FY17 Budget Resolution

House Republicans were supposed to adopt an FY17 budget resolution this week before adjourning for the spring recess, but disagreement by the House Freedom Caucus over the $1.07T discretionary spending level caused House leaders to delay action on the budget until after the recess. The House Budget Committee approved the FY17 budget resolution last week by a vote of 20 to 16 with two Republicans opposed. But its consideration on the floor has been postponed because it lacks enough GOP support to pass. This week, the committee released the report accompanying the budget resolution, which can be found at:

http://budget.house.gov/uploadedfiles/fy2017_budget_resolution.pdf

The House returns on April 12, leaving just four days to adopt a budget by the statutory deadline of April 15. House Speaker Paul D. Ryan (R-WI) has said that he wants the House to adopt a budget resolution. House Budget Committee Chairman Tom Price (R-GA) tried to broker an agreement with the Freedom Caucus by coupling the FY17 budget resolution with consideration of separate legislation that would cut $30B in entitlement programs. The House Ways and Means Committee has already passed legislation providing about $98B in spending cuts and offsets over 10 years, and the House Energy and Commerce Committee approved a bill that would cut spending by $25B over 10 years. But the House Judiciary Committee adjourned a markup this week that would have overhauled the medical liability system providing savings to make up part of the $30B. The Judiciary Committee cited scheduling conflicts and an insufficient number of members for a quorum as the reason for the adjournment. Finally, the House Financial Services Committee is planning a markup for after the recess that would add to the $30B spending cuts, but the Agriculture Committee is not likely to take up any measures until the chairman knows that the budget process is going to move forward. Conservatives in the House are skeptical that the $30B in cuts will be enacted into law. So some Republicans in the House are now working on a mechanism that could make the $1.07T discretionary spending level contingent on enactment of legislation making $30B in cuts to mandatory spending programs.

While leadership tries to work this out, aides are considering alternatives to a budget resolution including a “deeming” resolution that would set a simple topline discretionary spending limit. However, they would need the support of Democrats to get this passed, which would risking weakening GOP unity. Or they could proceed to the annual appropriations bills without a budget resolution.

On the Senate side, Senate Budget Committee Chairman Michael Enzi (R-WY) is planning on using the Balanced Budget Act of 2015 to provide the necessary authority for setting the $1.07B top-line discretionary budget.

FY17 Appropriations

The House Appropriations Committee kicked off the FY17 appropriations process this week with the Military Construction/Veterans Affairs (MilCon/VA) subcommittee marking up its $81.6B FY17 spending bill. The bill is $1.8B more than the FY16 enacted level, but $1.2B less than the President’s FY17 budget request. It provides $7.9B for military construction projects (a decrease of $305M below FY16 enacted levels and $250M above the President’s FY17 budget request) and $73.5B in discretionary funding for the Department of Veterans Affairs (an increase of $2.1B over FY16 enacted levels). The bill was approved by voice vote in the subcommittee, and the target date for full committee markup is April 13. A copy of the draft bill text can be found at:

http://appropriations.house.gov/uploadedfiles/bills-114hr-sc-ap-fy2017-milcon-subcommitteedraft.pdf

With no budget resolution adopted in the House, House Appropriations Committee Chairman Hal Rogers (R-KY) is instructing his committee to markup their bills at the $1.07T overall discretionary funding level. But he did not give his subcommittee chairmen “notional” discretionary allocations (302(b)s) for their individual bills before leaving for the spring recess. Rogers has said that he supports bringing the bills to the floor after May 15 if there is no budget resolution in place by then. Under the 1974 budget law that created the current day appropriations process, the House must wait until after May 15 to bring spending bills to the floor unless that rule gets waived. Rogers acknowledged that it would be up to House leadership to waive this rule, but indicated that he intends to have all (or as many as possible) of the 12 spending bills through full committee and ready for floor action by May 15. Ranking Member Nita Lowey (D-NY) has asked Rogers to prioritize the Commerce-Justice-Science and Homeland Security bills in the process given the attacks in Belgium. However, Rep. Mike Simpson (R-ID), Chairman of the Energy and Water subcommittee, has said that his subcommittee’s bill “probably” would be next.

Despite the House Freedom Caucus voting to reject the FY17 budget resolution during a meeting on Monday night, the House Budget Committee pushed forward with their scheduled markup on Wednesday. Members of the Freedom Caucus said that they would accept a budget resolution for $1.04T in discretionary spending, or $1.07T as long as there was an agreement that $30B in cuts in mandatory spending would be signed into law by the President at the same time.

While the Budget Committee did approve the budget resolution by a vote of 20 to 16 and the House often votes on it on the floor the following week, House leadership announced late this week that the budget won’t be on the House floor until after the Spring recess.

In an effort to garner conservative support for the FY17 budget resolution, the Ways and Means Committee approved three measures this week that provide about $98B in spending cuts and offsets over 10 years. The three measures are expected to move on the floor as part of a single measure carrying spending cuts and revenue-raising measures reported by several committees.

1. HR 4722, a bill requiring inclusion of the taxpayer’s social security number to claim the refundable portion of the child tax credit. (Raises ~$19.9B over 10 years)

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Johnson-TX03.pdf

2. HR 4723, a bill providing for the recovery of improper overpayments resulting from certain Federally subsidized health insurance (“Obamacare”). (Raises ~$16.6B over 10 years)

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Jenkins-KS02.pdf

3. HR 4724, a bill repealing the program of block grants to States for social services. (Raises ~$16.5B over 10 years)

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Brady-TX08.pdf

And the House Energy and Commerce Committee approved on a party-line 28 to19 vote legislation that would cut spending by $25 billion over 10 years. HR 4725 would repeal the Prevention and Public Health Fund, which was created under President Obama’s Affordable Care Act; reduce Medicaid reimbursements to states for prisoners; and scale back the federal match for the Children’s Health Insurance Fund.

HR 4725:

https://www.congress.gov/114/bills/hr4725/BILLS-114hr4725ih.pdf

Despite the questionable outcome of the FY17 budget resolution, appropriators on both sides are moving forward with their spending bills. The House Military Construction-Veterans Affairs (MilCon-VA) Appropriations Subcommittee is scheduled to mark up its FY17 spending bill in subcommittee next Wednesday morning (9 AM). Since 302(b)s have not been issued to subcommittees yet, MilCon-VA Subcommittee Chairman Charlie Dent (R-PA) has been given a “notional” discretionary spending figure. The Senate Appropriations Committee is expected to kick off marking up its spending bills with the FY17 MilCon-VA on April 14. However, Senate Appropriations Committee Chairman Thad Cochran (R-MS) said that his committee won’t necessarily follow the same order as House Appropriators for following bills.

House Minority Leader Nancy Pelosi (D-CA) and other Democratic leaders reiterated a call for passage of an emergency supplemental appropriations bill to address the Zika virus, opioid abuse, and the Flint, MI water crisis before the House adjourns for the Spring recess. The letter addressed to House Speaker Paul Ryan (R-WI) can be found at:

https://www.vantagepointstrat.com/govdoc20160318-171893/

FY17 Budget Resolution

House Republicans are pushing plans to cut entitlement programs as they seek to come to an agreement on their FY17 budget resolution. House leaders had scheduled a call for today with the entire Republican House conference to try to determine if they have the votes to adopt a budget resolution. They are promising a vote on legislation cutting $30 billion in mandatory spending programs in return for passing a budget resolution. House Budget Committee Chairman Tom Price (R-GA) is hoping to mark up a budget next Tuesday or Wednesday with floor consideration the following week.

House Ways and Means Committee Chairman Kevin Brady (R-TX) offered three bills this week that would cut spending by $16.5B over two years:

1. HR 4722, a bill requiring inclusion of the taxpayer’s social security number to claim the refundable portion of the child tax credit.

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Johnson-TX03.pdf

2. HR 4723, a bill providing for the recovery of improper overpayments resulting from certain Federally subsidized health insurance (“Obamacare”).

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Jenkins-KS02.pdf

3. HR 4724, a bill repealing the program of block grants to States for social services.

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Brady-TX08.pdf

The House Energy and Commerce Committee also plans on taking action on legislation that would cut spending by $25 billion over 10 years. HR 4725 would repeal the Prevention and Public Health Fund, which was created under President Obama’s Affordable Care Act; reduce Medicaid reimbursements to states for prisoners; and scale back the federal match for the Children’s Health Insurance Fund.

HR 4725:

https://www.congress.gov/114/bills/hr4725/BILLS-114hr4725ih.pdf

The House authorizing committees are planning on marking up these bills next week if the decision is made to go forward with an FY17 budget resolution. Democrats are likely to oppose these measures, which means that they don’t stand much of a chance of being passed by the Senate even if the House passes them.

On the Senate side, Senate Budget Committee Chairman Mike Enzi (R-WY) said that his committee is delaying consideration of a budget this month. Vulnerable Senators running for re-election this fall would prefer to not have to cast difficult votes cutting popular programs like Medicare. And any attempts to break from last year’s bipartisan agreement could delay the FY17 appropriations process in a year when Republicans have promised to restore regular order and the calendar is shortened due to Presidential nominating conventions. Enzi hasn’t ruled out returning to a budget resolution in coming months, but he has suggested that the Senate could live without one this year given last year’s two-year bipartisan budget agreement.

Meanwhile, in the Appropriations Committees, the Senate is planning to move the annual spending bills even without a budget resolution. Senate Majority Leader Mitch McConnell (R-KY) vowed to move forward with the appropriations process at the spending levels agreed to last fall. McConnell has stated that his number one goal this year is to pass regular appropriations bills on time. Senate Appropriators expect to receive their 302(b) allocations around April 15 or a bit later. The allocations allow the subcommittees to begin writing their spending bills.