Appropriations State of Play

The House is on the verge of finishing work on its 12 appropriations bills while the Senate has passed only a supplemental appropriations bill and will bring another to the floor. Absent an imminent breakthrough on the caps on discretionary spending for FY 2020 and 2021, the word for appropriations will be “impasse” until the end of the year.

Thus far, House Democrats seem to have bridged their internal differences on defense and non-defense spending in passing two of the most contentious bills of any cycle (Labor-Health and Human Services-Education and Defense) and have moved on to the next package.

However, one of the least controversial bills has now become the object of controversy and may prove difficult to pass: the Legislative Branch bill. House Majority Leader Steny Hoyer (D-MD) had reportedly negotiated a deal with Republican Minority Leader Kevin McCarthy (R-CA) and Minority Whip Steve Scalise (R-LA) under which House Members would get their first raise in ten years as a cost of living adjustment. In exchange for the pay raise that Republicans would also receive, the minority party would not attack the majority party on the floor or in the campaign cycle. However, House freshmen Democrats who were narrowly elected in the last election approached Hoyer about pulling the provision from the FY 2020 Legislative Branch bill that was supposed to be part of the first package of bills. They made the case that the optics of giving Members a pay raise given the major issues that have gone unresolved would be terrible and would hamper their reelection efforts.

Members’ salary has been $174,000 per year since 2009 as Congress has opted to block what would otherwise be an automatic annual increase. According to the Congressional Research Service, if Congress had allowed every adjustment to go into effect since the current statute came into effect in 1992, they would now earn $210,900 per year. Moreover, the rate of inflation has eroded the buying power of Members’ salaries by 15% since their last pay raise in 2009. Additionally, the freeze on Members’ salaries also caps the salaries of House staff, none of whom may be paid more than a Member.

In February, the Congressional Budget Office (CBO) projected that the Department of the Treasury would exhaust the measures used to ensure the U.S. does not default on its debts by September or October now that the suspension of the debt limit has gone back into effect. In simpler terms, Treasury can only borrow so much money and the statutory limit on debt caps this amount. As of March 2019, Treasury has hit this limit. Once Treasury has “maxed out” its borrowing abilities, it then starts juggling incoming cash to meet obligations like Social Security payments or bond payments.

Congress and the President will need to raise the debt limit or risk default on U.S. debt with the resulting downgrade on the creditworthiness of the U.S. This will be a major piece of how and when appropriations and spending caps get decided this year as the last few debt limit increases have incurred various degrees of brinksmanship.

And, of course, Republicans and Democrats remain split on what kind of increase in the spending caps they would like for FY 2020 and 2021. See this post for discussion on the spending caps. The former want more defense and less non-defense funding and the latter want the exact opposite. Additionally, the White House seems particularly dug in on increasing funding for national security programs while cutting virtually all other funding. Incidentally, these are the last two years of the caps on discretionary spending instituted under the Budget Control Act of 2011. It is likely that some on the right will begin calling for an extension of the spending caps to maintain fiscal discipline.

In terms of what’s happened, here it is. The House passed the “Labor, Health and Human Services, Education, Defense, State, Foreign Operations, and Energy and Water Development Appropriations Act, 2020” (H.R. 2470) on June 19 by a 226-203 vote.

The House will soon wrap up consideration of the five-bill package of measures (H.R. 3055) that includes the following FY 2020 appropriations bills:

  • Commerce-Justice-Science;
  • Agriculture, Rural Development, and Food and Drug Administration;
  • Interior and Environment;
  • Military Construction and Veterans Affairs;
  • Transportation and Housing and Urban Development

The House still needs to consider three more bills to finish the initial step of passing bills:

  • FY 2020 Legislative Branch
  • FY 2020 Financial Services and General Government
  • FY 2020 Homeland Security

The House Rules Committee met yesterday to consider a rule for the “Financial Services and General Government Appropriations Act, 2020” (H.R. 3351) and the “Emergency Supplemental Appropriations for Humanitarian Assistance and Security at the Southern Border Act, 2019” (H.R. 3401). However, it is not clear when the House will begin consideration of the FY 2020 Homeland Security and Legislative Branch bills.

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