Congress returns on September 6 with only 17 days (House) and 23 days (Senate) of session scheduled before they adjourn for the November elections. While their “to do” list is long, they’re unlikely to accomplish much in September leaving it all until a lame-duck session after the November elections. And the election results in November will dictate much of the lame-duck agenda and strategy. Here are some of the key items on their “to do” list: 

1. FY17 Appropriations Bills

The House and Senate Appropriations Committees have reported out all of their FY17 spending bills, but the House has only passed five while the Senate has passed three. One bill, the FY17 Military Construction-Veterans Affairs appropriations bill was conferenced and passed the House, but failed to get cloture in the Senate stalling the process. While Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul D. Ryan (R-WI) made passing individual spending bills a top priority this year, the looming September 30 end of fiscal year deadline will require Congress to pass a continuing resolution (CR) until they can agree on an omnibus spending bill. Emergency funding for the Zika virus could be included in a CR. Fights over funding levels for certain agencies and the use of Overseas Contingency Operations (OCO) funding will push any omnibus agreement until after the election. While conservatives members of the House (Freedom Caucus) have been pushing for a year-long CR for FY17 (or a CR through March/April 2017) that is unlikely at this point. Most likely scenario is a CR through early December (December 9?) leaving time for Congress to cut a deal before the end of the 114^th Congress.

Subcommittee                   House                                       Senate

2. Supreme Court Confirmation

Justice Antonin Scalia’s death in February left a vacancy on the Supreme Court that has not yet been filled. On March 16, President Obama nominated Merrick Garland, Chief Judge of the United States Court of Appeals for the District of Columbia Circuit, to fill the vacancy. The Senate has not held confirmation hearings on Garland’s nomination to date and is not expected to do so during the September session. Whether or not the results of the November election will change the Senate’s posture on holding hearings and voting on his nomination before they adjourn for the 114^th Congress remains unclear.  

3. FY17 National Defense Authorization Act (NDAA)

The House passed their FY17 NDAA (HR 4909) on May 18 by a vote of 277 to 147. The Senate passed their bill (S 2943) on June 14 by a vote of 85 to 13. The House agreed to conference by voice vote on July 8 and the Senate followed on July 14 (vote of 90 to 7). The NDAA is considered must-pass legislation and has been enacted the past 54 years. The current authorization expires on September 30. Conferees need to work out differences over funding (House shifts $18B in OCO funds to the base budget), military health programs, LGBT provisions, requiring women to register for the draft, and restructuring acquisition management within the Department of Defense, among other things. While HASC and SASC staff have spent the summer recess hashing out the differences in the bill, a final conference package is not expected until after the election as conferees are unlikely to be able to work out funding level differences for the NDAA without a deal for the top-line budget.  

4. Energy Authorization

The Senate passed S 2012, the North American Energy Security and Infrastructure Act of 2016, on April 20 by voice vote. The House passed a modified S 2012 on May 25 by a vote of 241 to 178. The House had previously passed HR 8, the North American Energy Security and Infrastructure Act of 2015, last December by a vote of 249 to 174. Both the House and Senate have agreed to go to conference, but Senate Democrats held out until they received assurances that the provisions the President threatened to veto would be left out of the bill. Conferees are working out key points of contention including funding levels, length of the authorization, and issues such as language allowing FERC to impose deadlines on energy project-related environmental reviews. Several major provisions may require negotiations that could not be resolved after the election.

5. Veterans Authorization

The Senate Veterans Affairs Committee has reported out S 2921 the Veterans First Act (voice vote May 12) while the House has passed similar provisions as stand-alone measures (HR 677, HR 1338, HR 2256, HR 2915, HR 3016, and HR 4063). Senate Veterans Affairs Committee Chairman Johnny Isakson (R-GA) and Ranking Member Richard Blumenthal (D-CT) have sought a floor vote for their bill. While the Senate bill has widespread support, Sen. Marco Rubio (R-FL) and House Veterans Affairs Committee Chairman Jeff Miller (R-FL) told Isakson that the Senate bill does not do enough to discipline VA employees.

6. Commodity Futures Trading Commission Reauthorization

The Commodity Futures Trading Commission (CFTC) has operated without formal authorization since September 2013. The House passed HR 2289, the Commodity End-User Relief Act in June 2015 by a vote of 246 to 171. The Senate Agriculture Committee marked up and reported out of committee a similar bill, S 2917, in May of this year. But efforts to provide the CFTC with a new authorization appear to have stalled in the 114^th Congress.

7. Trade Agreements

At the top of the trade agenda is the TransPacific Partnership (TPP), which requires a vote in Congress to ratify. Both presidential candidates oppose TPP and House Speaker Ryan has said that there isn’t sufficient support for a vote. However, President Obama plans to mount a final push toward approval of TPP when Congress reconvenes in September and a vote could take place after the election. As for the TransAtlantic Trade and Investment Partnership (T-TIP) agreement, the 14^th round of negotiations took place in July 2016 in Brussels and negotiators are hoping to conclude their work by the end of 2016.

8. NIH Reauthorization

The House passed HR 6, the 21^st Century Cures Act by a vote of 344 to 77 in July 2015. The Senate HELP Committee took a more piecemeal approach and approved 19 bills this year. House and Senate negotiators could announce a bipartisan agreement on renewing the authorization of the National Institutes of Health soon after Congress returns in September. But it could be put off until next year when the FDA user fee authorization expires.

9. Criminal Sentencing

The Senate Judiciary Committee reported out S 2123, the Sentencing Reforms and Corrections Act at the end of last year, which would reduce or eliminate mandatory minimum prison terms for street-level drug offenses. At the beginning of 2016, members of the Senate Judiciary Committee were negotiating the fine points of the legislation and by early March bill sponsors were confident enough to say they were close to an agreement. However, some key Senators oppose provisions that would reduce mandatory minimum sentences, so pre-election consideration of the bill is unlikely. 

10. EB-5 Investor Visas

The Regional Center Program sets aside EB-5 visas for participants who put either $500,000 or $1 million (depending on the type of investment) in an area of high unemployment. The program allows investors to pool resources and gain visas with less money on the line than otherwise would be required. The authorization for the program is set to expire at the end of this fiscal year, and there is disagreement in the Senate over whether it should be reauthorized. Critics include Senate Judiciary Committee Chairman Charles Grassley (R-IA) and Ranking Member Patrick Leahy (D-VT) who believe that the program is marred by fraud and abuse. They want to overhaul the program rather than reauthorize it. Sen. Charles Schumer (D-NY) and Majority Whip John Cornyn (R-TX) support the program and don’t want to alter it. Grassley and Leahy introduced S 1501, the American Job Creation and Investment Promotion Reform Act of 2015, which would raise the minimum investment in the program from $500,000 to $800,000, and would give the Department of Homeland Security more authority to investigate domestic and international fraud claims. Schumer and Cornyn back S 2415, the EB-5 Integrity Act, which was introduced by Sen. Jeff Flake (R-AZ) on Dec 17, 2015.

11. Zika Funding

In February, President Obama requested $1.9 billion to combat the Zika virus. House Republicans balked at the amount and sought offsets from other programs. House and Senate Republicans worked out an agreement to provide $1.1 billion to fight the Zika virus, which was included in the conference report for the FY17 Military Construction Veterans Affairs spending bill (HR 2577). The House adopted the conference report on June 23 by a vote of 293 to 177. Democrats in the Senate blocked a cloture vote on the conference report by a vote of 52 to 44 on July 14. Democrats prefer the agreement that provided $1.1B without offsets or use restrictions. In the meantime, HHS has said that transferred funds that they have been using to fight the Zika virus now will run out at the end of September.

12. Postal Service Solvency

The U.S. Postal Service lost $5 billion last year, and after it was forced to reduce the price of a first-class stamp to 47 cents from 49 cents, it will likely lose even more this year. The losses are being driven by a requirement to pre-fund future retiree health benefits, and by USPS’s difficulty in transitioning from being a letter-oriented service to a package delivery service. Reps. Jason Chaffetz (R-UT) and Elijah Cummings (D-MD) cosponsored HR 5714, the Postal Service Reform Act, which was introduced in the House on July 11, 2016. And on the Senate side, Sen. Tom Carper (D-DE) introduced S 2051, the Improving Postal Operations, Service, and Transparency Act of 2015, and held hearings on the bill earlier this year. Lawmakers are pushing to aid the postal service before Christmas.

13. School Nutrition Programs

The House Education and Workforce Committee approved HR 5003, the Improving Child Nutrition and Education Act of 2016, by a vote of 20 to 14 on May 18, while the Senate very nearly passed a child nutrition reauthorization bill by unanimous consent just before the recess. The Senate Agriculture, Nutrition, and Forestry Committee approved S 3136, the Improving Child Nutrition Integrity and Access Act of 2016 on January 20 by voice vote. The bills reauthorize nutrition programs with temporary authorizations while changing related programs. The last reauthorization expired at the end of fiscal year 2015, and most programs were continued under the FY16 omnibus spending bill. There are substantial differences between the House and Senate bills, with the Senate bill having broader support. House Education Chairman John Kline (R-MN) is retiring at the end of this Congress and is expected to push for finishing this bill before he leaves. 

14. Temporary Assistance for Needy Families (TANF) Program

The Temporary Assistance for Needy Families program, which provides $16.5 billion in annual federal block grant funding to states, will expire at the end of this fiscal year. But it has been routinely extended in previous fiscal years. The House passed HR 5170, the Social Impact Partnerships to Pay for Results Act, on June 21 by voice vote on the suspension calendar. Senate timing is unclear at this point. The goals of the program are providing assistance to families so that childcare can be provided in their own homes; reducing families’ need for government benefits; preventing out-of-wedlock pregnancy; and encouraging the maintenance of two-parent families. The base block grant amount hasn’t been increased since the program’s inception in 1996. 

15. Water Resources Reform and Development Act

Legislation authorizing Army Corps of Engineers water projects has bipartisan support in both chambers and could be considered this fall. The House Transportation and Infrastructure Committee reported HR 5303, the Water Resources Development Act of 2016 out of committee on May 25 by voice vote. The Senate Environment and Public Works committee reported out their bill, S 2848, the Water Resources Development Act of 2016 on April 28 by a vote of 19 to 1. The current authorization expires at the end of this fiscal year. The Senate bill includes a provision to address the Flint, MI water crisis.

16. State Department Reauthorization

The Senate Foreign Relations Committee reported out of committee S 2937, the State Department Authorization Act for Fiscal Year 2017. And S 1635, the Department of State Operations Authorization and Embassy Security Act for Fiscal Year 2016 was passed by the full Senate by unanimous consent on April 28, 2016. The State Department has not had a reauthorization since 2002. Senate Foreign Relations Committee Chairman Bob Corker (R-TN) still plans to pursue passage of the 2016 and 2017 authorization bills, but its unclear what venue he would choose. He and Ranking Member Ben Cardin (D-MD) could introduce it on the Senate floor or attempt to add it to the possible CR. 

17. Intelligence Reauthorization

The House passed their FY17 Intelligence Authorization Act (HR 5077) on May 24 by a vote of 371 to 35. The Senate bill, S 3017, has been reported out of the Senate Intelligence Committee but has not yet reached the Senate floor for consideration.

Department of Defense (DOD) Secretary Ash Carter formally opened a Defense Innovation Unit Experimental office in Boston this week, dubbed DIUx 2.0. Secretary Carter said that they chose Boston because it is an area demonstrating great innovation in biotechnology and the biosciences. Bernadette Johnson, Chief Technology Officer at Massachusetts Institute of Technology’s Lincoln Labs, was appointed as DIUx’s Chief Science Officer, and Air Force Reserve Colonel Mike McGinley is becoming active duty to be the military lead in Boston.

Secretary Carter also announced nine new appointees to the Defense Innovation Advisory Board (DIAB). Previously he had announced that the board would be led by Chairman Eric Schmidt, Executive Chairman of Alphabet Inc, and would also include LinkedIn Executive Chairman Reid Hoffman, U.S. Special Operations commander Bill McRaven, and the Aspen Institute’s Walter Isaacson. The board has been tasked with identifying innovative private sector best practices that could be of use to DOD. These best practices could be organizational, technological, operational, or how people and talent are managed. The board’s recommendations are due this fall. The current and prospective Board members are:

• Eric Schmidt, executive chairman, Alphabet Inc. (DIAB chair)
• Jeff Bezos, president, chairman and CEO, Amazon Inc.
• Adam Grant, professor, Wharton School of Business
• Danny Hillis, computer theorist & co-founder, Applied Inventions
• Reid Hoffman, co-founder, LinkedIn, and partner, Greylock Partners
• Walter Isaacson, president & CEO, Aspen Institute
• Eric Lander, president and founding director, Broad Institute of MIT and Harvard
• Marne Levine, chief operating officer, Instagram
• Michael McQuade, senior vice president for science and technology, United Technologies
• William McRaven, chancellor, University of Texas System
• Milo Medin, vice president, Access Services, Google Capital
• Richard Murray, professor, California Institute of Technology
• Jennifer Pahlka, founder, Code for America
• Cass Sunstein, professor, Harvard Law School
• Neil deGrasse Tyson, astrophysicist and author

The program was originally launched last year with an office in Silicon Valley. It was created as a way for DOD to more easily partner with tech industries. The effort was rebooted in May of this year when Secretary Carter changed its leadership, had it report directly to him, and appointed a Defense Innovation Advisory Board.

The program now also has its own contracting capability and budget resources. DIUx is employing an innovation engagement mechanism called a Commercial Solutions Opening (CSO) to take advantage of flexible new authorities for prototyping granted by Congress. The CSO allows tech firms to bring ideas to DOD in the same way they would to other buyers of commercial technology, streamlining paperwork requirements and allowing the department to provide funding in less than 60 days after first contact with a firm and within 30 days after receiving a formal proposal.

The Secretary also said that DIUx is now divided into three teams: Engagement, Foundry, and Venture. The Engagement Team acts as a liaison between the military and business owners, introducing private industry innovators to the problems faced by the military. The Foundry team develops existing technologies until they can be put into use by the military. DIUX’s Warfighter-in-Residence and Entrepreneur-in-Residence programs match soldiers with industry engineers to rapidly design, prototype, and test new equipment and systems. And the Venture team seeks out new commercial technologies and attempts to adapt them to defense applications. They make research and development awards to companies ranging from start-ups to major tech companies. They also seek to match these projects with DOD customers for funding and staffing resources.

All of these new announcements are part of Secretary Carter’s efforts to ensure that the initiative lasts beyond his tenure at the helm of DOD.

With Congress about to go into recess at the end of next week until September and the Senate’s rejection of the cloture vote on their FY17 Defense spending bill, appropriators are once again talking about a year-end omnibus spending package as well as a continuing resolution (CR). There is already internal debate among lawmakers over how long a CR should last to keep the government running in the meantime. Senate Majority Leader Mitch McConnell (R-KY) has said that he would like to return to the appropriations process when they reconvene in September. Over on the House side, Conservatives in the Freedom Caucus are seeking a vote on a six-month CR next week, but House Majority Leader Kevin McCarthy (R-CA) said this week that they can still work on appropriations bills and that he doesn’t “think that’s the right time to do a CR.” Other senior appropriators like Rep. Tom Cole (R-OK) agreed with McCarthy and are pushing for a CR that would end by December allowing Congress to pass an omnibus in the lame-duck session.

House

Floor

The House passed its $21.7B FY17 Financial Services Appropriations bill this week by a vote of 239 to 185 (four Democrats voted for the measure and 7 Republicans voted against it). The President has threatened to veto the bill over spending cuts and policy riders. During consideration of the bill, the House adopted an amendment by a vote of 217 to 203 that would bar funding to change registration requirements for the Selective Service System. The amendment, in effect, prevents women from being able to register for a potential military draft, which was a provision included in the Senate’s FY17 National Defense Authorization Act.

House FY17 Financial Services Bill Text:

https://www.congress.gov/114/bills/hr5485/BILLS-114hr5485rh.pdf

House FY17 Financial Services Report Language:

https://www.congress.gov/114/crpt/hrpt624/CRPT-114hrpt624.pdf

Statement of Administration Policy:

https://www.whitehouse.gov/sites/default/files/omb/legislative/sap/114/saphr5485r_20160621.pdf

Next week the House will take up its $32.095B FY17 Interior appropriations bill on the House floor. The House Rules Committee will meet on Monday to determine which amendments will be considered.

House FY17 Interior Appropriations Bill Text:

https://www.congress.gov/114/bills/hr5538/BILLS-114hr5538rh.pdf

House FY17 Interior Appropriations Report Language:

https://www.congress.gov/114/crpt/hrpt632/CRPT-114hrpt632.pdf

Amendments Offered to House FY17 Interior Appropriations Bill:

https://rules.house.gov/bill/114/hr-5538

Labor HHS Education

The House Labor HHS Education Appropriations subcommittee marked up its $161.6B spending bill in subcommittee this week. The bill is $569M below the FY16 enacted level, $2.8B below the President’s FY17 budget request, and approximately $300M less than the Senate FY17 version. The bill was approved by voice vote and will be marked up in full committee next Wednesday. It is the 12^th and final bill to be considered by the House appropriations committee this year.

House FY17 Labor HHS Bill Text:

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

House FY17 Labor HHS Summary:

http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394633

State Foreign Operations

The House State Foreign Operations Appropriations subcommittee marked up its $52B FY17 spending bill this week. The bill is $595M below the FY16 enacted level, $691M below the President’s FY17 budget request, and roughly $100M below the Senate’s FY17 funding level. Within the overall funding amount, Overseas Contingency Operations (OCO) funding totals $14.9B, which is equal to the FY16 enacted level. The bill was reported out of subcommittee unanimously despite the inclusion of policy riders related to abortion and climate change. The bill will be marked up in full committee next Tuesday.

House FY17 State Foreign Operations Bill Text:

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

House FY17 State Foreign Operations Summary:

http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394623

Senate

Floor

Democrats in the Senate blocked consideration of the FY17 Defense Appropriations bill in a cloture vote on the motion to proceed. The vote failed 50 to 44 with two Democrats (Donnelly and Manchin) voting for cloture. Sixty votes were needed to proceed. The bill had passed out of committee unanimously (30-0) on May 26. Senate Majority Leader Mitch McConnell (R-KY) said that the Senate would resume consideration of the motion to proceed to the spending bill next week.

FY17 Military Construction-Veterans Affairs and Zika Virus Funding Conference Agreement

With only one week left before the summer recess, Congress has not completed action on the FY17 Military Construction-Veterans Affairs (MilConVA) conference spending bill that includes emergency funding for the Zika virus. While the administration had requested $1.9B for Zika, Senate Minority Leader Harry Reid (D-NV) indicated this week that they would accept the $1.1B that the Senate had approved on a bipartisan basis last month. However, the administration still objects to the inclusion of restrictions on funding for Planned Parenthood and the funding offsets as well as the fact that the bill doesn’t represent a bipartisan compromise. Democrats also object to provisions in the MilConVA portion of the bill including the removal of environmental safeguards on pesticide spraying, reduced funding for veterans, and the removal of a provision prohibiting the flying of the Confederate flag at veterans cemeteries. Senate Majority Leader Mitch McConnell (R-KY) has promised another vote on the measure before the end of next week.

Subcommittee                     House                                      Senate

FY16 vs. FY17 302(b) Allocations

*Includes Overseas Contingency Operations (OCO) funding.

House of Representatives

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

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

Agriculture

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

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

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

Bill Text:

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

Report Language:

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

Agriculture Adopted Amendments:

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

Energy and Water

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

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

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

Bill Text:

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

Report Language:

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

Energy and Water Adopted Amendments:

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

Legislative Branch

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

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

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

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

Bill Text:

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

Senate

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

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

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

Commerce-Justice-Science

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

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

Bill Text:

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

Report Language:

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

Energy and Water

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

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

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

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

Senate FY17 Energy and Water Bill Text:

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

Senate FY17 Energy and Water Report Language:

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

Transportation Housing and Urban Development

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

Bill Text:

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

Report Language:

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

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

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

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

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

1. Transregional and Transfunctional Integration and Advice

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

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

2. Combatant Command Updates and Streamlining Headquarters

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

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

3. Acquisition Reform

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

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

4. Changes to Joint Personnel Management

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

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

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

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

CBO Analysis of President’s FY17 Budget Request

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

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

CBO Analysis:

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

FY17 Budget Resolution

House Republicans were supposed to adopt an FY17 budget resolution this week before adjourning for the spring recess, but disagreement by the House Freedom Caucus over the $1.07T discretionary spending level caused House leaders to delay action on the budget until after the recess. The House Budget Committee approved the FY17 budget resolution last week by a vote of 20 to 16 with two Republicans opposed. But its consideration on the floor has been postponed because it lacks enough GOP support to pass. This week, the committee released the report accompanying the budget resolution, which can be found at:

http://budget.house.gov/uploadedfiles/fy2017_budget_resolution.pdf

The House returns on April 12, leaving just four days to adopt a budget by the statutory deadline of April 15. House Speaker Paul D. Ryan (R-WI) has said that he wants the House to adopt a budget resolution. House Budget Committee Chairman Tom Price (R-GA) tried to broker an agreement with the Freedom Caucus by coupling the FY17 budget resolution with consideration of separate legislation that would cut $30B in entitlement programs. The House Ways and Means Committee has already passed legislation providing about $98B in spending cuts and offsets over 10 years, and the House Energy and Commerce Committee approved a bill that would cut spending by $25B over 10 years. But the House Judiciary Committee adjourned a markup this week that would have overhauled the medical liability system providing savings to make up part of the $30B. The Judiciary Committee cited scheduling conflicts and an insufficient number of members for a quorum as the reason for the adjournment. Finally, the House Financial Services Committee is planning a markup for after the recess that would add to the $30B spending cuts, but the Agriculture Committee is not likely to take up any measures until the chairman knows that the budget process is going to move forward. Conservatives in the House are skeptical that the $30B in cuts will be enacted into law. So some Republicans in the House are now working on a mechanism that could make the $1.07T discretionary spending level contingent on enactment of legislation making $30B in cuts to mandatory spending programs.

While leadership tries to work this out, aides are considering alternatives to a budget resolution including a “deeming” resolution that would set a simple topline discretionary spending limit. However, they would need the support of Democrats to get this passed, which would risking weakening GOP unity. Or they could proceed to the annual appropriations bills without a budget resolution.

On the Senate side, Senate Budget Committee Chairman Michael Enzi (R-WY) is planning on using the Balanced Budget Act of 2015 to provide the necessary authority for setting the $1.07B top-line discretionary budget.

FY17 Appropriations

The House Appropriations Committee kicked off the FY17 appropriations process this week with the Military Construction/Veterans Affairs (MilCon/VA) subcommittee marking up its $81.6B FY17 spending bill. The bill is $1.8B more than the FY16 enacted level, but $1.2B less than the President’s FY17 budget request. It provides $7.9B for military construction projects (a decrease of $305M below FY16 enacted levels and $250M above the President’s FY17 budget request) and $73.5B in discretionary funding for the Department of Veterans Affairs (an increase of $2.1B over FY16 enacted levels). The bill was approved by voice vote in the subcommittee, and the target date for full committee markup is April 13. A copy of the draft bill text can be found at:

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

With no budget resolution adopted in the House, House Appropriations Committee Chairman Hal Rogers (R-KY) is instructing his committee to markup their bills at the $1.07T overall discretionary funding level. But he did not give his subcommittee chairmen “notional” discretionary allocations (302(b)s) for their individual bills before leaving for the spring recess. Rogers has said that he supports bringing the bills to the floor after May 15 if there is no budget resolution in place by then. Under the 1974 budget law that created the current day appropriations process, the House must wait until after May 15 to bring spending bills to the floor unless that rule gets waived. Rogers acknowledged that it would be up to House leadership to waive this rule, but indicated that he intends to have all (or as many as possible) of the 12 spending bills through full committee and ready for floor action by May 15. Ranking Member Nita Lowey (D-NY) has asked Rogers to prioritize the Commerce-Justice-Science and Homeland Security bills in the process given the attacks in Belgium. However, Rep. Mike Simpson (R-ID), Chairman of the Energy and Water subcommittee, has said that his subcommittee’s bill “probably” would be next.

Despite the House Freedom Caucus voting to reject the FY17 budget resolution during a meeting on Monday night, the House Budget Committee pushed forward with their scheduled markup on Wednesday. Members of the Freedom Caucus said that they would accept a budget resolution for $1.04T in discretionary spending, or $1.07T as long as there was an agreement that $30B in cuts in mandatory spending would be signed into law by the President at the same time.

While the Budget Committee did approve the budget resolution by a vote of 20 to 16 and the House often votes on it on the floor the following week, House leadership announced late this week that the budget won’t be on the House floor until after the Spring recess.

In an effort to garner conservative support for the FY17 budget resolution, the Ways and Means Committee approved three measures this week that provide about $98B in spending cuts and offsets over 10 years. The three measures are expected to move on the floor as part of a single measure carrying spending cuts and revenue-raising measures reported by several committees.

1. HR 4722, a bill requiring inclusion of the taxpayer’s social security number to claim the refundable portion of the child tax credit. (Raises ~$19.9B over 10 years)

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Johnson-TX03.pdf

2. HR 4723, a bill providing for the recovery of improper overpayments resulting from certain Federally subsidized health insurance (“Obamacare”). (Raises ~$16.6B over 10 years)

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Jenkins-KS02.pdf

3. HR 4724, a bill repealing the program of block grants to States for social services. (Raises ~$16.5B over 10 years)

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Brady-TX08.pdf

And the House Energy and Commerce Committee approved on a party-line 28 to19 vote legislation that would cut spending by $25 billion over 10 years. HR 4725 would repeal the Prevention and Public Health Fund, which was created under President Obama’s Affordable Care Act; reduce Medicaid reimbursements to states for prisoners; and scale back the federal match for the Children’s Health Insurance Fund.

HR 4725:

https://www.congress.gov/114/bills/hr4725/BILLS-114hr4725ih.pdf

Despite the questionable outcome of the FY17 budget resolution, appropriators on both sides are moving forward with their spending bills. The House Military Construction-Veterans Affairs (MilCon-VA) Appropriations Subcommittee is scheduled to mark up its FY17 spending bill in subcommittee next Wednesday morning (9 AM). Since 302(b)s have not been issued to subcommittees yet, MilCon-VA Subcommittee Chairman Charlie Dent (R-PA) has been given a “notional” discretionary spending figure. The Senate Appropriations Committee is expected to kick off marking up its spending bills with the FY17 MilCon-VA on April 14. However, Senate Appropriations Committee Chairman Thad Cochran (R-MS) said that his committee won’t necessarily follow the same order as House Appropriators for following bills.

House Minority Leader Nancy Pelosi (D-CA) and other Democratic leaders reiterated a call for passage of an emergency supplemental appropriations bill to address the Zika virus, opioid abuse, and the Flint, MI water crisis before the House adjourns for the Spring recess. The letter addressed to House Speaker Paul Ryan (R-WI) can be found at:

https://www.vantagepointstrat.com/govdoc20160318-171893/

FY17 Budget Resolution

House Republicans are pushing plans to cut entitlement programs as they seek to come to an agreement on their FY17 budget resolution. House leaders had scheduled a call for today with the entire Republican House conference to try to determine if they have the votes to adopt a budget resolution. They are promising a vote on legislation cutting $30 billion in mandatory spending programs in return for passing a budget resolution. House Budget Committee Chairman Tom Price (R-GA) is hoping to mark up a budget next Tuesday or Wednesday with floor consideration the following week.

House Ways and Means Committee Chairman Kevin Brady (R-TX) offered three bills this week that would cut spending by $16.5B over two years:

1. HR 4722, a bill requiring inclusion of the taxpayer’s social security number to claim the refundable portion of the child tax credit.

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Johnson-TX03.pdf

2. HR 4723, a bill providing for the recovery of improper overpayments resulting from certain Federally subsidized health insurance (“Obamacare”).

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Jenkins-KS02.pdf

3. HR 4724, a bill repealing the program of block grants to States for social services.

http://waysandmeans.house.gov/wp-content/uploads/2016/03/Brady-TX08.pdf

The House Energy and Commerce Committee also plans on taking action on legislation that would cut spending by $25 billion over 10 years. HR 4725 would repeal the Prevention and Public Health Fund, which was created under President Obama’s Affordable Care Act; reduce Medicaid reimbursements to states for prisoners; and scale back the federal match for the Children’s Health Insurance Fund.

HR 4725:

https://www.congress.gov/114/bills/hr4725/BILLS-114hr4725ih.pdf

The House authorizing committees are planning on marking up these bills next week if the decision is made to go forward with an FY17 budget resolution. Democrats are likely to oppose these measures, which means that they don’t stand much of a chance of being passed by the Senate even if the House passes them.

On the Senate side, Senate Budget Committee Chairman Mike Enzi (R-WY) said that his committee is delaying consideration of a budget this month. Vulnerable Senators running for re-election this fall would prefer to not have to cast difficult votes cutting popular programs like Medicare. And any attempts to break from last year’s bipartisan agreement could delay the FY17 appropriations process in a year when Republicans have promised to restore regular order and the calendar is shortened due to Presidential nominating conventions. Enzi hasn’t ruled out returning to a budget resolution in coming months, but he has suggested that the Senate could live without one this year given last year’s two-year bipartisan budget agreement.

Meanwhile, in the Appropriations Committees, the Senate is planning to move the annual spending bills even without a budget resolution. Senate Majority Leader Mitch McConnell (R-KY) vowed to move forward with the appropriations process at the spending levels agreed to last fall. McConnell has stated that his number one goal this year is to pass regular appropriations bills on time. Senate Appropriators expect to receive their 302(b) allocations around April 15 or a bit later. The allocations allow the subcommittees to begin writing their spending bills.