House

The House has marked up and reported out of committee four of its 12 FY20 annual spending bills, and is on track for reporting out another four by the end of next week.

Commerce Justice Science

The House Commerce Justice Science Appropriations subcommittee marked up its $73.9B FY20 spending bill today and reported it out of subcommittee by voice vote. The bill is an increase of $9.78B above FY19 enacted levels. It funds the Department of Commerce at $16.43B ($5.02B above FY19 and $3.96 above the President’s FY20 budget request), the Department of Justice at $32B ($1.07B above FY19), the National Aeronautics and Space Administration (NASA) at $22.32B ($815M above FY19), the National Science Foundation (NSF) at $8.64B ($561.14M above FY19), the Equal Employment Opportunity Commission at $399.5M ($20M above FY19), and the Legal Services Corporation at $550M ($135M above FY19). The bill does not include the additional funding requested by the administration for the NASA 2024 lunar landing. It does include a provision preventing the U.S. Census Bureau from asking about citizenship on the 2020 census questionnaire. The bill will be marked up in full committee next Wednesday.

FY20 Commerce Justice Science Bill Text

https://appropriations.house.gov/sites/democrats.appropriations.house.gov/files/FY2020%20CJS%20Sub%20Markup%20Draft.pdf

FY20 Commerce Justice Science Summary

https://appropriations.house.gov/news/press-releases/appropriations-committee-releases-fiscal-year-2020-commerce-justice-science

Defense

The House Defense Appropriations Subcommittee approved by voice vote its FY20 spending bill. In total, the bill provides $690.2B for the Department of Defense (DOD), an increase of $15.8B above the FY19 enacted level, and $8B below the President’s budget request. The bill also includes $68.1B in Overseas Contingency Operations (OCO) funding. The bill limits DOD’s ability to transfer funds between accounts, which is aimed at the Administration’s plans to move defense funds to pay for a wall on the southern border. It also blocks the sale of the F-35 fighter jet to Turkey. The bill will be marked up in full committee next Tuesday.

FY20 Defense Bill Text

https://docs.house.gov/meetings/AP/AP02/20190515/109491/BILLS-116–AP-FY2020-Defense.pdf

FY20 Defense Bill Summary

https://appropriations.house.gov/news/press-releases/appropriations-committee-releases-fiscal-year-2020-defense-funding-bill

Energy & Water

The House Energy & Water Appropriations Subcommittee approved by voice vote its FY20 bill. In total, the legislation invests $46.4B in Energy and Water Development programs, an increase of $1.8B from FY19. The bill provides $7.36B for the Army Corps of Engineers (an increase of $357M above FY19 and $2.53B above the FY20 PBR), $1.65B for the Department of the Interior/Bureau of Reclamation (an increase of $82.8M above FY19 level and $528M above the FY20 PBR), $37.1B for the Department of Energy (an increase of $1.4B above the FY19 level and $5.6 billion above the FY20 PBR), $130M for the Nuclear Regulatory Commission (which is $95K below the FY19 level), $170M for the Appalachian Regional Commission (an increase of $5M above the FY19 level and the FY20 PBR), and $22M Northern Border Regional Commission (an increase of 10% above the FY19 level and $21 million above the FY20 PBR). The bill will be marked up in full committee next Tuesday.

FY20 Energy & Water Bill Text

https://appropriations.house.gov/sites/democrats.appropriations.house.gov/files/FY2020%20E%26W%20Sub%20Markup%20Draft.pdf

FY20 Energy & Water Bill Summary

https://appropriations.house.gov/news/press-releases/appropriations-committee-releases-fiscal-year-2020-energy-and-water-funding-bill

Interior, Environment

The House Interior, Environment, and Related Agencies Appropriations Subcommittee approved by voice vote its FY20 bill. In total, the draft bill includes $37.28B, an increase of $1.73B over the FY19 enacted level and $7.24B over the President’s FY20 request. There is also an additional $2.25B of funding provided under the fire suppression cap adjustment. 

The bill provides $523.9M for Land and Water Conservation Fund ($85M above FY19 and $491M above the FY20 PBR), $5.21 billion for Wildland Fire Management ($1.6B above FY19 and $49M above the FY20 PBR), $13.79B for the Department of the Interior ($833M above FY19 and $2.41B above the FY20 PBR), $9.52B for the Environmental Protection Agency ($672M above FY19 and $3.42B above the FY20 PBR), $6.3 billion for the Indian Health Service (an increase of $537M above FY19 and $431M above the FY20 PBR), $167.5M each for the National Endowment for the Arts and the National Endowment for the Humanities, $1.07B for the Smithsonian Institution, $14M for the Woodrow Wilson International Center for Scholars, $43.5M for the John F. Kennedy Center for the Performing Arts, and $61M for the United States Holocaust Memorial Museum.

The bill will be marked up in full committee next Wednesday.

FY20 Interior Bill Text

https://appropriations.house.gov/sites/democrats.appropriations.house.gov/files/FY2020%20Interior%20Sub%20Markup%20Draft.pdf

FY20 Interior Bill Summary

https://appropriations.house.gov/news/press-releases/appropriations-committee-releases-fiscal-year-2020-interior-environment-funding

State Foreign Operations

The House Appropriations full committee approved its FY20 State, Foreign Operations, and Related Programs bill by a party-line vote of 29 to 23. In total, the bill provides $56.4B in base discretionary funding—$2.2B above the FY19 enacted level and $13.7B above the President’s FY20 budget request. The funding level includes $8B in OCO funding. The committee rejected the administration’s proposed steep cuts to diplomacy and foreign aid as well as several amendments on abortion, family planning, and climate change policies.

The following amendments to the bill were adopted by the full Committee:

• Rep. Lowey – The manager’s amendment makes technical and noncontroversial changes to the bill and report. The amendment was adopted by voice vote.
• Rep. Fortenberry #1 – The amendment includes new language supportive of conservation programs in Kenya. The amendment was adopted by voice vote.
• Rep. Stewart – The amendment strikes the permissive authority included in the bill to fund the Indo-Pacific Strategy and inserts a directive for $160 million to be made available for implementation of the strategy. The amendment was adopted by voice vote.

FY20 State Foreign Operations Bill Text

https://docs.house.gov/meetings/AP/AP04/20190510/109464/BILLS-116–AP-FY2020-StateForOp-FY2020DepartmentofStateForeignOperationsandRelatedProgramsSubcommitteeBill.pdf

FY20 State Foreign Operations Summary

https://appropriations.house.gov/news/press-releases/appropriations-committee-releases-fiscal-year-2020-state-and-foreign-operations

FY20 State Foreign Operations Report

https://docs.house.gov/meetings/AP/AP00/20190516/109499/HRPT-116-FY2020_SFOPS_Report.pdf

OMB Letter to House Appropriators re: FY20 State Foreign Ops Bill

https://www.whitehouse.gov/wp-content/uploads/2019/05/SFOp-Lowery.pdf

Senate

Senate Appropriations Committee Chairman Richard Shelby (R-AL) initially said he hoped to wait for a bipartisan agreement on new spending caps before advancing his bills. But with no such deal in sight, he said last week he hoped to begin marking up bills this summer if the Senate agrees to “deem” a topline number for discretionary spending, as the House did last month. The Senate may propose topline spending levels that keep discretionary spending flat with FY19 levels. And the Senate could begin marking up as early as June. Senate Homeland Security Appropriations Subcommittee Chairwoman Shelley Moore Capito said she heard that her subcommittee would mark up the third week of June. 

FY2020 Appropriations Bills Status

The House Appropriations Committee marked up their Labor HHS Education, Legislative Branch, and Military Construction-Veterans Affairs spending bills in full committee this week, and the State Foreign Operations spending bill in subcommittee. 

Labor HHS Education

The House Appropriations Committee approved the $189.876B FY20 Labor, Health and Human Services, Education, and Related Agencies bill and reported it out of committee by a vote of 30 to 23. The legislation includes funding for programs within the Departments of Labor, Health and Human Services, and Education, and other related agencies, including the Social Security Administration. The bill provides an increase of $11.8B over the FY19 enacted level and $48B over the President’s FY20 budget request.

The following amendments to the bill were adopted by the full Committee:

• Rep. DeLauro #1 – The manager’s amendment makes technical and noncontroversial changes to the bill and report. The amendment was adopted by voice vote.
• Rep. DeLauro #2 – The Chair’s amendment increases funding for several programs by allocating the remaining amount of funding available under the subcommittee allocation. It also includes several bill and report language provisions, including a general provision to maintain support for nonemergency medical transportation services for Medicaid beneficiaries who lack access to transportation to health care facilities. The amendment was adopted by voice vote.
• Rep. Harris #1 – The amendment directs the Secretary of Homeland Security on how to allocate H-2B visas. The amendment was adopted by voice vote.
• Rep. Graves – The amendment prohibits funds from being used to replace or diminish the quality of care provided by TRICARE or Medicare. The amendment was adopted by voice vote.
• Rep. Lee – The amendment prohibits funds from being used to finalize, implement, or enforce a new Trump Administration rule that allows medical professionals and health workers to deny care based on personal beliefs. The amendment was adopted on a vote of 30 to 23.
• Rep. Harris #3 – The amendment increases funding for the Strategic National Stockpile by $300 million using unobligated balances from the Children’s Health Insurance Program to pay for the increase. The amendment was adopted by voice vote.

FY20 Labor HHS Education Bill Text

FY20 Labor HHS Education Report

OMB Letter to House Chairwoman Lowey re: FY20 Labor HHS Bill

Legislative Branch

The House Appropriations Committee approved their $3.972B FY20 Legislative Branch bill and reported it out of committee by a vote of 28 to 22. The legislation funds the Legislative Branch of the U.S. government, including the U.S. House of Representatives, Congressional Budget Office, and Capitol Police. The bill appropriates $164M more than what was enacted in FY19. It also restarts the Office of Technology Assessment, boosts funding for intern compensation, and permits “Dreamers” to work on the Hill. In keeping with longstanding practice whereby each chamber of Congress determines its own housekeeping requirements and the other concurs without intervention, the House bill does not include funds for the Senate or for Senate office buildings.

FY20 Legislative Branch Bill Text

FY20 Legislative Branch Report

OMB Letter to House Chairwoman Lowey re: FY20 Legislative Branch Bill

Military Construction-Veterans Affairs

The House Appropriations Committee approved the $108.1B FY20 Military Construction, Veterans Affairs, and Related Agencies bill and reported it out of committee by a vote of 31 to 21. The legislation funds the Department of Defense, Department of Veterans Affairs, and other related agencies, including the American Battle Monuments Commission and Armed Forces Retirement Home. The bill provides $10.1 billion above the FY19 enacted level. The $108.1B funding level includes $921M in Overseas Contingency Operations (OCO) funding as well as $2B for emergency needs related to Hurricanes Michael and Florence at military bases in North Carolina and Florida.

The bill included bill text and report language barring President Trump from using military constructing money to fund his border wall. Rep. Andy Harris (R-MD) offered an amendment during the full committee markup to eliminate this provision. The amendment was defeated by a vote of 22 to 31. Rep. Judge Carter (R-TX) then offered an amendment to add $7.2B to the bill for border security. His amendment also was defeated by a vote of 21 to 31. This language is unlikely to survive in the Senate, and is specifically called out in Acting OMB Director Russell Vought’s letter to House Appropriations Committee Chairwoman Nita Lowey (D-NY). 

FY20 Military Construction-Veterans Affairs Bill Text

FY20 Military Construction-Veterans Affairs Report

OMB Letter to House Chairwoman Lowey re: FY20 MilCon-VA Bill

State Foreign Operations

The House Appropriations Subcommittee on State, Foreign Operations, and Related Programs approved its FY20 bill by voice vote. In total, the bill provides $56.4B in base discretionary funding—$2.2B above the FY19 enacted level and $13.7B above the President’s FY20 budget request. The funding level includes $8B in OCO funding. The committee rejected the administration’s proposed steep cuts to diplomacy and foreign aid. The bill next heads to the full Committee for markup.

FY20 State Foreign Operations Bill Text

FY2020 Appropriations Bills Status

The House kicked off the FY20 appropriations process this week and marked up three of their annual spending bills. All bills are expected to be marked up in the full committee next week. On the Senate side, Senate Appropriations Committee Chairman Richard Shelby (R-AL) said that he is waiting to see if congressional leaders can reach agreement on the spending caps before he starts marking up the FY20 spending bills.

Labor HHS Education

The House Labor HHS Education Appropriations Subcommittee marked up its FY20 spending bill this week and passed it out of subcommittee by voice vote that appeared to be along party lines. 

The bill provides $189.8B in discretionary funding; an increase of $11.7B over FY19 enacted levels and $47.8B over the President’s FY20 budget request. The Department of Labor is funded at $13.3B ($1.2B above FY19 and $2.4B above the President’s budget request), the Department of Health and Human Services is funded at $99.0B ($8.5B above FY19 and $20.9B above the President’s budget request), and the Department of Education is funded at $75.9B ($4.4B above FY19 and $11.9B above the President’s budget request). The bill also provides $1.14B for the Corporation for National and Community Service, $495M for the Corporation for Public Broadcasting, $257M for the Institute of Museum and Library Services, $342M for the National Labor Relations Board, and $13B for the Social Security Administration’s operating expenses.

Bill Text

Summary

Legislative Branch

The House Legislative Branch Appropriations Subcommittee marked up its FY20 spending bill in subcommittee this week and also approved it by a party line voice vote. 

The bill appropriates $3.943B for the legislative branch, $135M or 3.6% above FY19. In keeping with longstanding practice whereby each chamber of Congress determines its own requirements and the other concurs without intervention, the bill does not include funds for the Senate or for Senate office buildings. 

The bill includes an $11M funding increase to allow Congressional offices to pay their interns. It also restores the Office of Technology Assessment, which helps Congress understand the potential and the risks of technology developments and the policy options for addressing issues those developments raise. The bill also includes funding for the Government Accountability Office (GAO) (a $26M increase), the Architect of the Capitol (a $26M decrease), the Capitol Police (a $7M increase), and the Library of Congress (a $24M increase). Finally, the bill includes language permitting the Legislative Branch agencies to employ “Dreamers” – residents of the U.S. brought to the U.S. as children without proper immigration status – who hold employment authorization under the DACA program.

Bill Text

Summary

Military Construction-Veterans Affairs

The House Military Construction-Veterans Affairs (MilCon-VA) Appropriations Subcommittee marked up its FY20 funding bill this week and approved it by voice vote (mostly along party line votes as Ranking Member Granger voted no, but Rep. Carter voted yes). 

The bill funds the Department of Defense, Department of Veterans Affairs, and other related agencies, including the American Battle Monuments Commission and Armed Forces Retirement Home. In total, the legislation provides $108.1B in discretionary funding – $10B above the FY19 enacted level. This includes $921M in Overseas Contingency Operations (OCO) funding as well as $2B for emergency needs related to Hurricanes Michael and Florence at military bases in North Carolina and Florida.

Within this total, discretionary funding for the Department of Veterans Affairs (VA) is increased by $7.8B (9%) over the FY19 enacted level, including funding to increase access to services for veterans, and to increase oversight and accountability within the department. Funding for military construction is 

Bill Text

Summary

FY2020 Appropriations Bills Status

The House Appropriations Committee will kick off its markups of FY20 spending bills next week with the Labor-HHS-Education and Legislative Branch measures all going before their respective subcommittees. The Labor-HHS-Education bill will be marked up in subcommittee April 30, and in full committee on May 8. The Military Construction-VA and Legislative Branch bills will be marked up in their respective subcommittees on May 1. The committee is expected to approve suballocations, known as 302(b)s, for the 12 spending bills at that May 8 full committee markup.

The Appropriations Committee also is looking at marking up the Defense bill soon, though no date has been set. Energy-Water also could be one of the first several bills to be marked up.

House Appropriations Chairwoman Nita Lowey (D-NY) is writing the bills to the $664B defense limit and $631B nondefense limit as the House adopted on April 9 an informal “deeming” resolution (H.Res. 293) that sets an overall discretionary topline of $1.295 trillion.

FY2020 Appropriations Bills Status

Earlier this week House Democrats on the Budget Committee released the text of their draft bill to raise the discretionary spending caps for FY20 and FY21 by $356B. The bill sets the FY20 defense spending cap at $733B and the non-defense spending at $639B for FY20. 

The House Budget Committee met on Wednesday and approved the bill by a vote of 19-17. All of the votes in favor of passage were from Democrats while three Democrats joined all 14 Republicans in voting against the measure. Reps. Ro Khanna (D-CA), Ilhan Omar (D-MN), and Pramila Jayapal (D-WA) all voted against the bill because it raises defense spending caps. The bill could be on the House floor next week, but it will have a tough time getting passed, and it isn’t likely to be considered by the Republican-controlled Senate. But it serves as a starting point for negotiations on raising the spending caps for FY20 and FY21.

U.S. Attorney General William Barr sent a letter to Congressional leaders on Sunday summarizing Special Counsel Robert Mueller’s findings. While the President described it as “total exoneration,” the AG’s summary is a little more complicated.

On May 17, 2017, Deputy Attorney General Rod Rosenstein appointed former FBI Director Robert Mueller as Special Counsel to conduct the investigation of any links and/or coordination between the Russian government and individuals associated with the Trump campaign, any matters that arose or may arise directly from the investigation, and any federal crimes committed in the course of, and with intent to interfere with, the Special Counsel’s investigation, such as perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses. (Special Counsel Order:https://www.justice.gov/opa/press-release/file/967231/download) 

During the investigation, Special Counsel Mueller indicted 34 people and three entities on 200 separate criminal charges. In February 2018, 13 Russian nationals and three Russian entities were charged with conspiring to defraud the United States and interfere with the 2016 presidential election. One of the entities was the Internet Research Agency, a Kremlin-linked company that engages in influence operations. In July 2018, Special Counsel Mueller indicted an additional 12 Russian intelligence officers for their role in the hacking of the Democratic National Committee, the Democratic Congressional Campaign Committee, and the Clinton campaign, and leaking of emails and documents. In addition to the Russian nationals and entities, the Special Counsel indicted the President’s campaign chairman (Paul Manafort) and his top deputy (Rick Gates), his campaign adviser and national security adviser (Ret. Lt. Gen. Michael Flynn), two other campaign advisers (Roger Stone and George Papadopoulos), his personal lawyer (Michael Cohen), a Dutch attorney (Alex Van Der Zwaan), a California man with no connection to the Trump campaign (Richard Pinedo), and a Russian woman living in the U.S. (Maria Butina).

Special Counsel Mueller delivered his final report to U.S. Attorney General Barr last Friday. AG Barr and Deputy AG Rosenstein spent the weekend reviewing the 300-page report and preparing a summary for Congress. 

The Special Counsel’s report was divided into two sections: the first was on Russian interference in the 2016 elections and the second was on the question of obstruction of justice. AG Barr summarized that the Special Counsel did not find evidence of conspiracy to the rigorous standards of the criminal law that anyone associated with the Trump campaign knowingly conspired with Russia’s efforts to influence the 2016 presidential campaign. 

On obstruction of justice, the Special Counsel did not draw a conclusion one way or the other. Instead, the report set out evidence on both sides and left it up to the AG to determine whether the conduct the Special Counsel described in the report constituted a crime. AG Barr and Deputy AG Rosenstein concluded from the report that there was not sufficient evidence to establish that the President committed an obstruction of justice offense. However, AG Barr noted that the Special Counsel wrote, “while this report does not conclude that the President committed a crime, it also does not exonerate him.” 

AG Barr indicated that more material from the report is forthcoming as it is his goal to release as much of it as possible. First DOJ must review what material in the report could be subject to Federal Rule of Criminal Procedure 6(e), which imposes restrictions on the use and disclosure of information relating to matters occurring before a grand jury. And Special Counsel Mueller referred several matters to other offices, including the U.S. Attorney for the Southern District ofNY, for further action. The AG must identify any information in the report that could impact those matters before releasing it to Congress or the public.

Attorney General Barr Letter to Congress re: Mueller Report

The President delivered the overview of his FY20 budget to Congress this week. The budget justification details for each agency will be made available next week. The President requested $750B in defense funding with $174B of that from Overseas Contingency Operations (OCO) and $543B in nondefense funding with an additional $24B in OCO for nondefense emergency spending. Assuming the very rosy economic scenarios of a 3.2% growth rate this year that are included in the budget request (CBO projects a 2.3% growth rate), deficits will gradually decline but will not be eliminated for 15 years. And the budget request assumes much steeper cuts in later years.

Now that the President’s FY20 budget request has been delivered to Congress, the House and Senate can begin the budget resolution process. House Democrats may forgo a vote on a budget resolution this year rather than divide their caucus over whether to push for an increase or decrease in military spending. The Progressive Caucus members may vote against a budget resolution with an increase in defense spending. House Budget Committee John Yarmuth (D-KY) said that if his committee marks up a budget resolution, then he expects it to go to the House floor for a vote. On the Senate side, Senate Budget Committee Chairman Mike Enzi (R-WY) said he has not received a commitment that the FY20 budget resolution he is writing will go to the Senate floor for a vote. Enzi is expected to write the Senate budget resolution to the stator caps proposed in the President’s budget request.

In the event that the House and Senate don’t pass FY20 budget resolutions, House and Senate leadership are discussing potentially agreeing on spending limits to allow the FY20 appropriations process to go forward. Senate Republicans will be under pressure from the White House to increase the overall defense spending while holding nondefense to the budgetary cap. Senate Appropriators may use FY19 toplines for defense and nondefense programs as a fallback for FY20 if an agreement isn’t reached before they begin consideration of their 12 annual spending bills.

The FY19 enacted levels for defense and nondefense spending (including OCO) were $716B and $620.6B, respectively.

Agriculture

The 2020 Budget requests $20.8 billion for USDA, a $3.6 billion or 15-percent decrease from the 2019 estimate (including changes in mandatory programs and receipts). 

Commerce

The Budget requests $12.2 billion for DOC, a $1.0 billion or a 9.3-percent increase from the 2019 estimate. 

Defense

The Budget requests $718 billion for DOD, a $33 billion or 5-percent increase from the 2019 enacted level. 

Education

The Budget requests $62.0 billion for the Department of Education, an $8.5 billion or 12.0-percent decrease compared to the 2019 enacted level (including cancellations of Pell Grant unobligated balances). Excluding cancellations, the Budget requests a program level of $64.0 billion for the Department of Education, a $7.1 billion or 10.0-percent decrease compared to the 2019 enacted level. 

Energy

The 2020 Budget requests $31.7 billion for DOE, an 11-percent decrease from the 2019 enacted level. 

Health and Human Services

The 2020 Budget requests $87.1 billion for HHS, a 12-percent decrease from the 2019 estimated level. The Budget proposes $1,248.8 billion in net mandatory health savings, reducing longer-term deficits. 

Homeland Security

The 2020 Budget requests $51.7 billion in discretionary appropriations for DHS, a $3.7 billion or 7.8-percent increase from the 2019 estimate (excluding 2019 amounts for Overseas Contingency Operations). 

Housing and Urban Development

The Budget requests $44.1 billion in gross discretionary funding for HUD, an $8.7 billion or 16.4-percent decrease from the 2019 estimate. 

Interior

The Budget requests $12.5 billion for DOI, a $2 billion or 14-percent decrease from the 2019 estimate (including 2019 changes in mandatory programs). 

Justice

The Budget requests $29.2 billion for the Department of Justice, a $698 million or 2-percent decrease from the 2019 estimate. The Budget targets funding increases to support public safety and national security while reducing or eliminating lower priority spending. 

Labor

The Budget requests $10.9 billion for DOL, a $1.2 billion or 9.7-percent decrease from the 2019 enacted level. 

State

The Budget requests $40.0 billion for the Department of State and USAID, a $12.3 billion or 23-percent decrease from the 2019 estimate. The Budget also requests $1.6 billion for Department of the Treasury international programs, approximately equal to the 2019 estimate. 

Transportation

The Budget requests $21.4 billion in discretionary budget authority for 2020, a $5.9 billion or 22-percent decrease from the 2019 discretionary estimate. The Budget also provides $62.2 billion in mandatory funds and obligation limitations. 

Treasury

The Budget also proposes a program integrity initiative to narrow the gap between taxes owed and taxes paid that is estimated to reduce the deficit by $33 billion over 10 years. 

Veterans Affairs

The Budget requests $93.1 billion for VA, a $6.5 billion or 7.5-percent increase from the 2019 enacted level. In addition, the Budget requests $87.6 billion in advance appropriations for VA medical care programs in 2021 to ensure the Department has sufficient resources to continue providing the premier services that veterans have earned. The request also includes new legislative authorities and $123.1 billion in mandatory budget authority, including $129.5 billion in 2021 advance appropriations for other critical veteran and survivor benefits. 

NASA

The Budget requests $21 billion for NASA, a $283 million or 1.4-percent increase from the 2019 estimate. 

House and Senate conferees for the FY19 Homeland Security appropriations conference met this week to begin their negotiations. Congress has two weeks left to pass a spending bill to avoid another partial shutdown. Senate conferees include Sens. Shelby (R-AL), Moore Capito (R-WV), Hoeven (R-ND), Blunt (R-MO), Leahy (D-VT), Durbin (D-IL), and Tester (D-MT). House conferees include: Reps. Lowey (D-NY), Roybal-Allard (D-CA), Price (D-NC), Lee (D-CA), Cuellar (D-TX), Aguilar (D-CA), Granger (R-TX), Fleischmann (R-TN), Graves (R-GA), and Palazzo (R-MS).

The conference committee is tasked with deciding a way forward on Homeland Security funding. Both sides expressed optimism about reaching a compromise, though there has been little budging in positions so far.

House Democrats released a list of their proposals for border security that they intend to advocate for in the conference committee. Their proposal indicated that they are willing to spend more on border security but that they don’t plan to use emergency funding to get around the budget caps for FY19. The Democrat proposal also made no mention of funding for new physical barriers or a wall. It also restricts where approved funding for barriers can be built. 

On the other side of the negotiating table, Senate Appropriations Committee Chairman Richard Shelby (R-AL), in his opening remarks on Wednesday, advocated for an approach that includes technology, infrastructure, personnel, and physical barriers. Shelby said that “Smart technology alone does not actually stop anyone from crossing into the U.S. illegally.”

There is still some discussion about making the deal bigger than just funding for border security. Senate Majority Leader Mitch McConnell (R-KY) said that he would have no concerns about conferees expanding the scope of the discussion if they need to get an agreement. The expanded scope could include the debt ceiling and FY20 and FY21 budget caps. Senate Finance Committee Chairman Grassley (R-IA) wants to attach a tax extenders package renewing 26 expired tax breaks to any final spending deal.Outside of the conference negotiation room, President Trump was tweeting that if the final agreement did not include funding for a wall or physical barrier that “they are [w]asting their time!” The President also said that there is a good chance that he will declare a national emergency at the southern border in order to use Department of Defense dollars for a wall. He may announce this emergency declaration during his State of the Union address Tuesday evening. 

The current continuing resolution (CR) funding seven of the 12 annual appropriations bills expires at midnight next Friday (December 21). If Congress and the White House cannot reach agreement before then, nine cabinet departments and several dozen smaller federal agencies will shutdown.

House Minority Leader Nancy Pelosi (D-CA) and Senate Minority Leader Chuck Schumer (D-NY) met with the President and Vice President earlier this week that was expected to be a private meeting negotiating the final spending bills. Instead, the President invited the press in to the Oval Office to cover the meeting. During that meeting the President said that he would be proud to shut down the government if Congress did not provide the funding he requested for the border wall.

There a few options Congress can consider to avoid a shutdown:

1. Pass a CR funding the seven bills through December 26
2. Pass a CR funding the seven bills through January 3 (the first day of the new Congress when Democrats will control the House)
3. Pass a CR funding the seven bills through early 2019 (January-March)
4. Pass a CR funding the seven bills for the rest of FY2019
5. Pass a “minibus” funding six bills and a year-long CR for the DHS bill
6. Pass a “minibus” funding all seven bills if agreement can be reached on how much funding should be appropriated for a border wall

The House does not return until Wednesday evening next week leaving only two days to pass something and prevent a partial shutdown of the federal government.

Only one more day to the midterm elections and knowing who will be in control of the House and Senate in the 116^thCongress. Most experts believe Democrats will win control of the House while Republicans will retain control of the Senate (and perhaps pick up a seat or two). Regardless of the outcome, Congress will return the week of November 12 and have a number of issues they will have to address during the lame duck session.

Below I’ve provided some information and analysis on what we can expect tomorrow, during the lame duck session, and in the next Congress.

2018 Mid-Term Elections

The 115^thCongress is comprised of 235 Republicans and 193 Democrats in the House, and 51 Republicans, 47 Democrats and 2 Independents in the Senate. There are 7 vacant seats in the House (5 were held by Republicans and 2 were held by Democrats). Most political experts are predicting Democrats will win 30 or more Republican-held seats in the House to win the majority (they need to win 23).

The AP is reporting that these are the races to watch (sorted by poll closing time):

7 pm ET

Kentucky-06   Barr (R) vs McGrath (D)

Virginia-07    Brat (R) vs Spanberger (D)

7:30 pm ET

NC-09              Harris (R) vs McReady (D)

Ohio-12          Balderson (R) vs O’Connor (D)

8:00 pm ET

Florida-27      Salazar (R) vs Shalala (D)

NJ-2                 Grossman (R) vs Van Drew (D)

NJ-3                 MacArthur (R) vs Kim (D)

NJ-11               Webber (R) vs Sherrill (D)

PA-01              Fitzpatrick (R) vs Wallace (D)

9:00 pm ET

Kansas-02      Watkins (R) vs Davis (D)

Minn-03         Paulsen (R) vs Phillips (D)

NM-02             Herrell (R) vs Torres Small (D)

NY-19              Faso (R) vs Delgado (D)

NY-22              Tenney (R) vs Brindisi (D)

10:00 pm ET

Iowa-04          King (R) vs Scholten (D)

11:00 pm ET

California-10Denham (R) vs Harder (D)

California-48Rohrbacher (R) vs Rouda (D)

WA-03             Herrera Beutler (R) vs Long (D)

While historical trends show the party of the president losing seats in the House during the midterm elections, this doesn’t necessarily hold true in the Senate. And turnout tomorrow will play a huge role. Right now we’re seeing record rates of early voting. Some experts predict Republicans in the Senate will pick up a seat or two.

Even though Republicans are expected to lose the majority in the House, the House Freedom Caucus is predicting that it will add a few new members to its roster. They expect to increase their roster of 35 members to 37-40 members. If Republicans lose seats in the midterms, but the Freedom Caucus increases its membership, it could have more influence in the House Republican Conference in the 116th Congress.

We may not know the results to all races tomorrow as there may be some races that are too close to call and may require a recount or some races may require a run-off.

In addition to changes in the House and Senate, the Executive Branch typically sees some changes/turnover after the midterm elections. A number of staff are expected to leave and join the President’s 2020 re-election campaign. And there are plenty of rumors circulating about members of the President’s cabinet that will exit after the midterm elections (Zinke, Sessions, Mattis, Ross).

Lame Duck Session

Congress returns the week of November 12 for one week of session prior to adjourning for the Thanksgiving week recess. They are currently scheduled to return the week of November 26 for three weeks before adjourning for the holidays. The House and Senate’s target adjournment dates are December 13 and December 14, respectively.

Leadership Elections

After the elections, newly elected members of Congress come to DC for orientation and leadership elections. Republicans in the House plan to hold their leadership elections on November 15, while Democrats said they would not hold their leadership elections before November 28.

House Republicans

Since House Speaker Paul D. Ryan (R-WI) is not running for reelection, House Republicans will need to select either a Speaker (if they retain the majority) or Minority Leader (if they lose the majority) for the 116^thCongress. House Majority Leader Kevin McCarthy (R-CA) is the frontrunner for Speaker, but he could face several challengers including House Majority Whip Steve Scalise (R-LA) and Rep. Jim Jordan (R-OH), co-founder of the House Freedom Caucus.  Chief Deputy Whip Patrick McHenry (R-NC) is expected to challenge Conference Chair Cathy McMorris Rodgers (R-WA) for majority whip, the number 3 post. Rep. Liz Cheney (R-WY) is running for House Republican Conference Chair. If Republicans are in the minority, the most likely scenario is McCarthy as Minority Leader and Scalise as Minority Whip.

House Democrats

House Minority Leader Nancy Pelosi (D-CA) has made it clear to her caucus that she is seeking the Speakership if Democrats win control of the House. However, a few Democratic candidates have pledged to not vote for Pelosi for Speaker and the Congressional Black Caucus is saying that one of their members should be Speaker or Majority Leader. Election as Speaker of the House requires support from 218 Members of the House. Democrats will have to figure out how they can get the votes needed to elect a speaker in the 116^thCongress. House Minority Whip Steny Hoyer (D-MD) and Assistant Democratic Leader Jim Clyburn (D-SC) have also indicated interest in retaining leadership positions in the next Congress. Clyburn doesn’t intend to challenge Pelosi or Hoyer for their positions. If Democrats fail to win the majority in the House, expect to see several challengers emerge in the leadership elections.

Senate Republicans

Senate Majority Leader Mitch McConnell (R-KY) is expected to continue in his leadership position, but other positions will change due to conference-imposed term limits (3 full two-year terms, except Majority/Minority Leader). Majority Whip John Cornyn (R-TX) is term-limited and will step down. While Sen. John Thune (R-SD) is expected to replace him, Sens. John Barrasso (R-WY) and Roy Blunt (R-MO) may consider a run for the position or other leadership positions.

Senate Democrats

Senate Democrats do not have term limits. Their leadership is expected to remain the same in the next Congress. However, if Democrats lose more seats than anticipated, the caucus could challenge the existing leadership.

Lame Duck Agenda

There are a number of issues Congress must address in the four weeks they are scheduled to be in session after the midterm elections – FY19 appropriations bills, farm bill, tax extenders, National Flood Insurance Program, Violence Against Women Act, and Federal Insecticide, Fungicide, and Rodenticide Act.

The results of the midterm elections will have a significant impact on how the lame duck agenda plays out. If Democrats take over the House, Republicans could try to push through their agenda before they lose the majority. But they need 60 votes in the Senate and that will require support from Democrats in the Senate. It isn’t clear if Democrats would want to “clear the decks” before the new Congress or if they would want to postpone consideration of some legislation until they are in power (again, if they win the majority in the House).

Remaining FY19 Appropriations Bills

Congress has passed and the President has signed into law five of the 12 annual spending bills (Defense, Energy & Water, Labor HHS Education, Legislative Branch, and Military Construction-Veterans Affairs). The remaining seven FY19 appropriations bills (Agriculture, Commerce Justice Science, Financial Services, Homeland Security, Interior Environment, State Foreign Operations, and Transportation HUD) are funded by a continuing resolution (CR) through December 7.

President Trump and Congressional Republicans have been gearing up for a fight over funding for a border wall. The President has raised the possibility of a government shutdown if he does not get the funding he has requested for the wall. The Senate Homeland appropriations bill only has $1.6B for the wall compared to the House bill which includes $5B (the President’s FY19 requested amount). Democrats may also cause a shutdown if the spending bills are loaded up with conservative Republican priorities before they lose the majority. Or Democrats could force passage of another continuing resolution to carry funding into the new Congress. If Democrats fail to win the majority in the House, they could try to slow down the spending bills. But they would be in a politically weakened position, so negotiations on a spending deal could be faster under this scenario. There have been no serious discussions between Congress and the Administration during the recess on the remaining spending bills.

Congress may also consider a supplemental disaster aid spending package even though FEMA has indicated it has enough funding to cover those impacted by Hurricane Michael and Hurricane Florence.

Other Lame Duck Priorities

The Senate will take up the Coast Guard reauthorization bill when it returns. The National Flood Insurance Program expires on November 30, and the Violence Against Women Act and the Federal Insecticide, Fungicide, and Rodenticide Act both expire on December 7. All of these bills need to be reauthorized or extended. The 2018 Farm Bill is currently in conference and will be a priority during the lame duck session. The bill is being held up by a dispute over where the agriculture subsidies will go, but conferees are optimistic that they will be able to pass a full reauthorization before the end of this Congress. Congress may also consider a tax extenders and technical corrections package during the lame duck session. And Senate Majority Leader Mitch McConnell (R-KY) will continue to push to confirm as many nominees as possible. Already on deck is a cloture vote on a nominee for the Federal Reserve Board of Governors. Other possible items for consideration include criminal justice reform and retirement reform legislation (Retirement Enhancement and Savings Act or the Family Savings Act).

Select Committee on Budget and Appropriations Process Reform

The Bipartisan Budget Act of 2018 established the Joint Select Committee on Budget and Appropriations Process Reform. November 30 is the deadline for the select committee to present their recommendations. They are on track to release a bill during the next two weeks. Markup is scheduled for the week of November 13.

The bill is likely to be limited to a provision that would move Congress from an annual to a biennial budget resolution. However, the bill could become broader if amendments are added during the markup or if the co-chairs agree to technical changes before the bill is officially introduced. Potential amendments include changing the fiscal year to calendar year, eliminating the need for Congress to raise the debt limit, encouraging the packaging of the 12 annual spending bills, disallowing the use of filibuster-proof budget reconciliation procedures in the Senate for deficit-increasing legislation, restoring PAYGO rules in the House, and requiring the Appropriations committees to adopt a full set of committee allocations before subcommittees can advance their bills.

FY2020 Budget and Appropriations

In an October cabinet meeting, President Trump ordered his cabinet secretaries to cut 5% of their agencies’ budgets in FY2020. With just a few weeks left in the FY2020 budget planning process, the Pentagon has been advised by the Office of Management and Budget that the defense topline for FY2020 will be $700B, not the $733B they had originally been told to expect. Up until now, DOD has been preparing its budget assuming a $733B topline. DOD Comptroller David Norquist is reportedly continuing to develop two parallel budget documents to demonstrate to Defense Secretary Mattis the cuts they will have to make and the impacts those cuts will have.

FY2020 Budget Control Act Limits and Sequestration

The Budget Control Act (BCA) of 2011 was signed into law on August 2, 2011 and imposes annual statutory discretionary spending limits for defense and nondefense spending through FY2021. Since it was signed into law, Congress has modified the spending limits through the following bills: American Taxpayer Relief Act of 2012, the Bipartisan Budget Act of 2013, the Bipartisan Budget Act of 2015, and the Bipartisan Budget Act of 2018. None of these bills have changed the discretionary caps imposed by the BCA for FY2020 and FY2021. The statement that the “sequester is returning in FY2020,” therefore, means that the discretionary spending limits will again be the level prescribed by the BCA unless Congress modifies them by passing legislation. If the caps are not lifted and Congress passes FY2020 spending bills that don’t comply with the FY2020 caps, then across-the-board sequestration cuts will automatically kick in. Adherence to the budget caps will obviously mean less funding for numerous federal programs and tough decisions for Congress and the executive agencies as well as the White House Office of Management and Budget (OMB).

For FY2019, defense spending is $647B and nondefense $597B. For FY2020, defense spending under the BCA is capped at $576B and nondefense is capped at $542B.

Debt Ceiling

The debt ceiling has been lifted until March 1, 2019. If Congress does not raise the debt limit or suspend the ceiling before March 1, 2019 the Treasury Department will be forced to use extraordinary measures to prevent a default by the U.S. government. Extraordinary measures can give Congress several additional months to work out a debt ceiling agreement. The debt ceiling could be part of a broader negotiation on an FY2020/2021 budget agreement lifting BCA discretionary spending caps.

116^thCongress

If Republicans retain control of the House we can expect to see a continuation of their current priorities. Republicans on the House Ways and Means Committee just released a joint statement with the White House that they would push for the President’s proposed 10% middle class tax cut next year. If Democrats take over the House, they will focus on their “A Better Deal” priorities. They also want to pursue ethics and campaign finance reform, an infrastructure package, legislation to reduce the price of prescription drugs, gun safety measures, a legislative solution to protect participants in the Deferred Action for Childhood Arrivals (DACA) program, and preserving the Affordable Care Act. They will also pursue a wide-ranging oversight agenda (the administration, climate change, intelligence agencies).

Should Republicans retain control of the Senate, judicial confirmations will continue to be one of the top priorities of Majority Leader McConnell in the 116th Congress as he tries to confirm as many judges as possible before the 2020 presidential election. They may also have some cabinet member nominations to consider in the new Congress.

Finally, the administration will want to see action on their recently negotiated trade agreements. President Trump is expected to sign the United States-Mexico-Canada Agreement (USMCA) in November on the sidelines of the G-20 meeting – right at the end of Mexican President Pena Nieto’s term. That will not leave enough time for the current Congress to consider implementing legislation.