July 18, 2014
The House passed HR 5021, the Highway and Transportation Funding Act of 2014; HR 5016, the FY2015 Financial Services Appropriations bill; HR 4719, the Fighting Hunger Incentive Act of 2014; and HR 3086, the Permanent Internet Tax Freedom Act barring the government from taxing users for access to the Internet and ending taxes in seven states that were grandfathered in the initial moratorium. The Senate confirmed Cheryl LaFleur and Norman Bay to serve as members of the Federal Energy Regulatory Commission, David Shear to be an Assistant Secretary of Defense for Asian and Pacific Security Affairs, David Mader to be Controller in the Office of Federal Financial Management at OMB, and Paul Jaenichen to be Administrator of the Maritime Administration. The Senate also passed S 517, the Unlocking Consumer Choice and Wireless Competition Act, which restores an exemption to the Digital Millennium Copyright Act (DMCA) permitting consumer users to “unlock” their cell phones when their contract expires, as well as S 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014. The Senate began consideration of the Protect Women’s Health From Corporate Interference Act (S 2578), but was unable to invoke cloture on the measure. The bill was a response to the Supreme Court’s Hobby Lobby decision and would have prevented employers from refusing to cover contraception, among other things, for employees and their dependents.
FY2015 Appropriations
House
House Floor – Financial Services
The FY15 Financial Services and General Government Appropriations bill was considered and passed on the House floor by a vote of 228 to 195 on July 16. The $20.2 billion measure is the seventh appropriations bill to pass the House this year, and is the first time since 2007 that the House has passed the bill as a stand-alone measure. House Speaker John Boehner (R-OH) noted that the House is more than halfway done with their FY15 bills while the Senate has not passed any. The White House responded to the bill’s passage with a veto threat in a Statement of Administration policy, objecting to steep cuts to the Internal Revenue Service (IRS), reductions in financial regulatory oversight, and policy riders aimed at the District of Columbia, including limiting abortion, decriminalizing marijuana. and enforcing a handgun ban. One notable amendment offered by Rep. Denny Heck (D-WA) would prohibit the use of funds to penalize financial institutions in specified states that provide financial services to manufacturers, producers or persons who handle marijuana/marijuana products in states where it is legal. The amendment passed by a vote of 231 to 192.
Interior
The House Appropriations full committee marked up and reported out of committee its $30.2 billion FY15 Interior and Environment spending bill. The committee approved the bill by a vote of 29 to 19. The bill provides $4.1 billion to prevent and fight wildfires, including $470 million for the Forest Service to cover the unexpected FY14 shortfall in suppression funding, but does not include the additional $615 million in emergency spending President Obama recently requested. It cuts funding for the EPA by 9% compared to FY14, funding the agency at $7.5 billion. During the markup, there were several attempts at removing language from the bill that would block the EPA from implementing several controversial regulations, including carbon pollution limits on new and existing power plants.
Senate
Defense
The Senate Appropriations Committee marked up their $489.6 billion FY15 Defense appropriations bill in subcommittee and full committee this week. The bill also provides $58.3 billion in emergency funding for the Overseas Contingency Operations (OCO) account. The bill was approved by voice vote on Thursday after the committee adopted a managers’ amendment as well as three amendments offered by Sens. Harkin (D-IA), Murkowski (R-AK), and Merkley (D-OR). The committee rejected (by a vote of 9 to 21) an amendment offered by Sen. Mark Pryor (D-AR) that would have struck a provision in bill to train and equip members of the Syrian Opposition Forces and redirected the funding to “more effective” counterterrorism efforts.
The bill blocks many of the cuts proposed by the Administration for FY15 and added funding to several programs including $1.3 billion for 12 E/A-18G Growler electronic attack aircraft, $848 million to refuel the USS George Washington aircraft carrier, $125 million to accelerate competition on the Evolved Expendable Launch Vehicle, and $250 million to continue production of the Army’s Family of Medium Tactical Vehicles. The bill also maintains operations of the A-10 “Warthog” attack jet fleet. To meet budget caps while funding these priorities as well as a 1% pay raise for the civilian workforce, the committee made cuts to 517 programs for a total savings of $11.7 billion.
The bill includes a provision that prohibits the DOD from awarding contracts to companies that seek to avoid paying taxes in the United States — a move that would affect nine “inverted” companies that currently do business with the department, as well as provisions urging the Defense secretary to “reassess the value of an alternate engine program” following a June 23 engine fire that led to the temporary grounding of the entire F-35 fleet. The report also recommends the Pentagon conduct an independent cost analysis of Army’s controversial aviation restructuring plan, which the service believes will save $11.9 billion.
The National Security Agency would be required to prepare an unclassified report on all NSA bulk collection activities, including when such activities began, the cost of such activities, what types of records have been collected in the past, what types of records are currently being collected, and any plans for future bulk collection.Another unclassified report is required to provide “a list of terrorist activities that were disrupted, in whole or in part, with the aid of information obtained through NSA’s telephone metadata program.”
Cybersecurity funding was increased in the bill over the $8.63 billion requested by the administration, including $7.5 million for NSA cyber programs, $10 million for insider threat detection in the Defense Department, $7.5 million to support classified cyber-related research by the National Centers of Academic Excellence in Information Assurance Research, and personnel increases for intelligence and cyber mission areas. The bill also gives the Defense Department six months to produce a report on cyber training throughout the military.
The bill adds $25 million each for the Army, Navy and Air Force for alternative energy research that is contributing to reduced emissions, and encourages DoD to continue aggressively planning for the effects of climate change, particularly in regard to the Arctic, adding $5 million to Arctic Domain Awareness programs at DARPA.
A copy of the Senate FY15 Defense Appropriations Report can be found at:
https://www.vantagepointstrat.com/?p=235
Emergency Supplemental Request
The White House submitted a $3.7 billion emergency supplemental spending request to Congress last week, which included $1.1 billion for Immigration and Customs Enforcement, $433 million for Customs and Border Protection, $64 million for the Department of Justice for additional immigration judge teams, $300 million for the State Department and other international programs to support repatriation and reintegration efforts in Central America, and $1.8 billion for the Department of Health and Human Services to provide care for unaccompanied children. The question now is when will Congress pass an emergency spending measure. DHS Secretary Jeh Johnson warned last week that Immigration and Customs Enforcement will run out of money by mid-August and Customs and Border Protection will run out of funds by mid-September.
House Appropriations Chairman Hal Rogers (R-KY) said this week that the plan in the House is to move a single bill that provides both policy changes and supplemental funding. Republicans formed a working group tasked with making policy recommendations in response to the border crisis. Rep. Kay Granger (R-TX) chairs the task force and admitted this week that it is taking the group longer than anticipated to finalize their recommendations. The group is pushing for increased border security funding, the use of National Guard troops on the border, and the installation of more immigration judges to preside over deportation hearings and asylum requests. As for the funding, Appropriators are selecting parts of the President’s $3.7B request including funds for border security, humanitarian assistance and prevention. However, it is unclear how much funding would be allocated in the House bill, and whether or not the funding would be considered “emergency” funding not requiring an offset. There has been some discussion among House Republicans that the funding be less than half of what the President requested or around $1.5B, and that it only be for calendar year 2014.
On the Senate side, Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD) indicated that she would like to fully fund the White House’s $3.7 billion supplemental appropriations request and she rejected Republican calls to offset any supplemental spending with corresponding cuts to discretionary programs.
While House leaders hope to move forward before the August recess, given the differences between the two sides on their approaches, the prospects for each chamber passing legislation and then conferencing the differences before the August recess seems to be a tall order.
FY2015 Appropriations Bill Status
| Appropriations Subcommittee | House Action | Senate Action |
| Agriculture, Rural Development, FDA and Related Agencies | Subcommittee: May 20
Full Committee: May 29 Floor: postponed |
Subcommittee: May 20
Full Committee: May 22 Floor: postponed |
| Commerce, Justice, Science, and Related Agencies | Subcommittee: April 30
Full Committee: May 8 House Floor: May 29 |
Subcommittee: June 3
Full Committee: June 5 Floor: postponed |
| Defense | Subcommittee: May 30
Full Committee: June 10 Floor: June 20 |
Subcommittee: July 15
Full Committee: July 17 |
| Energy and Water Development, and Related Agencies | Subcommittee: June 10
Full Committee: June 18 House Floor: July 10 |
Subcommittee: June 17
Full Committee: postponed |
| Financial Services and General Government | Subcommittee: June 18
Full Committee: June 25 Floor: July 16 |
Subcommittee: June 24 |
| Homeland Security | Subcommittee: May 28
Full Committee: June 11 |
Subcommittee: June 24
Full Committee: June 26 |
| Interior | Subcommittee: July 9
Full Committee: July 15 |
|
| Labor, HHS, Education, and Related Agencies | Subcommittee: June 10
Full Committee: postponed |
|
| Legislative Branch | Subcommittee: April 3
Full Committee: April 9 Floor: May 1 |
Full Committee: June 19 |
| Military Construction, Veterans Affairs, and Related Agencies | Subcommittee: April 3
Full Committee: April 9 Floor: April 30 |
Subcommittee: May 20
Full Committee: May 22 |
| State, Foreign Operations, and Related Programs | Subcommittee: June 17
Full Committee: June 24 |
Subcommittee: June 17
Full Committee: June 19 |
| Transportation, HUD, and Related Agencies | Subcommittee: May 7
Full Committee: May 21 Floor: June 10 |
Subcommittee: June 3
Full Committee: June 5 Floor: postponed |
Defense
Department of Defense FY2014 Reprogramming Request
The Department of Defense (DOD) submitted a reprogramming request to Congress on July 10, seeking Congress’ approval for shifting $4.3 billion in FY14 funds to cover high priority programs. Some members of Congress, including Sen. John McCain (R-AZ) have criticized the request stating that DOD was initiating new programs that Congress has not endorsed. The request benefits several programs including $100 million for the Air Force’s Evolved Expendable Launch Vehicle program; $111 million to procure 21 UH-72 Lakota Light Utility Helicopters for Army pilot training; and $220 million to maintain Navy surface ships that have deployed longer than planned. The increases are offset by cuts elsewhere in the budget including a $66 million reduction in the CH-47 Chinook helicopter upgrade program and a $73 million cut in the Paladin artillery vehicle initiative. The Air Force also would spend $103 million less on aircraft spare parts. Both the House and Senate Appropriations committees as well as the House and Senate Armed Services committees must approve the request. A copy of the request can be found at:
https://www.vantagepointstrat.com/?p=234
Air Force HQ Organization Changes
Air Force leaders announced changes to their headquarters staff manning and organization this week, which include deactivating and realigning organizations at headquarters Air Force, major commands (MAJCOMs), numbered air forces, and field operating agencies.
The changes are expected to result in savings of $1.6 billion across the Air Force over the next five years. The efficiencies created through the reorganization will also help meet the Department of Defense’s directive to reduce costs and staff levels by at least 20%, eliminating 3,459 positions at headquarters across the Air Force, both in country and at overseas locations. As part of ongoing cost savings initiatives, the Air Force will also continue to reduce contract spending, operating budgets and travel expenditures.
To minimize the effect on civilian personnel, the Air Force is initiating Voluntary Early Retirement Authority programs and Voluntary Separation Incentive Pay to foster voluntary reductions before pursuing involuntary measures. Military members were also offered a variety of voluntary incentive programs.
The largest initiative will include centralizing policy and oversight of installation and mission support activities within a newly created Air Force Installation and Mission Support Center (AFIMSC), which will report to Air Force Materiel Command. Execution will remain at the local level. Support functions are currently spread across the MAJCOMs’ staffs. There will also be changes to the headquarters Air Force staff organization by splitting Operations, Plans and Requirements (A3/5) and Strategic Plans and Programs (A8) and reorganizing them into the new Operations (A3) organization, which will stand alone and merge the planning staffs into the new A5/8 organization. And, the current programming functions from A8 will be merged into the service’s financial management organization (FM). The Air Force will also realign several functions that currently report to the headquarters and realign some field operating agencies to operational MAJCOMs, merge Field Operation Agencies (FOAs) with similar missions and deactivate others. Finally, the Air Force Intelligence Surveillance and Reconnaissance Agency will be realigned from headquarters Air Force as a FOA to become part of a new operational numbered air force under Air Combat Command.
Cybersecurity
The Administration released new cross-agency priority goals on their Performance.gov website this week requiring agency chief information officers to focus on the 2015 priorities of information security continuous monitoring mitigation, strengthening anti-phishing and malware defenses, and improving authorization processes through personal identity verification (PIV).
A copy of the Administration’s Cross Agency Priority Goal: Cybersecurity FY2014 Q2 Status Update can be found at:
https://www.vantagepointstrat.com/?p=233
Political Updates
Secretary of State John Kerry chose Robert Papp as the first special representative to the Arctic region, part of a plan to prepare for the US to become chair of the Arctic Council in 2015. Papp retired in May as commandant of the Coast Guard. Secretary Kerry also named Alaska’s former lieutenant governor, Fran Ulmer, as a special adviser on Arctic science and policy. Ulmer chaired the US Arctic Research Commission during the Obama administration. The Arctic Council is made up of eight nations that reach into the Arctic Circle; the US touches the Arctic Circle in Alaska. The Arctic Council aims to protect the thawing region as its seas open to commercial shipping traffic.
EPA Deputy Administrator Bob Perciasepe announced this week that he is leaving his post in August to become president of the Center for Climate and Energy Solutions (C2ES). The post may not be filled quickly as EPA nominations usually incur a bit of scrutiny during the Senate confirmation process, even more so now in the wake of EPA’s controversial rule limiting carbon pollution from power plants. And if Republicans take control of the Senate next year, the position may never be filled.
President Obama nominated Joseph Nimmich to be Deputy Administrator of the Federal Emergency Management Agency (FEMA), Chip Fulghum to be Chief Financial Officer at the Department of Homeland Security, and Alissa Starzak to be General Counsel of the Department of the Army.
Next Week
The House will consider HR 3136, the Advancing Competency-Based Education Demonstration Project Act; HR 4984, the Empowering Students through Enhanced Financial Counseling Act; HR 3393, the Student and Family Tax Simplification Act; and HR 4935, the Child Tax Credit Improvement Act of 2014. The House may also consider legislation to address the growing crisis on the border as well as the reauthorization of the Terrorism Risk Insurance Act. The Senate may take up S 2609 the Marketplace and Internet Tax Fairness Act and S 5021, the Highway and Transportation Funding Act.