FY18 Appropriations Update

During a rally speech in Phoenix, AZ this week, President Trump threatened to shut down the government if Congress doesn’t appropriate money for a wall on the Southwest border. The President said, “Build that wall. The obstructionist Democrats would like us to not do it, but believe me, if we have to close down our government, we’re building that wall.” House Speaker Paul D. Ryan (R-WI) responded that he doesn’t want a government shutdown and that he does think a continuing resolution (CR) will be needed to keep the government funded into the new fiscal year beginning October 1.

The House passed HR 3219, the Make America Secure Appropriations bill on July 27, which includes the FY18 Defense, Legislative Branch, Energy and Water, and Military Construction-Veterans Affairs spending bills. The “securitybus” included $1,571,239,000 for the Department of Homeland Security to construct physical barriers along the southwest border of the United States in the Rio Grande Valley of Texas and in San Diego, California. But the Senate appears unlikely to take up this spending package because its allocation for defense spending violates the spending caps set in the 2011 Budget Control Act.

There could be two shutdown showdowns this year – September and December. If Congress passes a clean debt ceiling and short-term CR funding the government through December, there could be another potential shutdown towards the end of the year. President Trump would have to veto any spending measure to trigger a shutdown, but Congress could then override the veto.

While the path to funding FY2018 isn’t clear, one thing that is clear is that the longer Congress “fights” over how to keep the government open, the less time they will be have to work on tax reform.

In other FY18 funding news, White House Office of Management and Budget Director Mick Mulvaney sent a letter to President of the Senate Mike Pence earlier this month notifying Congress that it is the President’s intention to exempt all military personnel accounts from sequestration in FY18, if sequestration is necessary. Mulvaney also writes that this action would mean that non-exempt accounts would then be subject to higher reductions to make up for this exemption.

Mulvaney’s letter to President of the Senate Pence:

https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/Letters/Military_personnel_exemption_senate_transmit.pdf

Status of FY18 Appropriations Spending Bills