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Category: Budget

Mid-Year Appropriations Update

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The appropriations process hit its long-anticipated brick wall last Thursday, as Democrats voted to block, 50-45, the $567 billion Defense spending bill from being considered on the Senate floor.  The move to consider the Defense spending bill as the first appropriations measure on the floor was part of a strategy formulated by Senate GOP Leader Mitch McConnell (R-KY) to put Democrats in the politically awkward position of choosing between a new budget agreement and the military. Senate Democrats continue to say that they want a negotiated budget to replace the spending cuts to national defense and domestic investments known as sequestration. Meanwhile, the White House threatened a veto of the bill should it reach the president’s desk.

Now that the appropriations process has reached its expected impasse, it might be a good time to start talking about the shape of a budget deal. Many hope to see something similar to the two-year deal brokered by Senator Patty Murray (D-WA) and Congressman Paul Ryan (R-WI). The advantage of this type of deal would help avoid another budget battle in 2016, when lawmakers will be campaigning. It also would allow the next Congress to negotiate the future sequester with a new president. Or they could try a fallback one-year deal.

Another option would be to approve a series of stopgap funding measures or a long-term continuing resolution that would stretch current FY2015 spending levels and policy priorities into next year. Such a deal may be undesirable for many, since it would provide agencies with little flexibility and would allocate less base funding for defense and domestic programs than the current appropriations bills. But the worse case scenario would be another government shutdown. No one wants it but everyone thinks they have the upper hand, including tea party conservatives, GOP leaders, defense hawks, and Senate Democrats.

Regardless of the bleak outlook for FY2016 appropriations, several bills continue to move through the process. The House has passed six of the twelve annual spending bills, including Commerce-Justice-Science, Defense, Energy-Water, Legislative Branch, Military Construction-VA, and Transportation-HUD. Interior-Environment is the seventh on the docket and will be considered this week. Three more bills have been reported out of committee and are ready for floor consideration: Financial Services, Interior-Environment and State-Foreign Operations. Homeland Security is the last of the twelve bills to be considered and has yet to get a subcommittee markup. Seven bills made it through the House last year before the process ground to a halt.

In the Senate, six spending bills have been reported out of committee: Defense, Energy-Water, Commerce-Justice-Science, Homeland Security, Interior-Environment, and Legislative Branch. Defense was the lone attempt to bring a bill to the Senate floor, though Republicans might give it another try in the near future to see if they can break the Democrats resolve to block spending bills.

Senate Passes NDAA, but FY16 Defense Funding Stalls

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The Senate passed the unusually contentious FY16 NDAA, by a vote of 71-25, today. The Senate had planned to move ahead to tackling Defense Appropriations on the Floor, but the measure failed to receive 60 votes needed to invoke cloture and proceed.  As a reminder, the President has issued a veto threat on the bill and Senate Democrats have promised to block any appropriations bills that rely on the current spending plan. The FY16 appropriations cycle was left in limbo after Senate Democrats appeared to have succeeded in torpedoing a procedural vote that would have allowed debate to begin on the FY16 Defense appropriations bill. Democrats in Congress and the White House are opposed to the underlying spending framework.

The full Senate Appropriations Committee marked up the Defense bill on June 11, and here is the press release.

In the bill:

  • RDT&E: $70.325 billion, which is $539.7 million above the President’s FY16 request
  • Basic Research: $2.317 billion, which is $228.5 million over the FY16 request, and a $39.341 million over FY15 enacted.

The report included this language: “The Committee believes that further investment in basic research must continue.  Basic research is the foundation of innovative breakthroughs that are critical to maintaining the Nation’s future technological edge.  Investments in basic research not only provide advances in technology for our military men and women, but also provide an important incubator for national labs and academic research institutions.  These investments also encourage partnerships and collaboration with industry.  In order to keep pace with the global challenges to come, the Committee believes that additional funding should be allocated to Federal research.”

  • Applied Research: $4.928 billion, which is  $215 million over the FY 16 request and $280.3 million over FY 15 enacted.
  • Advanced Technology Development: $5.577 billion, which is $113.6 million above the FY 16 request and $251.5 million over FY 15 enacted.
  • DARPA: $2.865 billion, which is $107.1 million below the FY 16 request and $50.4 million below FY 15 enacted.

FY2016 Labor-HHS Bill Moves Through Subcommittee

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The House Labor-HHS-Education Appropriations Subcommittee approved its FY2016 spending bill by voice vote, with all Democrats voting against the proposal. The panel earlier had rejected a dozen amendments in a series of voice votes, with partisan splits apparent over family planning and the implementation of the 2010 health law. However, members of both parties made it clear that they would like to see a new law passed to ease the cap now in place on most federal spending. The measure will be considered by the full appropriations committee next week.

Given the return of sequestration in full force for FY2016, the Labor-HHS panel may have little room to do more than tweak budget accounts. The current budget caps for discretionary spending will make it difficult to reward favored programs without making deep reductions elsewhere.

The Labor-HHS-Education bill may be the one bill that thwarts the Republicans’ goal of moving all 12 appropriations measures by the end of the federal fiscal year (September 30th). Because of the politically-contentious policies carried out through the bill – such as abortion, labor issues, and the Affordable Care Act – there are strong doubts that even GOP control of both the House and Senate can get Congress back in the habit of considering it beyond an omnibus spending package.

But there is a bit of a new dynamic this year, since the Labor-HHS bill funds agencies charged with facing some of the nation’s most pressing issues, including the lingering threat of Ebola, a resurgence of measles, and calls to move ‘cures’ through clinical trials faster. There’s interest in both parties in the budget and operations of the Centers for Disease Control and Prevention and the National Institutes of Health.

Next week’s full committee mark-up of the Labor-HHS bill will likely be a repeat of yesterday’s subcommittee mark-up. We will see lots of amendments fall along party lines, and the underlying bill will remain largely unchanged from its current draft. And while the full House will likely approve the measure, action in the Senate is still in doubt as Democrats have vowed to block all FY2016 spending measures until a new budget deal is agreed on that will lift the spending caps.

White House Signals Concerns with FY16 House’s Financial Services and Senate’s Defense Funding Bills

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Continuing its theme, the White House, though the White House’s Office of Management and Budget (OMB) Director Shaun Donovan, signaled concerns with two more Congressional appropriations bills. Donovan wrote the House Appropriators about the FY16 Financial Services and General Government appropriations bill and Senate Appropriators about the FY16 Defense appropriations bill.

The White House warned that the House’s FY16 Financial Services spending bill, scheduled to be marked up today, would jeopardize the independence of financial regulators, cost billions of dollars in lost tax revenue and hinder implementation of the 2010 health care overhaul.

Similar to previous warnings about the House and Senate NDAA bills and the House’s FY16 Defense spending bill,  Donovan warned that, “The president’s senior advisers would recommend he veto any legislation that implements the current Republican budget framework.” According to the OMB, the Senate’s legislation would implement a “gimmick” by shifting money to war accounts, the Overseas Contingency Operations (OCO) funding,  from core budget lines. He also criticized the Senate Appropriations measure’s proposal for “unnecessary” funding of a National Guard and Reserve Component Equipment Account. ​

The White House and Congressional Democrats have been very vocal on a need for Congress to collectively come to the table and cut another deal, similar to the one Senator Patty Murray (D-WA) and Congressman Paul Ryan (R-WI) cut in 2013 in 2013 (Murray-Ryan), to avoid the cuts as required by the Budget Control Act of 2011(sequester). The House is crafting all bills, legislative and appropriations, under the financial caps and resrtaints set by the Budget Control Act, which was binding until 2021.

Read the the letter to House Appropriators about the House’s FY16 Financial Services bill here. 

Read the letter to Senate Appropriators about the Senate’s FY16 Defense bill here. 

OMB Signals Concerns on House FY16 Interior Bill

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Due to be marked up today, the White House signaled concerns to House Appropriators about their $30.2 billion FY16 Interior-Environment spending bill. Office of Management and Budget (OMB)  Director Shaun Donovan criticized the measure for the proposed cuts to the US Environmental Protection Agency (EPA) as well as riders to block implementation of various air and water rules.

The Interior-Environment appropriations bill funds the EPA, U.S. Forest Service, Interior Department, the Smithsonian, and Indian Health Service. Donovan criticized the measure for its “misplaced priorities” and funding levels that fall 9 percent below the President’s request as well as cuts to the Indian Health Service and Interior’s climate resilience, land management and conservation efforts.

This letter from Donovan is not the first effort the Administration has used to signal displeasure with House Appropriations bills. Donovan wrote similar letter about the House CJS measure, and the White House has issued veto threats on the NDAA and House Defense appropriations bills.

Read the OMB letter to House Appropriations here.