House of Representatives

The House Appropriations Committee met this week and marked up its FY17 Agriculture and Energy and Water spending bills in full committee, and its FY17 Legislative Branch spending bill in subcommittee. The committee also approved its 302(b) allocations for these three spending bills.

House Freedom Caucus Chairman Jim Jordan (R-OH) said this week that conservatives in his caucus might support some of the FY17 appropriations bills that adhere to the $1.07T topline spending limit set by last year’s budget agreement. Members of the caucus are opposed to bringing the spending bills to the floor before May 15, but could support certain bills that fund defense, military construction, or veterans affairs after the budget resolution deadline. Members of the House Freedom Caucus are holding up adoption of a FY17 budget resolution because it reflects the higher $1.07T discretionary spending limit. They are insisting that the topline be lowered to $1.04T or that Congress passes and the President signs into law at least $30B in spending cuts.

Agriculture

The House Appropriations full committee approved a $21.3B FY17 Agriculture spending bill this week. The bill is $451M below the enacted FY16 level and $281M below the President’s FY17 budget request.

The full committee adopted the following amendments to the FY17 Agriculture Appropriations bill:

• Aderholt – The amendment makes technical and noncontroversial changes to the bill and report. The amendment was adopted on a voice vote.
• Cole – The amendment adds bill language to modernize the February 2007 predicate date for tobacco products. The amendment was adopted on a vote of 31-19.
• Farr – The amendment adds language to the bill to prevent the slaughter of horses for human consumption within the United States. The amendment was adopted on a vote of 25-23.
• Palazzo – The amendment adds bill language delaying a new rule by USDA that changes requirements for approved SNAP retailers. The amendment was adopted on a voice vote.
• Harris– The amendment adds bill language halting new FDA sodium guidance until the completion of an Institute of Medicine review. The amendment was adopted on a voice vote.
• Valadao– The amendment adds bill language that prevents the CFTC Swap Dealer de minimis level from automatically being lowered by 60 percent. The amendment was adopted on a vote of 30-19.
• Lee – The amendment adds bill language to use $1 million in USDA funding within the bill for loans and grants under the Healthy Food Financing Initiative. The amendment was adopted on a vote of 28-22.
• Harris –The amendment adds bill language to stop the implementation of a Grain Inspection, Packers and Stockyards Administration regulation that would place restrictions on poultry, beef and pork marketing arrangements. The amendment was adopted on a vote of 26-24.
• Rogers– The amendment adds bill language to clarify that certain existing, unobligated funding within the Departments of State and Health and Human Services shall be available to prevent, prepare for, and respond to the Zika crisis, both domestically and internationally. The amendment was adopted on a vote of 30-20.

Bill Text:

http://appropriations.house.gov/uploadedfiles/bills-114hr-fc-ap-fy2017-ap00-agriculture.pdf

Report Language:

http://appropriations.house.gov/uploadedfiles/hrpt-114-hr-fy2017-agriculture.pdf

Agriculture Adopted Amendments:

http://appropriations.house.gov/uploadedfiles/hmtg-114-ap00-20160419-sd004.pdfhttp://appropriations.house.gov/uploadedfiles/hmtg-114-ap00-20160419-sd004.pdf

Energy and Water

The House Appropriations full committee approved its $37.4B FY17 Energy and Water spending bill this week. Only a manager’s amendment making technical and noncontroversial changes to the report was adopted by the full committee before the bill was reported out. The bill is $259M above FY16 enacted levels and $168M above what the President requested for FY17.

The bill provides a total of $12.9B for DOE’s nuclear weapons security programs – a $327M increase above the FY16 enacted level. The Army Corps of Engineers is funded at $6.1B, an increase of $100M above FY16, and environmental management activities are funded at $6.15B – $66M below FY16. Funding for energy programs within DOE is $11.08B – an increase of $56M above FY16, and the bill includes $5.4B for science research – an increase of $50M above FY16. The bill also contains $1.1B ($131M below FY16) for the Department of the Interior and the Bureau of Reclamation. Finally the bill continues congressional efforts to support the Yucca Mountain nuclear repository, providing $150M for the Nuclear Waste Disposal program and $20M for the Nuclear Regulatory Commission to continue the adjudication of DOE’s Yucca Mountain License application. The legislation also denies the Administration’s funding proposals for non-Yucca nuclear waste activities.

Other policy items included in the bill prohibit any changes to federal jurisdiction under the Clean Water Act and to the definition of “fill material” and “discharge of fill material” for the purposes of the Clean Water Act, and restricts the application of the Clean Water Act in certain agricultural areas, including farm ponds and irrigation ditches. Democrats objected to this last provision, but their effort to remove the rider was defeated on a 32 to 18 vote. The bill also includes language allowing the possession of firearms on Corps of Engineers lands and prohibits new nuclear nonproliferation projects in Russia.

Bill Text:

http://appropriations.house.gov/UploadedFiles/BILLS-114HR-FC-AP-FY2017-AP00-EnergyWater.pdf

Report Language:

http://appropriations.house.gov/uploadedfiles/hrpt-114-hr-fy2017-energywater.pdf

Energy and Water Adopted Amendments:

http://appropriations.house.gov/uploadedfiles/hmtg-114-ap00-20160419-sd005.pdf

Legislative Branch

The House Legislative Branch Appropriations Subcommittee met this week and approved their $3.48B draft FY17 spending bill by voice vote.

The bill provides annual funding for the offices of Members of the House of Representatives, the support agencies of Congress, security and police forces, services for visitors, and Capitol operations and maintenance.

The total included for the House and joint operations, excluding Senate-only items, is $73M above the FY16 enacted level and $152 million below the President’s FY17 budget request. The Capitol Police received an increase of $16.3M above the FY16 enacted level, the Architect of the Capitol received an increase of $31M, the Library of Congress received an increase of $29M, and GAO received an increase of $2.1M.

The legislation also includes a provision to freeze the pay of Members of Congress, preventing any pay increases in FY17. A freeze on the salaries of Representatives has been in place since 2010.

Bill Text:

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

Senate

While the House isn’t likely to see any appropriations bills on the floor before May 15, the Senate started the appropriations process on the floor with its FY17 Energy and Water spending bill. This is the earliest ever start to appropriations work in the Senate. Senate Majority Leader Mitch McConnell (R-KY) said that he is prepared to devote up to 12 weeks of floor time for consideration of the 12 bills. After Energy and Water, Senate Leadership has hinted that Military Construction-Veterans Affairs or Commerce-Justice-Science might be considered next.

The process was kicked off with Senate Budget Committee Chairman Michael Enzi (R-WY) officially setting the discretionary spending limits for FY17 – $551B for defense and $518.5B for domestic programs. These are in line with the $1.07T budget agreement reached last year. Enzi’s action allowed the Senate to start floor consideration of the 12 annual spending bills. Enzi is also considering the possibility of overhauling the budget process this year. He is hopeful that he can produce a bipartisan plan next month that would create a process allowing two-year (biennial) budgets. Those opposing the effort are concerned about relinquishing Congress’ oversight role that gets played through the annual appropriations process. On the House side, House Budget Committee Chairman Tom Price (R-GA) said that he thinks that a new budget process will have to wait for a new president.

Senate Appropriators also began talking this week about a bipartisan emergency spending measure that would provide funding to combat the Zika virus. The President had requested $1.9B in February. Senate Appropriations Committee Chairman Thad Cochran (R-MS) expects that a supplemental funding measure will be offered to an appropriations bill on the Senate floor in the near future. How much funding will be provided is still in question as is to which bill it will be attached and whether or not any other funding requests (Flint, opioids, Middle East, etc.) will be attached.

Commerce-Justice-Science

The Senate Appropriations Committee marked up its FY17 Commerce-Justice-Science (CJS) spending bill in subcommittee and full committee this week. The $56.3B spending bill is $564M above the FY16 enacted level and $1.6B above the President’s FY17 budget request.

The bill contains $27.8B in discretionary funding for the Justice Department (an increase of $156M over FY16), $9.3B for the Commerce Department (an increase of $70.8M over FY16), $19.3B for NASA (an increase of $21M over FY16), $7.5B for the National Science Foundation (maintains FY16 level), $395M for the Legal Services Corporation (an increase of $10M over FY16), and $59.3M for the US Trade Representative (an increase of $4.9M over FY16).

Bill Text:

https://www.vantagepointstrat.com/govdoc20160421-172947-pdf/

Report Language:

https://www.vantagepointstrat.com/govdoc20160421-172951/

Energy and Water

The Senate began consideration of its $37.5B FY17 Energy and Water Appropriations bill on the Senate floor this week. Senate Energy and Water Appropriations Subcommittee Chairman Lamar Alexander expects to complete work on the bill next Tuesday.

Several amendments will be up for a vote next week including these three – one offered by Sens. Harry Reid (D-NV) and Dean Heller (R-NV) that would provide an additional $50M toward projects to increase water in Lake Mead, another offered by Sen. Jeff Flake (R-AZ) that would cut $69M from the Army Corps of Engineers’ construction account, and the last offered by Sens. Jeff Merkley (D-OR) and Chuck Grassley (R-IA) that would direct $95M to wind energy.

The Administration issued a Statement of Administration Policy providing their views on the Senate’s FY17 Energy and Water bill in which they objected to the funding levels for ARPA-E, energy R&D activities, and the Office of Energy Efficiency and Renewable Energy. They threatened a veto over these funding levels as well as other issues. The Office of Management and Budget’s Statement of Administration Policy can be found at:

https://www.whitehouse.gov/sites/default/files/omb/legislative/sap/114/saphr2028s_20160420.pdf

Senate FY17 Energy and Water Bill Text:

https://www.congress.gov/114/bills/s2804/BILLS-114s2804pcs.pdf

Senate FY17 Energy and Water Report Language:

https://www.congress.gov/114/crpt/srpt236/CRPT-114srpt236.pdf

Transportation Housing and Urban Development

The Senate Appropriations Committee marked up its FY17 Transportation, Housing and Urban Development, and Related Agencies (THUD) spending bill this week in subcommittee and full committee. The $56.474B bill is $827M below the FY16 enacted level and $2.9B below the President’s FY17 budget request. The bill provides $16.9B for the Department of Transportation ($1.7B below FY16) and $39.2B for Housing and Urban Development ($891M above FY16).

Bill Text:

https://www.vantagepointstrat.com/govdoc20160421-172949/

Report Language:

https://www.vantagepointstrat.com/govdoc20160421-172952/

Senate Appropriations Ranking Member Barbara Mikulski (D-MD) said this week that the she expected the appropriations subcommittees to officially receive their FY17 302(b) allocations on April 14. That is also when the first FY17 spending bill could be marked up in a Senate subcommittee. Sen. Lamar Alexander (R-TN) hinted that his appropriations bill could be up for consideration next week, and could be on the floor as soon as April 18. Senate Majority Leader Mitch McConnell (R-KY) said that the Senate would move forward on the FY17 spending bills by adhering to the $1.07T discretionary spending limit agreed to in last year’s bipartisan budget deal. Subcommittee chairmen including Military Construction-Veterans Affairs chairman Mark Kirk (R-IL), have indicated that they have received “working targets” but have declined to disclose the dollar figures. And while the Senate’s preferred path forward is one in which the House passes the spending bills and then they act on them, they are considering using four FY16 House-passed measures to get around the provision in the Constitution requiring the House to go first. These four measures would allow the Senate to bring their FY17 spending bills to the floor before the House does.

On the House side, the House Rules Committee is scheduled to hold a hearing next Thursday to consider changes to the appropriations process that could help them find a compromise and persuade fiscal conservatives to support a higher level of discretionary spending. The changes to Rule XXI could include a measure allowing appropriators to cut mandatory spending as conservatives are looking for a way to guarantee mandatory spending cuts in exchange for agreeing to higher discretionary spending.

At the Center for Strategic and International Studies (CSIS) this afternoon, U.S. Defense Secretary Ash Carter spoke about key long-term strategic management questions DOD is currently addressing. Since the Goldwater-Nichols Act was enacted 30 years ago this fall, the world has changed. Secretary Carter said, “It’s time that we consider practical updates to this critical organizational framework, while still preserving its spirit and intent.”

Last fall Secretary Carter ordered a comprehensive, department-wide review of organizational issues spanning the Office of the Secretary of Defense, the Joint Staff, the combatant commanders, and the military departments. The task force identified potential redundancies, inefficiencies, or other areas of possible improvement and provided preliminary recommendations to the Secretary. The four areas identified are:

1. Transregional and Transfunctional Integration and Advice

Background: The challenges the U.S. faces today are not likely to confine themselves to neat regional or functional boundaries (e.g. the fight against ISIL involves CENTCOM, EUCOM, AFRICOM, SOCOM, STRATCOM, and CYBERCOM). Our decision chain cuts across the combatant commands only at the Secretary of Defense level so we’re not as agile as we could be.

Recommendations: Clarify the role and authority of the Chairman of Joint Chiefs and the Joint Staff to A) help synchronize resources globally for daily operations around the world, enhancing our flexibility and ability to move forces rapidly across the seams between combatant commands; B) provide objective military advice for ongoing operations, not just future planning; and C) advise the Secretary of Defense on military strategy and operational plans.

2. Combatant Command Updates and Streamlining Headquarters

Background: The combatant commands need to be adapted to new functions including how they manage themselves in cyberspace, while DOD needs to continue to aggressively streamline headquarters.

Recommendations: DOD should consider changes to cyber’s role in DoD’s Unified Command Plan. And instead of combining commands (e.g. AFRICOM and EUCOM) to reach the goal of reducing management HQ by 25%, DOD should focus on integrating functions like logistics, intelligence, and plans across the Joint Staff, the combatant commands, and subordinate commands. Additionally, DOD will look to simplify and improve command and control by filling billets currently staffed by four-star generals and admirals instead with three-stars in the future.

3. Acquisition Reform

Background: There is more that we can and must do to deliver better military capability while making better use of the taxpayers’ dollars. Better Buying Power began 6 years ago and we’re now on our third iteration. While we’re seeing compelling indications of positive improvements, there’s still a constant need for improvement – particularly as technology, industry, and DOD’s own missions continue to change.

Recommendations: Involving the service chiefs more in acquisition decision-making and accountability. Streamlining the acquisition system including evaluating and, where appropriate, reducing other members of the Defense Acquisition Board. Reducing burdensome acquisition documentation requirements in a meaningful way. And pushing approval authority lower down when a program is on the right track eliminating redundant reviews and shortening review timelines.

4. Changes to Joint Personnel Management

Background: Secretary Carter started the Force of the Future endeavor last year to ensure the high quality of the future all-volunteer force even as generations change and job markets change. DOD has taken several steps already – building on-ramps and off-ramps so technical talent can more easily flow between DoD and America’s great innovative communities; opening all combat positions to women who meet service standards to expand our access to 100 percent of America’s population for our all-volunteer force; and doing more to support military families to improve retention, like extending maternity and paternity leave, and giving families the possibility of some geographic flexibility in return for additional commitments.

Recommendations: Change the requirements for joint duty assignments to broaden the definition of positions for which an officer can receive joint duty credit, going beyond planning and command-and-control to include joint experience in other operational functions, such as intelligence, fires, transportation and maneuver, protection, and sustainment, including joint acquisition. And shorten the amount of time required to accumulate joint duty, from three years to two years, so top personnel have more flexibility to take on command assignments and other opportunities to broaden and deepen their careers.

DOD will execute some of these decisions under their own existing authority, but where legislation is needed, they will work with the House and Senate Armed Services Committees as they consider their FY17 National Defense Authorizations. Secretary Carter said that DOD will be detailing and discussing these questions with congressional committees in the coming weeks.

The full text of the Secretary’s speech can be found at: http://www.defense.gov/News/Speeches/Speech-View/Article/713736/remarks-on-goldwater-nichols-at-30-an-agenda-for-updating-center-for-strategic

CBO Analysis of President’s FY17 Budget Request

The Congressional Budget Office (CBO) released its analysis of the President’s FY17 budget request this week. The analysis is based on CBO’s economic projections and estimating models, rather than on the Administration’s. And the estimates of the effects of the President’s tax proposals were prepared by the staff of the Joint Committee on Taxation (JCT).

In its analysis, CBO estimates that under the President’s proposals, the federal budget deficit would decline in FY17 and FY18. CBO projects the 10-year deficit would be $2.4T smaller under the President’s FY17 budget primarily as a result of higher tax revenue that Republicans oppose. After that, however, outlays would increase more quickly than revenues so deficits would grow as would federal debt levels. CBO’s projections are not as “rosy” as the White House projects as CBO’s are based on assumptions that all current tax and spending policies remain unchanged while the White House assumes positive economic effects from its budget proposal.

CBO Analysis:

https://www.cbo.gov/publication/51383