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Category: Committee Work

Budget? Budget?

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The Senate Budget Committee will take its first steps on a framework for federal spending and tax cuts in FY 2018 this week.

The Senate Budget Committee released its FY 2018 draft resolution on Friday that would establish the path for consideration of revenue, spending, and other fiscal legislation.

Senate Committee will debate overall limits on discretionary spending for the coming fiscal year and 10-year projections, as well as mark up the resolution on Wednesday and Thursday. If adopted, it could become an enforcement tool — through points of order — during the annual appropriations process. House and Senate majority were attempting to use   the FY 2018 budget as a means to further repeal the ACA — the House included language to instruct committees to do so — but all language instructing the Senate Committees to do similar has been stripped. Rather, the Senate focuses on tax reform, signaling a pivot in the Majority’s priorities.

The focal point of the legislation is the draft language instructing the Senate Finance and the House Ways and Means committees to increase the deficit by $1.5 trillion over the next decade. That number gives the tax-writing panels the opportunity to alter the tax code.

The whole Senate will begin its annual Budget consideration process, known as “vote-a-rama,” the week of October 16th.

Meanwhile, the full House plans to vote Thursday on its own budget resolution, which also would advance what would be the most sweeping tax overhaul in more than three decades. That plan would require Congress to cut at least $203 billion from entitlement programs over 10 years. House leadership has suggested the Senate version is more likely to prevail in a final compromise and the language on entitlements is likely to be stripped on the House floor.

There are other notable differences between the House and Senate budgets. For instance, the House budget includes instructions for a tax plan that does not increase the deficit, but the Senate budget would let tax writers add $1.5 trillion to the deficit over a decade. The Senate provides $549 billion for defense spending and $516 billion for nondefense discretionary programs, which are levels in line the the Budget Control Act caps. The House measure provides $621.5 billion for defense programs and $511 billion for nondefense discretionary programs. Since the House provides levels significantly beyond the BCA caps, enacting such a measure would take an act of legislation (and a signature by the President), which is beyond the scope of a typical Congressional budget, a document that only binds Congress and is not signed by the President.

Eventually, the two chambers would have to agree on a budget for Congressional Republicans to use reconciliation.

Big Six Reveal Tax Reform Framework

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As expected, the long-awaited proposal released Wednesday. Negotiated by the “Big Six” — Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Majority Leader Mitch McConnell, House Speaker Paul Ryan, House Ways & Means Chairman Kevin Brady, and Senate Finance Committee Chairman Orin Hatch —  is heavy on promoting the Republican tax cut desires and light when it comes to explaining whose taxes will have to go up to help control costs. There is still a lot unknown about the plan with any specificity. While there is an agreement that the tax cut proposal will have some deficit impact, the plan will partially defray the cost with offsetting tax increases, but how and what will do so remains unclear.

The full blueprint is here and a one-pager is here.

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!!

House Passes Omnibus, Senate Next

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The House just passed a sweeping FY 2017 Omnibus appropriations bill (H.R.244) to fund the government through Sept. 30. The House is sending the $1.07 trillion spending package over to the Senate for a vote later this week, likely Friday. The House vote was 309-118. The lengthy legislation comprises 11 unfinished appropriations bills, along with an intelligence authorization bill and other provisions.

The White House has formally backed the spending agreement, and the Senate is expected to clear the legislation as soon as Thursday. The bill must pass the Senate and be signed by midnight Friday or government funding under a continuing resolution would expire causing a shutdown.