White House Office of Management and Budget (OMB) Acting Director Russell Vought sent a letter to Congress requesting additional federal resources to take steps to prepare for a potential worsening of the coronavirus situation in the United States. The administration requested $1.25B in emergency funding for the Public Health and Social Services Emergency Fund at the Department of Health and Human Services (HHS) to continue supporting critical response and preparedness activities. In addition, the administration requested that Congress permit the $535M in emergency supplemental funding appropriated in the FY20 Agriculture appropriations bill for the prevention and treatment of Ebola instead be used for COVID-19 response. Finally, the administration requested the ability for HHS to transfer funds to the Centers for Disease Control, the National Institutes of Health, the Food and Drug Administration, the Assistant Secretary for Preparedness and Response, and other components as necessary to carry out response activities.

The February 24 letter also stated that the President created a Coronavirus Task Force and appointed HHS Secretary Alex Azar as the lead on the task force. Two days later, the President held a press conference where he announced that Vice President Mike Pence would be in charge of the administration’s response to the coronavirus. Vice President Pence, in turn, appointed Ambassador Debbie Birx as the White House Coronavirus Response Coordinator. Birx serves as the U.S. government’s leader for combatting HIV/AIDS globally. She will also join the White House’s coronavirus task force led by Health and Human Services Secretary Alex Azar. Also on the task force are Steven Mnuchin, Secretary of the Treasury; Dr. Jerome Adams, Surgeon General of the United States; Larry Kudlow, Director of the National Economic Council; Robert O’Brien, Assistant to the President for National Security Affairs; Dr. Robert Redfield, Director of the Centers for Disease Control and Prevention; Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health; Deputy Secretary Stephen Biegun, Department of State; Ken Cuccinelli, Acting Deputy Secretary, Department of Homeland Security; Joel Szabat, Acting Under Secretary for Policy, Department of Transportation; Matthew Pottinger, Assistant to the President and Deputy National Security Advisor; Rob Blair, Assistant to the President and Senior Advisor to the Chief of Staff; Joseph Grogan, Assistant to the President and Director of the Domestic Policy Council; Christopher Liddell, Assistant to the President and Deputy Chief of Staff for Policy Coordination; and Derek Kan, Executive Associate Director, Office of Management and Budget.

Democrats criticized the request as falling short of what is really needed, and some Republicans also thought the administration’s plan may be insufficient. House Appropriations Chairwoman Nita Lowey (D-NY) said in a statement that the administration’s request was “woefully insufficient” and that her committee would “move quickly to enact a robust package that fully addresses this global emergency without allowing this administration to steal from other necessary programs.” Senate Minority Leader Chuck Schumer (D-NY) released an emergency funding bill totaling $8.5B. Senate Appropriations Committee Ranking Democrat Patrick Leahy (D-VT) expressed concern about the administration transferring COVID-19 emergency supplemental funds to other purposes, such as the southwest border wall.

The House most likely will vote on a funding plan to combat coronavirus the week of March 9. Bipartisan, bicameral meetings are happening now to work out the details of the supplemental funding bill. Senate and House appropriations leaders want bipartisan, bicameral agreement on coronavirus funding legislation by early next week. The measure will likely fall somewhere between $6-8 billion. Democrats are also pushing for provisions that will prevent the president from transferring these new funds to anything other than the coronavirus and fighting infectious diseases; ensure that vaccines for the coronavirus are affordable and available to all that need it; provide interest-free loans to small businesses that are impacted by the outbreak; and reimburse state and local governments for costs incurred while assisting the federal response to the coronavirus outbreak. The bill may skip committee consideration to go straight to the floor for a vote.

White House COVID-19 Funding Request Letter

https://www.whitehouse.gov/wp-content/uploads/2020/02/Coronavirus-Supplemental-Request-Letter-Final.pdf

Senate Democratic Leader Chuck Schumer’s Proposal

https://www.democrats.senate.gov/imo/media/doc/022620%20LEADER%20SCHUMER’S%20CORONAVIRUS%20REQUEST.pdf

This week White House Office of National Drug Control Policy (ONDCP) Director Jim Carroll released the National Interdiction Command and Control Plan (NICCP), which outlines the Trump Administration’s interdiction strategy to reduce the availability of illicit drugs in the United States. In conjunction with the recently released National Drug Control Strategy, the NICCP provides strategic guidance to relevant drug control agencies regarding interdiction efforts to disrupt Transnational Criminal Organizations that traffic drugs to the United States.

Additionally, the Administration released two counternarcotics strategies, outlining priorities in stopping the flow of drugs along both the Southwest and Northern borders.

The Southwest Border Counternarcotics Strategy aims to prevent drug trafficking along the almost 2,000-mile border that separates the United States and Mexico. The strategy specifically states, “To secure the SWB, the United States must continue to enhance interdiction and law enforcement capabilities at and between the ports of entry (POEs). The United States must bolster domain awareness through the employment of technologies, augmented by the fusion of investigative information and criminal intelligence to enable interdictions, facilitate criminal investigations, and achieve successful prosecutions” and “To deter effectively and reliably the trafficking of illegal drugs between Mexico and the United States, the Federal Government will implement a multi-layered deterrence capability consisting of manned and unmanned systems, physical and virtual barriers, and land and air-based sensors.” And with respect to tunnels and subterranean passages, the strategy calls for Federal agencies and departments to continue “to collaborate to develop ground-based sensors and other technology, thus enhancing domain awareness and cueing investigative and interdiction actions. Enhanced detection and monitoring of tunnel construction and use would enable law enforcement to identify unexplained voids; acoustic, gravitational, electronic, or seismic anomalies; subtle changes in ground moisture; or subsidence (sinking) for further investigation and tunnel discovery early in construction or use. Departments and agencies should continue their efforts to improve tunnel detection technology, including researching existing private sector capabilities and promising new methods. The use of horizontal directional-drilling equipment provides another opportunity for law enforcement.”

The Northern Border Counternarcotics Strategy aims to prevent the illegal trafficking of drugs across the United States-Canada border with regard to our 5,225-mile shared border – the longest in the world between two countries.

National Interdiction Command and Control Plan

https://www.whitehouse.gov/wp-content/uploads/2020/02/2020-National-Interdiction-Command-and-Control-Plan.pdf

National Drug Control Strategy

https://www.whitehouse.gov/wp-content/uploads/2020/02/2020-NDCS.pdf 

Southwest Border Counternarcotics Strategy

https://www.whitehouse.gov/wp-content/uploads/2020/02/2020-Southwest-Border-Counternarcotics-Strategy.pdf

Northern Border Counternarcotics Strategy

https://www.whitehouse.gov/wp-content/uploads/2020/02/2020-Northern-Border-Counternarcotics-Strategy.pdf

President Trump on Thursday renewed a state of emergency he declared on February 15, 2019 (Proclamation 9844), which he used to reprogram $6.1B in FY19 funds from the Department of Defense to his border wall. Last year’s declaration followed a five-week government shutdown and the President’s failure to convince Congress to fund his border wall at his requested amount. In the emergency declaration renewal this week, the President claimed that the “ongoing border security and humanitarian crisis at the southern border of the United States continues to threaten our national security.”

The Pentagon then sent to Congress an FY20 reprogramming request seeking to transfer $3.831B from weapons systems into the counter-drug account that the administration has used to build the border wall. The reprogramming request is split between regular budget ($2.202B) and overseas contingency operations account ($1.629B). All of the reprogrammed funds are from items that were specifically added by Congress (Republicans and Democrats) during the FY20 defense authorization and appropriations process. 

The $3.831B reprogramming request is as follows:

Army

• $100m from Army National Guard HMMWV Modernization
• $101m from Heavy Expanded Mobile Tactical Truck Ext Serv

Navy

• $223m would come out of the Navy’s F-35 Joint Strike Fighter program under contract to Lockheed Martin
• $155m would come out of the V-22 Osprey program, made by Boeing Co. and Textron Inc.
• $180m from Boeing’s P-8A Poseidon aircraft program
• Shipbuilding would lose $911m: $650m from a program to replace amphibious assault ship, LHA; and $261m from the Expeditionary Fast Transport program

Air Force

• The Air Force would lose $156m from F-35 advanced procurement funds and $196m from Lockheed’s C-130J transport aircraft
• The Observation Attack Replacement (OA-X) Light Attack Aircraft program would give up $180m
• From OCO: $169m would come out of the CH-130J and $160m from the MQ-9 drone program made by General Atomics

National Guard and Reserve Equipment

• $205m from miscellaneous equipment, Army Reserve
• $75m from miscellaneous equipment, Navy Reserve
• $25m from miscellaneous equipment, Marine Corps Reserve
• $205m from miscellaneous equipment, Air Force Reserve
• $395m from miscellaneous equipment, Army National Guard
• $395m from miscellaneous equipment, Air National Guard

In response to the reprogramming action, House Armed Services Committee Ranking Republican Mac Thornberry (R-TX) said, “Congress has the constitutional responsibility to determine how defense dollars are spent…The re-programming announced today is contrary to Congress’s constitutional authority, and I believe that it requires Congress to take action. I will be working with my colleagues to determine the appropriate steps to take.” And House Appropriations Committee Chairwoman Nita M. Lowey (D-NY) and Defense Appropriations Subcommittee Chairman Pete Visclosky (D-IN) said that the President is “disrespecting the separation of powers and endangering our security by raiding military resources to pay for his wasteful border wall.”

Rep. Visclosky sent a letter to Acting Under Secretary of Defense (Comptroller)/Chief Financial Officer Elaine McCusker saying that the House Appropriations Committee denied the Pentagon’s reprogramming request. However, appropriators also denied a similar $1B request in May 2019 that the administration ignored and moved the money anyway. Historically, administration officials have asked appropriators for permission before reprogramming funds, however it’s tradition and not a matter of law.

Department of Defense Reprogramming Notice

https://comptroller.defense.gov/Portals/45/Documents/execution/reprogramming/fy2020/reprogramming_action/20-01_RA_Support_for_DHS_Counter_Drug_Activity.pdf

President Trump’s Emergency Declaration Renewal

https://www.whitehouse.gov/briefings-statements/message-congress-continuation-national-emergency-respect-southern-border-united-states/

The Congressional Budget Office (CBO) regularly publishes reports that present projections of what federal deficits, debt, revenues, and spending would be for the current year and for the following 10 years and beyond if existing laws governing taxes and spending generally remained unchanged.

CBO released its most current report this week in which it projects a federal budget deficit of $1.02T in 2020 and averages $1.3T between 2021 and 2030. Projected deficits rise from 4.6% of GDP in 2020 to 5.4% of GDP in 2030. Over the past century, the deficit has not exceeded 4.0% of GDP for more than five consecutive years except for a six-year period during and after World War II. Over the past 50 years, deficits have averaged around 1.5% of GDP when the economy is relatively strong (as it is now). Because of the large deficits, federal debt held by the public is projected to grow, from 81% of GDP in 2020 to 98% in 2030. The report assumed that lawmakers will allow the 2017 tax cuts to expire, which means that in reality the deficit may be worse than projected if Congress extends the cuts, further reducing revenue.

The good news is that the economy is doing well and, in 2020, inflation-adjusted GDP is projected to grow by 2.2%. After 2020, economic growth is projected to slow. From 2021 to 2030, output is projected to grow at an average annual rate of 1.7%. That average growth rate of output is less than its long-term historical average, primarily because the labor force is expected to grow more slowly than it has in the past.

CBO Budget and Economic Outlook: 2020 to 2030

https://www.cbo.gov/publication/56020

CBO Press Briefing

https://www.cbo.gov/system/files/2020-01/56080-CBO-outlook-briefing.pdf