski (R-AK), Rand Paul (R-KY), and Ben Sasse (R-NE).

Following the failure, Senate Majority Leader Mitch McConnell moved to set up a vote on a clean spending bill that would avert a government shutdown on Oct. 1, although House Speaker John Boehner still has not said whether his chamber will take up the Senate legislation.

The Senate is expected to take a cloture vote in relation to a “clean” continuing resolution on Monday, September 28th, two days before the government’s funding authority expires.

Continuing Resolution Released

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Senate Appropriations Committee Chairman Thad Cochran (R-MS) just released the text of a short-term continuing resolution. Immediately following that announcement, Senate Majority Leader Mitch McConnell (R-KY) offered that CR as a substitute amendment to H.J.Res.61 and filed cloture on the amendment. That cloture vote is expected to occur Thursday afternoon at a time to be determined. That vote is expected to fail with Democrats voting against it.

Majority Leader McConnell will then strip out the Planned Parenthood defunding provision and the Senate would vote on a clean CR. Procedurally, they would have to take at least one additional cloture vote to advance the clean CR, which could occur over the weekend with final passage possibly delayed into next week. Assuming that clean CR passes, the House next week will have to decide whether to accept it and keep the government open or reject it, leading to a shutdown.

The proposed CR would keep government operating through December 11, 2015. It provides funding for all discretionary programs at the FY2015 levels, except for a very small number of anomalies, such as an additional $700 million to fight wildfires.  It contains a small across-the-board cut of 0.2108 percent to keep total funding under the FY2016 budget caps.

For more details see on the substance:

FY2016 Continuing Resolution One-Pager

FY2016 Continuing Resolution Section-by-Section Analysis

FY2016 Continuing Resolution Legislation

 

September Budget Deal Looks Unlikely

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Congressional leaders have given no indication they are in active negotiations on a long-term budget deal that would avert another round of sequestration. And there is little time left in the federal fiscal year to begin and conclude this type of deal with only eight scheduled legislative days between now and October 1st.

And between the Jewish holidays, the papal visit, and ongoing debate on the Iran nuclear deal, very little time remains for GOP leadership to build enough support to get continuing resolution (CR) approved by the House and sent it to the Senate. Congress must move some sort of appropriations bill before October 1st in order to avoid a politically embarrassing government shutdown. If Republicans want to adhere to their self-imposed three-day rule for considering legislation and vote on the stopgap next week, they would need to publicly post the text by Wednesday, when the House returns from a long Rosh Hashanah holiday weekend. So far, there are few details about the possible contents of the CR and its duration. Most importantly, it still is unclear whether GOP leaders will include a Planned Parenthood-related rider or language related to other issues, such as the nuclear deal with Iran.

Ultimately, we will likely see a CR approved just in time to avoid a government shutdown and then Congressional leaders will use the next couple of months to hammer out a deal on FY2016 appropriations. If they can’t come to agreement to lift the budget caps, we might see a strategy emerge to advance a year-long CR that maintains the status quo for federal spending and doesn’t trigger sequestration.