The House Appropriations Committee is proceeding with appropriations bills based on spending limits that the House Budget Committee is considering for the FY18 budget resolution. Appropriators marked up five FY18 appropriations bills this week based on those spending limits. However, as mentioned above, these spending limits will trigger sequestration without a new bipartisan deal removing the caps set by the 2011 Budget Control Act. Despite no agreement on the overall spending limits, Democrats on the House Appropriations Committee did agree to advance a few FY18 spending bills this week.

Agriculture

The Agriculture Appropriations subcommittee marked up its FY18 spending bill on Wednesday. The $144.9B FY18 Agriculture Appropriations bill is $8.5B less than what was appropriated in FY17, but $4.64B above President Trump’s FY18 budget request. Discretionary funding in the bill is $20B, which is $876M less than FY17 enacted levels. In addition to funding agricultural and food programs and services, the bill includes some policy provisions. One provision would allow schools demonstrating a financial hardship to seek an exemption from the whole grain nutrition standards. Another provision would prevent further implementation of sodium reduction standards. And a final provision would provide schools with flexibility in serving low-fat flavored milk.

FY18 Agriculture Appropriations Bill Text:

https://appropriations.house.gov/uploadedfiles/bills-115hr-sc-ap-fy2018-agriculture-agriculture.pdf

Summary:

https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394939 

Commerce, Justice, Science,

The Commerce, Justice, Science (CJS) Appropriations subcommittee marked up its FY18 spending bill on Thursday. The $54B CJS spending bill is $2.6B less than FY17 enacted funding levels, but $4.8B above the President’s FY18 budget request. The bill funds the Departments of Commerce at $29B, an increase of $349M over FY17 and includes provisions related to import applications on shotguns for sporting purposes, the importation of “curios and relics” firearms, the export of firearms to Canada, and a prohibition on “gun-walking” (i.e. the “Fast and Furious” operation). The bill makes these four provisions permanent law. The bill funds NASA at $19.9B, which is $219M above the FY17 enacted level. The Department of Commerce is funded at $8.3B, a reduction of $892M from FY17. And the National Science Foundation is funded at $7.3B, which is a $133M cut from FY17.

Other policy provisions included in the bill are a prohibition on the transfer or release of Guantanamo detainees into the U.S., a prohibition on unauthorized reporting and registration requirements on consumers purchasing multiple rifles or shotguns, a requirement for federal agencies to conduct supply chain reviews before procuring sensitive IT systems, a prohibition on NASA and OSTP from engaging in bilateral activities with China unless authorized, and a prevention of settlement money from going to activist groups by prohibiting DOJ from entering into civil settlement agreements in which the defendant is required to make a donation to a third party.

FY18 Commerce, Justice, Science Appropriations Bill Text:

https://appropriations.house.gov/uploadedfiles/bills-115hr-sc-ap-fy2018-cjs-commercejusticescience.pdf

Summary:

https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394951

Defense

The Defense Appropriations Subcommittee marked up its FY18 Defense spending bill in subcommittee on Monday evening and full committee on Thursday morning. The bill provides $658.1B for the Department of Defense. This includes $584.2B in discretionary funding (an increase of $68.1B from FY17 enacted levels and $18.4B above the President’s FY18 budget request) and $73.9B in Overseas Contingency Operations (OCO)/Global War on Terrorism (GWOT) funding. The additional OCO/GWOT funds are targeted towards higher troop levels, readiness efforts, and equipment recapitalization and modernization. This also includes additional training time, facilities and aircraft repairs, procurement of modernized equipment, and the research and development of new military capabilities. The bill fully funds a 2.4% pay increase for the military.

During the full committee markup, members approved an amendment offered by Rep. Barbara Lee (D-CA) that repeals the Authorization of the Use of Military Force (AUMF) that was enacted after 9/11. The House Foreign Affairs Committee later said that the amendment should have been ruled out of order as they believe it violates House rules. The final bill was passed out of full committee by voice vote.

FY18 Defense Appropriations Bill Text:

https://appropriations.house.gov/uploadedfiles/bills-115hr-sc-ap-fy2018-defense-defense.pdf

FY18 Defense Appropriations Report Language:

https://appropriations.house.gov/uploadedfiles/hrpt-115-hr.pdf

Summary:

https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394930

Energy & Water

The House Energy & Water Appropriations Subcommittee marked up their FY18 spending bill this week. The legislation provides annual funding for national defense nuclear weapons activities, the Army Corps of Engineers, various programs under the Department of Energy (DOE), and other related agencies.

The bill totals $37.56B– $209M below the FY17 enacted level and $3.65B above the President’s budget request. The bill provides $13.9B for DOE’s nuclear weapons security programs, a $976M increase above FY17. The Army Corps of Engineers is funded at $6.16B, an increase of $120M above FY17 and $1.16B above the President’s budget request. Included in the legislation is $6.4B for environmental management activities, $24.6M below FY17. Funding for energy programs within DOE is $9.6B– a decrease of $1.7B below FY17 and $2.3B above the President’s request. Science research is funded at $5.4B – the same as the FY17 enacted level. The bill continues congressional efforts to support the Yucca Mountain nuclear repository, providing $90M for the Nuclear Waste Disposal program, $30M for Defense Nuclear Waste Disposal, and $30M for the Nuclear Regulatory Commission to continue the adjudication of DOE’s Yucca Mountain License application. The bill also includes some policy provisions that would authorize the EPA Administrator and the Secretary of the Army to withdraw from the Waters of the United States rule, restrict the application of the Clean Water Act in certain agricultural areas, allow for the possession of firearms on Corps of Engineers lands, and prohibit new nuclear nonproliferation projects in Russia without certain notifications from the Secretary of Energy.

FY18 Energy & Water Appropriations Bill Text:

https://appropriations.house.gov/uploadedfiles/bills-115hr-sc-ap-fy2018-energywater-energyandwater.pdf

Summary:

https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394941

Legislative Branch

The House Appropriations Committee marked up their FY18 Legislative Branch Appropriations bill on Thursday and reported it out of full committee 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 $3.58B. This is $100M above FY17 and $228M below the President’s request. Additional funding is included to increase security for Members of Congress, staff, and their constituents in the wake of the shooting at the Congressional baseball team practice this month. The legislation also includes a provision to freeze the pay of Members of Congress, preventing any pay increases in fiscal year 2018. A freeze on the salaries of representatives has been in place since 2010. The bill also funds the Library of Congress at $648M (an increase of $16M above FY17) and the Government Accountability Office (GAO) at $568M (an increase of $450 thousand above FY17). The committee accepted an amendment offered by Rep. Barbara Lee (D-CA) that adds report language encouraging more training to avoid hiring bias in House offices.

FY18 Legislative Branch Bill Text:

http://docs.house.gov/meetings/AP/AP24/20170623/106178/BILLS-115-SC-AP-FY2018-LegBranch.pdf

FY18 Legislative Branch Report Language:

https://appropriations.house.gov/uploadedfiles/leg_report.pdf

Summary

https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394925

House Proposes Funding Levels for FY18 Budget Resolution

The House Budget Committee was planning to mark up their FY18 budget resolution next week, but nothing has been scheduled yet. Republican members of the committee have apparently agreed on topline spending levels of $621.5B for defense and $511B for non-defense plus $65B in Overseas Contingency Operations (OCO) funding. These funding levels are $72.5B above the FY18 defense discretionary cap of $549B (and $18.5B more than President Trump requested in his FY18 budget) and $5B below the non-defense discretionary cap of $516B (but $32B more than President Trump requested in his FY18 budget). Raising the defense level above the statutory cap will require a bipartisan budget deal with Democrats to change the law in order to avoid sequestration. The FY18 budget resolution will also include reconciliation instructions requiring a minimum of $150B in savings over 10 years from entitlement programs. The reconciliation bill will be the vehicle for tax reform.

Republican Study Committee (RSC) Chairman Mark Walker (R-NC) said his group officially supports these topline spending levels, but is calling for $200B in mandatory spending savings in reconciliation instructions. If GOP members cannot agree on an FY18 budget resolution, the House might need to pass a deeming resolution to set topline discretionary spending levels.

House Continues Marking Up FY18 Appropriations Bills

While the House GOP conference meeting this morning did not finalize topline spending level decisions for an FY18 budget resolution nor an appropriations strategy, House Appropriators are moving forward with marking up their FY18 spending bills to a nondefense topline spending level of $511B. Defense hawks want additional funding for military spending ($640B), so the topline defense spending level is not settled yet for appropriators.

House Appropriators are working to get most of their FY18 spending bills done by mid-July. House leaders will then have to decide how to package the bills for floor votes – one omnibus with all 12 bills or several “minibuses.” Former House Appropriations Chairman Hal Rogers (R-KY) said that he doesn’t believe a summer omnibus spending bill is possible given the time limitations. The House is scheduled to be in session four more weeks before the start of the August recess, so they would have to post an omnibus bill in about three weeks in order to be considered on the House floor their final week of session.

Legislative Branch Appropriations Bill

The House continued the FY18 appropriations process this week by marking up their Legislative Branch spending bill. The bill provides 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 $3.58B. This is $100 million above the FY17 level and $228 million below the President’s request. Additional funding is included to increase security for Members of Congress, staff, and their constituents in the wake of the shooting at the Congressional baseball team practice this month. The legislation also includes a provision to freeze the pay of Members of Congress, preventing any pay increases in FY18. A freeze on the salaries of representatives has been in place since 2010. The bill was approved by the subcommittee by voice vote and no amendments were offered.

Bill Text:

http://docs.house.gov/meetings/AP/AP24/20170623/106178/BILLS-115-SC-AP-FY2018-LegBranch.pdf

The House has three markups on the schedule for next week: Defense (Monday 7:00 PM), Agriculture (Wednesday 10:00 AM), and Energy & Water (Wednesday 11:00 AM).

The House Appropriations Committee marked up and reported out their first FY18 spending bill this week and agreed to the interim 302(b) suballocation for the Military Construction-Veterans Affairs (MilCon-VA) spending bill. Instead of agreeing to 302(b) allocations for all 12 spending bills, the committee intends to bring up one bill at a time with an “interim” allocation that is an estimate of what might be available once a budget resolution is passed. The interim allocation for the MilCon-VA bill was approved on a party-line vote of 29 to 22.

The $88.8B FY18 MilCon-VA spending bill was passed by unanimous voice vote after the committee accepted a manager’s package and an amendment offered by Rep. Debbie Wasserman Schultz (D-FL) that eliminates the waiver process for the hiring freeze for hiring of additional counselors for the 24-hour Veteran Crisis Line (VCL). The committee rejected an amendment offered by Rep. Barbara Lee (D-CA) that would have prohibited the use of funds to establish the White House Veterans Complaint Hotline. Lee thought the new hotline was redundant. Rep. Marcy Kaptur (D-OH) questioned the appropriateness of funding for this initiative to be in the MilCon-VA bill since it is a White House function. Lee’s amendment failed by voice vote.

The bill includes $2.1B more than FY17 funding levels for military construction and $5.3B more than FY17 funding levels for the Department of Veterans Affairs. The bill is $573M less than the President’s FY18 budget request.

FY18 MilCon-VA Bill Text:

https://appropriations.house.gov/uploadedfiles/bills-115hr-sc-ap-fy2018-milcon-subcommitteedraft.pdf

FY18 MilCon-VA Report Language:

https://appropriations.house.gov/uploadedfiles/hrpt-115-hr-fy2018-milcon.pdf

FY18 MilCon-VA Summary:

https://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394909

On the Senate side, Senate Majority Leader Mitch McConnell (R-KY) instructed appropriators to rely on spending limits from FY17 as they write their bills for FY18. McConnell said that these levels would then be adjusted once they reach a budget agreement. If no new budget deal is reached, they will be bound by the discretionary spending caps in the 2011 Budget Control Act.

While appropriators haven’t let the lack of an FY18 budget resolution stop them from doing their work, the timeline for getting one passed has been further delayed. The House Budget Committee this week postponed a markup of an FY18 budget resolution that was tentatively scheduled for next week.

The House Appropriations Committee scheduled its first markup of an FY18 appropriations bill for next week. The FY18 Military Construction-Veterans Affairs (MilCon-VA) spending bill will be marked up in subcommittee on Monday, June 12 at 7:00 pm. The MilCon-VA bill is traditionally the easiest of the 12 spending bills to pass through Congress. The text of the FY18 MilCon-VA bill should be posted online Sunday evening. House Commerce-Justice-Science Appropriations Subcommittee Chairman John Culberson (R-TX) said that his bill is currently being drafted and will be marked up soon.

The House and Senate have not produced an FY18 budget resolution yet, which usually sets the overall topline spending level that appropriators then use to determine their subcommittee allocations. The 2011 Budget Control Act set an overall cap on discretionary spending of $1.065T for FY18. This is $5B less than what was appropriated in FY17. Many Republicans and Democrats consider this spending level to be too low, but changing those levels will require an FY18 budget agreement. The House and Senate Budget Committees are expected to begin work on their own budget resolutions in the coming weeks, but it’s not clear when those measures will go to the floor for consideration and then get reconciled into a compromise version. The Senate Budget Committee has a hearing scheduled for next week with Treasury Secretary Steven Mnuchin on the President’s FY18 budget request.

House Republicans are interested in passing a 12-bill omnibus measure by the August recess. The bills still need to be marked up in their respective subcommittees and then full committee before being compiled into an omnibus for consideration on the House floor. With the House scheduled to be in session only 27 more days before the August recess, appropriators will have to act quickly. Some House members have suggested working on weekends to get their bills done. And the House Freedom Caucus suggested to Republican Leadership that they cancel the August recess to continue to work on tax reform and FY18 appropriations.

While new administrations have been held captive to a 100-day agenda timeline, in January of this year House Speaker Paul D. Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) laid out an ambitious 200-day agenda for Congress. When the 100-day mark of President Trump’s term came around in April, the Republican leaders reiterated that they were more focused on their 200-day agenda. The agenda the Republican leaders outlined in January included some specific timelines:

• Pass repeal and replace legislation for Obamacare and send it to President Trump by early April
• Pass a defense and border wall supplemental funding bill by April
• Pass an infrastructure bill by early summer
• Complete a tax overhaul and revamp of the IRS by August

The 200-day mark falls on August 7^th. When Congress returns next week, the House is scheduled to be in session 31 days before the August recess while the Senate is scheduled to be in session 35 days. Here’s what House and Senate Republicans want to accomplish during those seven weeks, as well as the hurdles they will potentially face.

Repealing and Replacing “Obamacare”

Republicans are trying to repeal and replace the Affordable Care Act otherwise known as “Obamacare;” and they are trying to do this without Democratic votes. But divisions within their own party aren’t making it easy.

The House passed its bill to repeal and replace the 2010 health care law on May 4. Senate leadership staff met this week with Senate staff on three committees to begin drafting the Senate bill, as they do not plan on taking up the House-passed measure. A discussion draft may be available as early as next week. Their goal is to finish work on their bill by the August recess.

They need to move quickly because they are using FY17 budget reconciliation instructions, which allow them to pass the bill by a simple majority vote in the Senate and avoid a Democratic filibuster. But it’s unclear how long the FY17 reconciliation vehicle will last. The Senate parliamentarian has not yet ruled if reconciliation instructions expire at the end of the fiscal year on September 30. And the Senate wants to get moving on an FY18 budget resolution with reconciliation instructions to move a tax reform bill. The House and Senate will have to complete a final conferenced health care repeal and replace bill before they can complete the conference on an FY18 budget resolution.

FY18 Budget Resolution

The House and Senate want to pass an FY18 budget resolution for a number of reasons. First, this year sequestration cuts set by the 2011 Budget Control Act are back in effect. Congress will have to decide if they want to offset those in some ways in order to raise the defense and nondefense spending caps for FY18. Second, as mentioned above, Republicans want to include reconciliation instructions for tax reform in an FY18 budget resolution. Reconciliation allows the Senate to consider a measure through special budget rules that only require a simple majority for passage and don’t allow for a filibuster by the minority party. Finally, Republicans criticized Democrats when they controlled Congress for going years without adopting a budget. Then they were unable to adopt a budget resolution in FY17 when they controlled both the House and Senate. While they didn’t suffer at the polls because of this, they would like to avoid giving Democrats opposition talking points. The House plans to unveil its FY18 budget plans in mid-June and hopes to pass a resolution before the July 4^th recess. The House is likely to have an easier time with a budget resolution than the Senate.

Tax Reform

Republicans want to reform the tax code for the first time in decades, but they are trying to do it without support from Democrats. They need the FY18 budget resolution’s reconciliation instructions to do this, but they can’t do that until they finish repealing and replacing “Obamacare.” While tax reform is a ways off in either chamber, Republicans are eager to show some progress. Speaker Ryan is still pushing a border adjustment tax that would tax imports and exempt exports, but that proposal is facing opposition from conservative groups, retailers, and fellow Republicans. Republicans need to find a way to pay for their tax reform proposal if they don’t want to add to the deficit. Without the border adjustment tax, they will have to find a pay for to offset the tax rate cuts that Republicans want included in their tax reform measure.

Raising the Debt Limit

Last week the Trump administration informed Congress that they would have to approve a debt ceiling increase sooner than expected. The Treasury Department said it needs to be raised before the August recess. While Treasury Secretary Steve Mnuchin said they wanted a “clean” debt ceiling hike with no strings attached, OMB Director Mick Mulvaney contradicted Mnuchin saying that he favors attaching spending reforms to any increase in the federal debt ceiling. Mulvaney said that Mnuchin’s comments did not necessarily represent the position of the administration.

Conservative groups want to tie spending cuts to a debt ceiling bill and have discussed several options:

• Pairing a debt limit increase with prioritizing the payment of interest in case the debt limit is not raised.
• A balanced budget amendment.
• Caps on mandatory spending.
• Extending the sequester.
• Adding work requirements to government assistance programs.
• Matching any debt limit increase with spending cuts, as was done with the 2011 deficit reduction law.

Republicans will probably need Democrats’ support to pass a clean measure. However, Senate Democrats may push for their own concessions (health care or FY18 spending caps) if their votes will be needed to avoid a government default.

FY18 Appropriations Bills

Congress is behind schedule on the FY18 appropriations process, and there is little time for them to pass each of the 12 spending bills separately on the House and Senate floors given their other priorities. In order to avoid a government shutdown on October 1, Rep. Tom Graves (R-GA) raised the possibility of the House approving an omnibus appropriations bill before the August recess. Republicans will likely need Democrats support to pass the FY18 spending bills. And while President Trump called for a “good shutdown” to fix the “mess” in Washington, Republicans in Congress want to avoid a shutdown.

This ambitious summer agenda means that an infrastructure investment bill will be delayed. But moving up the debt ceiling debate and FY18 spending bills from the fall to this summer could free up some time later this year for transportation issues. The White House is expected to release details on their infrastructure plan next week. One transportation issue that will definitely get attention this fall is the FAA reauthorization bill, which Congress has to pass or extend before it expires on September 30.