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.
Category: Committee Work
Keep Calm with Appropriations and Carry On
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.
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.
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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?
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
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.
White House Issues SAP on FY 2017 Omnibus
Today, the White House has issued a Statement of Administrative Policy (SAP) on H.R. 244, the Consolidated Appropriations bill, also known as the FY 2017 Omnibus. While the White House says it is concerned that Congress did not go far enough in funding some priorities, it is a good first step, but priorities should be funded in FY 2018.
Long and short, no veto threat on this bill, but maybe the next one.