The House and Senate are back in session this week and are focused on three main issues: fiscal year 2024 appropriations bills, a border security and Ukraine/Israel/Taiwan supplemental funding deal, and a tax package. Here’s the latest…

FY2024 Appropriations

Government funding for veterans, transportation, agriculture and energy programs runs out March 1. Funding for the rest of the government, including the military and the biggest domestic programs, expires March 8. House and Senate leadership reached agreement on an overall funding level for the FY24 bills earlier this year. Appropriators made more progress late Friday when Senate Appropriations Committee Chair Patty Murray (D-WA) and House Appropriations Committee Chair Kay Granger (R-CA) reached a deal on how to allocate the overall $1.66T funding level between the 12 appropriations bills. The chairs had been negotiating these allocations for almost three weeks. This deal allows subcommittee staff to start writing and negotiating their bills. The House is scheduled to be in session 11/14 days, while the Senate is scheduled to be in session 13/17 days before the continuing resolutions (CRs) expire on March 1^st/8^th.

Even if Congress can pass the FY24 appropriations bills by the March deadlines, the fiscal year will be nearly halfway over and agencies will be under pressure to get the money out the door in an expedited timeline. However, they were last confronted with the same challenge in FY2022 when the final bills were enacted on March 15, 2022.

Border Security and Ukraine/Israel/Taiwan Supplemental Funding

Senate negotiators said over the weekend that they had reached a deal on border policy changes and are finalizing the last pieces of legislative text. President Biden endorsed the deal framework.

One of the negotiators, Sen. Chris Murphy (D-CT), said the deal would give the administration the authority to shut down the border between ports of entry if daily average migrant crossings reach catastrophically high levels (more than 4,000/day). The deal would also speed up the asylum process from 10 years to six months.

There is not a timeline for Senate consideration right now, and, even if the Senate can pass the package, resistance from the right will make passage in the House challenging. Former President Trump has called on them to reject anything that is short of a “perfect” deal and House Speaker Mike Johnson (R-LA) has said it would be “dead on arrival” in the House. Sen. Jim Lankford (R-OK), the top GOP negotiator on the deal, pushed back on the attacks saying critics have yet to see the bill. Republicans also are concerned the deal would hand President Biden a “win” in an election year.

Republicans have said a border security deal is necessary for them to consider providing $110.5B in supplemental emergency funding for Ukraine, Israel, and Taiwan. If Congress can’t pass the border security-immigration reform part of the deal, it is unclear if Senate Minority Leader Mitch McConnell (R-KY) will agree to split off the supplemental funding and try to pass it separately in the hopes of pressuring the House to take it up.

Tax Package

The House could vote this week on the Tax Relief for American Families and Workers Act that was passed out of the House Ways and Means Committee earlier this month by a vote of 40-3. The $78B bipartisan tax deal could go to the House floor under a rule (requires majority vote for passage) or under suspension of the rules (requires 2/3 majority vote for passage). Suspension allows the House to skip voting on a rule to provide for the bill’s consideration, limits floor debate, and prohibits floor amendments; but it would require a significant number of Democratic votes for passage. New York Republicans in the House have said they won’t vote for the bill if it does not include a provision to lift the state and local tax (SALT) exemption limit.

Senate Finance Committee Chair Ron Wyden (D-OR) has not said whether he plans to mark up the bill in Committee or take it straight to the Senate floor for consideration. Wyden may be watching the outcome of the House consideration before making that decision. The bill’s supporters hope a strong showing in the House will put pressure on the Senate to quickly pass the legislation and not succumb to pressure from Senate Republicans who want to make some changes to the legislation.

Debt Ceiling

In November, Treasury Secretary Janet Yellen warned Congress that the U.S. would reach its debt limit on December 15. But Republicans in the Senate are refusing to vote for lifting the debt ceiling at a time when Democrats are passing big spending bills. With the Senate evenly split 50-50, a deal is needed to allow the Senate to pass a bill temporarily raising the debt ceiling with only Democratic votes.

This week, Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) struck a deal that would allow the Senate to bypass the filibuster and vote on lifting the debt ceiling. First the Senate needed to pass S. 610, a bill that would allow the Senate to pass a debt limit increase with a simple majority vote. That bill passed by a vote of 59 to 35. S. 610 passed the House earlier this week by a vote of 222 to 212. Rep. Adam Kinzinger (R-IL) joined all Democrats in voting for the measure.

Next, they will take up a measure to raise the debt ceiling. The new debt ceiling is expected to exceed $30T (currently set at $28.9T) to ensure Congress won’t need to act again until after the midterm elections in November 2022.

National Defense Authorization Act

The Senate tried to consider their FY2022 National Defense Authorization Act (NDAA) last week but the process stalled when Sen. Rubio (R-FL) blocked an amendment deal after he failed to get his amendment to ban imports from China’s Xinjiang region in the package that would get votes before a final vote in the Senate. The amendment wasn’t included in the package because it violated a clause in the Constitution that stipulates that bills that raise revenue have to originate in the House.

The House passed their FY22 NDAA on September 23. Rather than wait for the Senate to pass their bill and then conference it with the House bill; House, Senate, and Armed Services Committee leaders decided to move forward with a conferenced version of the bill. The House passed S. 1605 on Tuesday by a vote of 363 to 70. The $768B defense policy bill now heads to the Senate where it’s expected to advance fairly easily next week before heading to the President for his signature.

Bill Text

https://rules.house.gov/sites/democrats.rules.house.gov/files/BILLS-117S1605-RCP117-21.pdf

Text of Joint Explanatory Statement

https://rules.house.gov/sites/democrats.rules.house.gov/files/17S1605-RCP117-21-JES-U1.pdf

Summary

https://rules.house.gov/sites/democrats.rules.house.gov/files/17S1605-RCP117-21-summary.pdf

Build Back Better Act

Senate Majority Leader Chuck Schumer (D-NY) said yesterday that Democrat’s top legislative priority – the Build Back Better (BBB) Act – will pass before Christmas. However, Sen. Joe Manchin (D-WV) has made it clear that he is in no rush to vote for the package.

Five Senate committees released their respective pieces of the reconciliation package this week, and the Congressional Budget Office released cost estimates for four of those pieces.

Title IV – Committee on Banking, Housing, and Urban Affairs
Legislative Text | CBO Score

Title VIII – Committee on Commerce, Science, and Transportation
Legislative Text | CBO Score

Title X – Committee on Small Business and Entrepreneurship
Legislative Text | CBO Score

Title XI – Committee on Veterans’ Affairs
Legislative Text | CBO Score

Title IX – Committee on Indian Affairs
Legislative Text

DOD Chief Digital and Artificial Intelligence (AI) Officer (CDAO)

DOD Deputy Secretary Kathleen Hicks issued a memo yesterday announcing the establishment of the Chief Digital and Artificial Intelligence Officer (CDAO) effective February 1, 2022. The CDAO will report directly to Deputy Secretary Hicks and will serve as the department’s senior official responsible for strengthening and integrating data, artificial intelligence, and digital solutions in the Department.

While the Pentagon already has a chief data officer, a Defense Digital Service and the Joint Artificial Intelligence Center, this new position is needed to integrate all these efforts. It was one of the recommendations of the National Security Commission on AI.

The goal is for the CDAO to reach full operating capability no later than June 1, 2022.

National Defense Strategy

Colin Kahl, DOD Undersecretary for Policy, said yesterday that a new National Defense Strategy (NDS) is expected to be released early next year along with the Nuclear Posture Review and the Missile Defense Review. The NDS itself is under the National Security Strategy, which will come out first. The current National Defense Strategy is from 2018. The White House released an interim National Security Strategy in March and approved the classified Global Posture Review on November 29.

GAO Issues Report on Defense Contractor Cybersecurity

This week, the Government Accountability Office (GAO) issued a report, Defense Contractor Cybersecurity: Stakeholder Communication and Performance Goals Could Improve Certification Framework, which reviewed DOD’s implementation of the Cybersecurity Maturity Model Certification (CMMC). The report focused on what steps DOD took to develop CMMC, the extent to which DOD made progress in implementing CMMC (including communication with industry), and the extent to which DOD has developed plans to assess the effectiveness of CMMC.

GAO issued three recommendations that DOD concurred with and outlined plans to address them in CMMC 2.0:

1. The Secretary of Defense should ensure the Under Secretary of Defense for Acquisition and Sustainment provides sufficient and timely communication to industry on Cybersecurity Maturity Model Certification, including when additional information will be forthcoming.

2. The Secretary of Defense should ensure the Under Secretary of Defense for Acquisition and Sustainment develops a plan to evaluate the effectiveness of Cybersecurity Maturity Model Certification’s pilot, including establishing measurable objectives, collecting relevant data, and identifying lessons and plans to use that information to inform future decisions about the Cybersecurity Maturity Model Certification.

3. The Secretary of Defense should ensure the Under Secretary of Defense for Acquisition and Sustainment develop outcome-oriented performance measures to evaluate the effectiveness of Cybersecurity Maturity Model Certification as a component of the department’s efforts to enhance cybersecurity for the defense industrial base.

Vaccine Mandate for Federal Contractors

Today the Office of Management and Budget issued guidance on implementing requirements of the vaccine mandate executive order given recent court orders and injunctions:

• For existing contracts or contract-like instruments (hereinafter “contracts”) that contain a clause implementing requirements of Executive Order 14042: The Government will take no action to enforce the clause implementing requirements of Executive Order 14042, absent further written notice from the agency, where the place of performance identified in the contract is in a U.S. state or outlying area subject to a court order prohibiting the application of requirements pursuant to the Executive Order (hereinafter, “Excluded State or Outlying Area”). In all other circumstances, the Government will enforce the clause, except for contractor employees who perform substantial work on or in connection with a covered contract in an Excluded State or Outlying Area, or in a covered contractor workplace located in an Excluded State or Outlying Area.
• Currently Excluded States and Outlying Areas: All of the United States and its outlying areas, including:
  1. The fifty States;
  2. The District of Columbia;
  3. The commonwealths of Puerto Rico and the Northern Mariana Islands;
  4. The territories of American Samoa, Guam, and the United States Virgin Islands; and
  5. The minor outlying islands of Baker Island, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, and Wake Atoll.
• NOTE: Federal agency COVID-19 workplace safety protocols for Federal buildings and Federally controlled facilities still apply in all locations. Contractor employees working onsite in those buildings and facilities must still follow Federal agency workplace safety protocols when working onsite.

While Congress may have just finished action on the FY2020 funding bills last month, some members of Congress are already considering providing additional funding for this fiscal year to deal with the increase of troops in the Middle East and the earthquake in Puerto Rico. A supplemental appropriations measure for FY20 could be brought up later this year. The Office of Management and Budget (OMB) said that there are no plans right now for the administration to request a supplemental measure.

And the FY2021 process is set to begin in just one month. The President will deliver his FY21 budget request to Congress on Monday, February 10. Once Congress receives the request, the next step is for the House and Senate Budget Committees to draft budget resolutions. However, since the July 2019 spending agreement set the overall discretionary spending levels for FY21, Congress doesn’t need to pass budget resolutions this year. House Budget Committee Chairman John Yarmuth (D-KY) said this week that he while he has not made a final decision, he does not expect to draft a resolution. Senate Budget Committee Chairman Michael Enzi (R-WY) said that he does plan to mark up a budget resolution and hopes to include some changes to the budget process in that resolution. One potential change is moving to a two-year budget cycle.

The House and Senate Appropriations Committees could start their work on FY21 spending bills relatively quickly because the July 2019 spending agreement set the overall discretionary spending levels for FY21. The bipartisan deal provides $740.5B for defense spending (including war-related funding) and $634.5B for nondefense spending. The first hearing in the House Appropriations Committee (Interior-Environment Subcommittee) on the FY21 budget request is scheduled for February 6. House Majority Leader Steny Hoyer (D-MD) said he plans to set aside the month of June to for the House to pass most of the 12 annual spending bills. But with 2020 being an election year, appropriators are not expected to finish their work before the end of the fiscal year (September 30) and when they adjourn for the election (October 2 – House, October 9 – Senate). A lame duck session after election day is expected.

The House passed H.J. Res. 46, a joint resolution that would terminate a national emergency regarding border security that was declared by the President on February 15, 2019.The resolution passed by a vote of 245 to 182 with thirteen Republicans (Amash-MI, Fitzpatrick-PA, Gallagher-WI, Herrera Beutler-WA, Hurd-TX, Johnson-SD, Massie-KY, Rodgers-WA, Rooney-FL, Sensenbrenner-WI, Stefanik-NY, Upton-MI, Walden-OR) joining all Democrats in voting for the measure. House Minority Whip Steve Scalise said that while he hoped the Senate would block disapproval Trump’s national emergency regarding border security, he thought it would have no chance of a veto override in the House.

Sens. Susan Collins (R-ME), Tom Udall (D-NM), Jeanne Shaheen (D-NH) and Lisa Murkowski (R-AK) introduced companion legislation to H.J. Res 46 in the Senate. Senate Majority Leader Mitch McConnell (R-KY) said it would be reasonable to expect the Senate would vote on S.J. Res. 10before the next recess week, which is the week of March 18. Democrats need at least four Republicans to vote in support of the resolution. Once again, even it passes the Senate, it almost certainly won’t become law as the President will veto it and the House and Senate won’t have the two-thirds majority votes to override his veto.

House Judiciary Committee Chairman Jerrold Nadler (D-NY) has said that Congress should consider amending the National Emergencies Act of 1976 (P.L. 94-412), the law that gives the President the power to declare emergencies of unlimited duration, so that emergency declarations expire after a certain period of time unless Congress ratifies them by law. The time period could be as short as 10 days.

White House Statement of Administration Policy on H.J. Res. 46

https://www.whitehouse.gov/wp-content/uploads/2019/02/saphj46h_20190226.pdf

The House and Senate voted today on an FY19 appropriations conference report that includes the seven remaining spending bills. The Senate took up H.J. Res. 31 first and passed it by a vote of 83-16. The no votes were from Sens. Booker (D-NJ), Braun (R-IN), Cotton (R-AR), Cruz (R-TX), Gillibrand (D-NY), Harris (D-CA), Hawley (R-MO), Inhofe (R-OK), Lee (R-UT), Markey (D-MA), Paul (R-KY), Rubio (R-FL), Sasse (R-NE), Scott (R-SC), Toomey (R-PA), and Warren (D-MA). The House followed and passed the bill by a vote of 300 to 128. Nineteen Democrats and 109 Republicans voted against the measure.

The conference report included the Agriculture, Commerce-Justice-Science, Financial Services, Homeland Security, Interior-Environment, State-Foreign Operations, and Transportation-HUD FY19 spending bills. 

In order to get a final deal, conferees had to give up on including several other provisions that members were seeking, such as securing back pay for federal contractors who lost work during the 35-day partial shutdown, reauthorizing the Violence Against Women Act, retroactively extending expired tax credits, and stopping automatic spending cuts to mandatory programs under the 2010 pay-as-you-go law. 

The bill now goes to the President for his signature. President Trump indicated earlier today that he will declare an emergency in order to allow the administration to redirect funds to fund a wall on the southwest border. Senate Majority Leader Mitch McConnell (R-KY) and House Minority Leader Kevin McCarthy (R-CA) said they would support this move by the President. Not all Senate Republicans, including Senate Majority Whip John Cornyn (R-TX) are on board with an emergency declaration as it sets a dangerous precedent and undermines the role of Congress. House Armed Services Committee Ranking Republican Mac Thornberry (R-TX) encouraged the President not to divert significant Department of Defense funding for border security as it would have detrimental consequences for our troops and military infrastructure. House Democrats could pass legislation to block the President’s emergency declaration. They could also sue the President and challenge his emergency declaration in court. Republicans sued then-President Barack Obama in 2014 over the Affordable Care Act. It was the first time a district-court judge affirmed the right of the House of Representatives, as an institution, to sue a sitting President. 

Bill Text

https://docs.house.gov/billsthisweek/20190211/CRPT-116hrpt9_u2-.pdf

Joint Explanatory Statement

https://docs.house.gov/billsthisweek/20190211/116hrpt9-JointExplanatoryStatement-u1.pdf

House Democrat Summary

https://appropriations.house.gov/sites/democrats.appropriations.house.gov/files/documents/Summary%20of%20Conference%20Report.pdf

Senate Democrat Summary

https://www.appropriations.senate.gov/imo/media/doc/Minibus%2019.pdf

Senate Republican Summary

https://www.appropriations.senate.gov/imo/media/doc/021319%20Combined%20Bill%20Summary.pdf

House and Senate negotiators are planning to work through the weekend to reach a border security deal that would clear the way for a final FY19 spending package. 

The conferees held a closed-door briefing on Wednesday with Customs and Border Protection officials as well as Carla Provost, Chief of U.S. Border Patrol. According to the White House, the Immigration and Customs Enforcement (ICE) briefer was not allowed in to the briefing room. (https://www.whitehouse.gov/briefings-statements/washington-times-ice-shut-border-talks-warns-democrats-plans-free-thousands-criminals/)

Details on how much funding and what type of construction would be allowed as barriers along the border are still being negotiated.

A disaster supplemental may be included in the final deal. Earlier this year, the House passed a $14.2B aid package for victims of hurricanes, wildfires, typhoons and other recent natural disasters. Senate Republicans introduced their own $12.8B package, but it hasn’t been considered on the Senate floor.

The conferees’ goal is to produce legislative text on Monday. They have been told to stay in town this weekend to be able to sign a conference report. Some members of the conference committee – Reps. Cuellar (D-TX), Fleischmann (R-TN), and Graves (R-GA) – are among those in a bipartisan group heading to Camp David this evening to discuss the 2019 legislative agenda with Acting White House Chief of Staff Mick Mulvaney.

The question is whether or not President Trump will sign what the conferees produce. Democratic leaders have expressed concerns about this pointing to previous reversals by the President including his most recent refusal to sign a six-week stopgap in December, which led to the 35-day partial government shutdown. House Minority Leader Kevin McCarthy (R-CA) dismissed those concerns saying that the President would sign it if there is a deal and there are enough bipartisan votes for it to pass. And Senate Appropriations Committee Chairman Richard Shelby (R-AL) met with the President this week. He said that the President urged him to get a deal done, and that he thinks the President would sign a final bill.

Congress must pass a final spending package or another continuing resolution by February 15 in order to avoid another shutdown. 

The current FY19 appropriations continuing resolution (CR) was set to expire at midnight tonight. While legislative action was largely paused this week for memorial services for former President George H.W. Bush, the House and Senate were able to clear another CR funding the remaining seven appropriations bills through December 21. The House cleared the new CR through a unanimous consent agreement, and the Senate followed passing it by voice vote. The President signed it into law today.

The CR also extends a number of expiring authorizations including the National Flood Insurance Program, the Violence Against Women Act, and Temporary Assistance for Needy Families

The President’s FY19 budget request submitted to Congress in February of this year requested $1.6B for 65 miles of new border wall system in southern Texas. The Senate has included $1.6B in their FY19 Homeland Security appropriations bill. The President informally increased the request to $5B in a meeting with congressional Republicans in June. A formal budget amendment with details of how the $5B would be spent has not been submitted to Congress. The House included $5B in their FY19 Homeland Security appropriations bill. Senate Appropriations Committee Chairman Richard Shelby (R-AL) has proposed a down payment of $2.5B for the border wall in FY19 followed by another $2.5B in FY20. President Trump has threatened to veto any spending measure that does not include $5B for the wall.

Senate Minority Leader Chuck Schumer (D-NY) said that Democrats would support one of two options – either an omnibus with the seven remaining bills with the Homeland bill including $1.6B for the wall or a spending package that includes six of the seven remaining FY19 appropriations bills and a full-year CR for the Department of Homeland Security. Schumer and House Minority Leader Nancy Pelosi (D-CA) are scheduled to meet with President Trump on Tuesday.

The administration has also submitted to Congress a four-page list that includes $4.76B in FY19 funding anomalies that they would like to see funded in the final FY19 spending bill. These new spending requests include funding for national security reviews of foreign purchases by U.S. businesses, to help combat more frequent wildfire outbreaks, and to care for unaccompanied migrant children in custody. How Congress will be able to accommodate these new funding requests given the funding caps is unclear. The remaining seven House bills are already $736M above their nondefense spending cap for FY19.

FY2019 Full-Year Funding Anomalies Requested by Trump Administration

https://www.vantagepointstrat.com/anomalies/

Talk has turned to Congress passing another continuing resolution (CR) funding the remaining seven FY19 appropriations bills through December 14. The current CR expires on December 7. Senate Appropriations Committee Chairman Richard Shelby (R-AL) said that some in Congress are pushing for a long-term CR through next September. But this may just be “talk” designed to increase political pressure for a final spending deal as a full-year homeland security CR would provide only $1.57B for the border wall (the amount from the FY18 Homeland Security appropriations bill).

This week Republicans proposed a plan that would provide $5B over two years for the President’s border wall – $2.5B in FY19 and $2.5B in FY20. Democrats have rejected this proposal. The Senate Homeland appropriations bill includes $1.6B for the wall compared to the House bill, which includes $5B (the President’s FY19 requested amount). President Trump told Republican leaders that he is adamant about getting $5B in FY19 as a down payment on the wall, and that he would veto any measure that provides only $1.6B for it.

Another obstacle could come from Senate Democrats, who are pushing to include a provision in the final spending bill to protect special counsel Robert S. Mueller III’s investigation from interference, if Republican leaders don’t allow a vote on a separate bill.

Intelligence spending in the U.S. is a combination of the National Intelligence Program (NIP) and the Military Intelligence Program (MIP). The NIP supports strategic planning and policymaking and is comprised of four defense NIP programs and eight nondefense NIP programs. The MIP supports military operational and tactical levels of planning and operations and is comprised of 10 MIP programs. Six U.S. intelligence community (IC) components have both MIP and NIP funding sources.

While the Pentagon and the Office of the Director of National Intelligence (ODNI) do not publicly detail how they spend the billions they are appropriated each year for intelligence, they do release two figures each year: how much they requested and how much Congress approved.

This week the Pentagon announced that the FY18 appropriations for the MIP (including Overseas Contingency Operations funding) was $22.1B, an increase of 20% over the FY17 funding level of $18.4B. The administration had requested $20.7B for FY18.

The ODNI said that the NIP budget for FY18 was $59.4B, up 8.7% from the FY17 funding level of $54.6B. The administration had requested $57.7B for FY18.

Retirements, higher office ambitions, promotions, primary losses, and (potential) general election losses will have an impact on committee membership and leadership in the 116^thCongress. Leadership elections could also have an effect. Senate Commerce Committee Chairman John Thune (R-SD) is widely expected to become Majority Whip if Republicans hold their majority in the Senate. If that does happen, Sen. Roger Wicker (R-MS) is the presumptive successor to take that committee’s gavel.

This week House Minority Leader Nancy Pelosi (D-CA) said that if Democrats win control of the House in the midterm elections that she expects all of the ranking members on House committees will become chairs of those committees in the 116th Congress (2019-2020). In addition to the House potentially flipping, there are 55 members (18 Democrats and 37 Republicans) who are not seeking re-election to their House seat in 2018. In the Senate, there are only three Republican members (Hatch-UT, Flake-AZ, and Corker-TN) who are retiring at the end of this Congress. Hatch is currently the chair of the Senate Finance Committee. Sen. Grassley (R-IA) is next in line for that gavel, but he may opt to keep his chair of the Judiciary Committee. If he does stay at Judiciary, Sen. Crapo (R-ID) is the next most senior Republican. Sen. Corker is the chair of the Senate Foreign Relations Committee. Sen. Risch (R-ID) is the next most senior Republican on that committee.

To help you keep track of all of these potential committee changes, Vantage Point Strategies updated its House and Senate committee charts indicating members who are retiring, lost in their primary, or are running for higher office. Also noted are committee chairs that are term limited at the end of 2018 as well as members who have previously been the chairs of those committees and, thus, are not eligible to be chairman again. Only Republicans have term limits for committee chairs. In the House, members are limited to a total of six years as chair or ranking member. In the Senate, Republican senators can serve six years as chair andsix years as ranking member.

In the Senate, there are a number of Republican chairs that will reach their six-year limit at the end of 2020 (if Republicans retain control of the Senate in the 116^thCongress). Of these chairs, the following are also up for re-election in 2020: Roberts (R-KS), Enzi (R-WY), Alexander (R-TN), and Collins (R-ME). Term limits may or may not be a factor in their re-election decision.

House Committees

https://www.vantagepointstrat.com/115th-congress-house-committees-10-16-18/

Senate Committees

https://www.vantagepointstrat.com/115th-congress-senate-committees-10-17-18/