FY17 Budget and Appropriations Update – May 13, 2016

FY17 Budget and Appropriations

House

FY17 Budget Resolution

House Budget Committee Chairman Tom Price (R-GA) met with GOP rank-and-file this week in a closed-door conference to discuss a path forward for an FY17 budget resolution. Price proposed pairing in a single bill the $1.07B budget resolution with $30B in new cuts in entitlement programs. Some Republicans expressed cautious optimism after the meeting, but its not clear if enough conservatives will back the bill without a guarantee that the Senate will ever consider it. If House leaders can get enough votes for the plan, the budget resolution would go to the floor next week ahead of any appropriations bills.

House Floor

The House could begin considering FY17 appropriations bills on the House floor next week after the May 15 deadline for a budget or deeming resolution. House Appropriations Committee Chairman Hal Rogers (R-KY) plans on bringing the FY17 Military Construction-Veterans Affairs (MilCon-VA) spending bill to the floor next week as well as a separate Zika supplemental appropriations bill. Rogers will unveil the Zika aid package on Monday. It is likely to appropriate less than the bipartisan Senate agreement of $1.1B in FY16 funding. House Democrats believe the Zika issue is an emergency that doesn’t require offsets, but Conservatives in the House may require that it be paid for. Democrats may also oppose the measure if they consider the amount Roger’s proposes inadequate. While it will be introduced as a standalone bill it could hitch a ride on the FY17 MilCon-VA bill, which would provide procedural protections.

Defense

The House Defense Appropriations Subcommittee marked up its FY17 spending bill this week. The bill provides $517.1B in discretionary funding – an increase of $3B over the FY16 enacted level and $587M below the President’s budget request. The bill also provides $58.6B in Overseas Contingency Operations (OCO) funding – the level allowed under current law. The subcommittee followed the lead of the House Armed Services Committee, which targeted OCO funding to provide additional funds for the base budget. Of the $58.6B in OCO funding, $43B is included to support OCO operations through April 30, 2017. The additional $15.7B is redirected to fund unmet needs within the base budget. The bill will be marked up in full committee on Tuesday.

FY17 Defense Appropriations Bill Text:

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

FY17 Defense Appropriations Draft Report Language:

https://www.vantagepointstrat.com/wp-content/uploads/2016/05/House-FY17-Defense-Appropriations-Report-5-13-16.pdf

Bill Summary:

http://appropriations.house.gov/news/documentsingle.aspx?DocumentID=394520

Senate

The Senate passed its $37.5B FY17 Energy and Water appropriations bill on the Senate floor this week by a vote of 90 to 8 after dispensing with an Iran heavy water amendment offered by Sen. Tom Cotton (R-AR). The amendment was subject to a 60-vote threshold and failed by a vote of 57 to 42. Cotton then withdrew the amendment allowing the Senate to proceed with a cloture vote and final vote on passage. This is the earliest the Senate has passed an appropriations bill in 40 years. Senate Majority Leader Mitch McConnell (R-KY) said that the Senate will continue to consider the FY17 spending bills up until they break in July for the Republican and Democrat Presidential nominating conventions. Up next on the docket is a combined measure that includes the FY17 Transportation HUD and FY17 Military Construction-Veterans Affairs spending bills. The text of the two Senate bills will be offered as amendments to HR 2577, an FY15 Transportation HUD spending bill that passed the House last year but did not go anywhere in the Senate. The Senate has a limited number of those House shell bills left over from last year, which are used to avoid procedural hurdles dealing with the origination of spending bills in the Senate. That scarcity of vehicles has prompted McConnell to combine the transportation and veterans measures into a so-called “minibus” while he waits for the House to begin floor work on appropriations.

Floor action on the bill will also include consideration of amendments providing emergency funding for the Zika virus. While the emergency funding is germane to the bill, the Senate had to employ a complicated procedure to link the House’s FY17 MilCon-VA bill to HR 2577 so that Zika amendments are fair game under Senate procedure. Three Zika amendments are pending in the Senate – one from Sen. Bill Nelson (D-FL), one from Sen. John Cornyn (R-TX), and a bipartisan agreement offered by Sens. Roy Blunt (R-MO) and Patty Murray (D-WA). The first amendment to achieve 60 affirmative votes to limit debate will become the Senate’s floor business for up to the next 30 hours, and will be poised to be added to the Transportation HUD and MilCon VA minibus. Nelson’s amendment seeks $1.9B in emergency funding, while Cornyn’s amendment seeks $1.1B offset by cutting money from the President’s healthcare overhaul. The Blunt-Murray bipartisan amendment would provide $1.1B in emergency funding and is the amendment that is expected to prevail.