Appropriations Move Ahead

Congress has started the new fiscal year as it usually does with a short-term bill. However, full appropriations may not be enacted until next spring. And yet, another stimulus bill may infuse more money into technology programs.

Congress and the White House agreed to a short-term bill to fund the federal government and all its activities through mid-December, removing a contentious, must-pass issue from the list of pending items that might get enacted before the election. Talks are ongoing regarding another COVID-19 stimulus package, and House Democrats revised and passed their proposal without a single Republican vote.

Last week, the President signed a continuing resolution (CR) into law that would keep government agencies and departments funded at the same level as the previous fiscal year that ended on 30 September. It is customary in most years to pass a short-term CR to give the two bodies more time to work out a final package. However, it bears note that in the last two elections in which the White House changed parties (2008 and 2016), regular appropriations were kicked well into the next calendar year resulting in long-term CRs passed after the election. So, if former Vice President Joe Biden wins next month’s election, FY 2021 appropriations may not get sorted until next spring.

As noted, the “Continuing Appropriations Act, 2021 and Other Extensions Act” (H.R.8337) extends FY 2020 appropriations until December 11, 2020 at the same level that departments and agencies were funded in FY 2020 with some exceptions (aka anomalies.) There was the customary bar on using these funds for any programs or activities not approved for FY 2020, meaning any new programs proposed for FY 2021 could not be funded. This prohibition includes the Department of Defense (DOD), and the CR explicitly bars the use of funds provided for

(1) the new production of items not funded for production in fiscal year 2020 or prior years;
(2) the increase in production rates above those sustained with fiscal year 2020 funds; or
(3) The initiation, resumption, or continuation of any project, activity, operation, or organization (defined as any project, subproject, activity, budget activity, program element, and subprogram within a program element, and for any investment items defined as a P–1 line item in a budget activity within an appropriation account and an R–1 line item that includes a program element and subprogram element within an appropriation account) for which appropriations, funds, or other authority were not available during fiscal year 2020.

The CR also bars the use of DOD funds “to initiate multi-year procurements utilizing advance procurement funding for economic order quantity procurement unless specifically appropriated later.”

As noted, the CR does allow some departments and agencies to have more funds for specified programs via so-called anomalies, and some of the more notable ones are:

  • $1.4 billion for the Rural Water and Waste Disposal Program
  • Language allowing the Department of Agriculture to spend at a level sufficient to ensure that a program to feed needy children during the summer is ready in 2021
  • A provision allowing the Commodity Supplemental Food Program to continue feeding low-income seniors, women, infants, and children aged six and below
  • $1.5 billion for the Bureau of the Census
  • “The Navy may enter into a contract, beginning with fiscal year 2021, for the procurement of up to two Columbia class submarines…in an amount not to exceed $1.62 billion.”

The CR also carried an extension for the current surface transportation bill that was set to expire on September 30, 2020 that funds programs at the current level until September 30, 2021 to give Congress more time to pass a full surface transportation reauthorization. $14.6 billion is appropriated to supplement Highway Trust Fund proceeds, and the Airport and Airway Trust Fund would also get an infusion of $14 billion to fund Federal Aviation Administration programs. The package also has Medicare and Medicaid extenders. There is also an extension of the “Antitrust Criminal Penalty Enhancement and Reform Act of 2004” “to strengthen public and private antitrust enforcement by providing incentives for antitrust violators to cooperate fully with government prosecutors and private litigants through the repeal of the sunset provision.”

Finally, the CR extends the Pandemic EBT program, the waivers for the National School Lunch Program and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), and the administrative flexibility provided to states for the Supplemental Nutrition Assistance Program (SNAP).

On a party line vote, the House passed a slimmer version of the “HEROES Act,” the Democratic stimulus package. This bill would make available $2.2 trillion in comparison to the $3.4 trillion package passed in May. However, just because this bill passed the House does not mean another COVID-19 stimulus package would look like this. Speaker of the House Nancy Pelosi (D-CA) is still in negotiations with Secretary of the Treasury Steven Mnuchin, and the White House is also negotiating with Senate Republicans who generally favor a smaller bill. It is unclear whether these different stakeholders will reach agreement before the election.

According to the House Appropriations Committee summary, the HEROES Act would fund the following technology programs:

  • Elections – $3.6 billion for grants to states for contingency planning, preparation, and resilience of elections for Federal office.
  • Broadband – $12 billion to close the homework gap by providing funding for Wi-Fi hotspots and connected devices for students and library patrons, $3 billion for emergency home connectivity, $200 million for telemedicine grants, and $24 million for broadband mapping.
  • General Services Administration Technology Modernization Fund – $1 billion in funding for technology-related modernization activities to respond to coronavirus.
  • House of Representatives – $37 million to support expanded House operations such as tele-town halls, video conferencing, remote hearings, and cybersecurity. Funding will also support changes to Member office space, such as providing plastic barriers.
  • Senate– $6.345 million for teleworking and IT needs as well as funds to supplement daycare operations.
  • E-Rate Support for Wi-Fi Hotspots, Other Equipment, and Connected Devices During Emergency Periods Related to COVID-19. Authorizes a temporary disbursement to be administered through the Federal Communications Commission’s (FCC) E-rate Program for schools and libraries to provide internet service in a technologically neutral way to students and teachers, prioritizing those without internet access at home. It allows authorized funding to be used for internet service and providing connected devices, like laptops and tablets, Wi-Fi hotspots, modems, and routers, to students and teachers to help keep them in the digital classroom during the COVID-19 pandemic. Five percent of the emergency funds authorized are set aside to help serve schools and libraries that serve people living on tribal lands.
  • Benefit for Broadband Service During Emergency Periods Relating to COVID-19.Entitles households in which a member has been laid off or furloughed, among other households that will be eligible, to get a $50 benefit, or a$75 benefit on tribal lands, to put toward the monthly price of internet service during the COVID-19 public health emergency. Internet service providers would be required to provide eligible households service at a price reduced by an amount up to the emergency benefit, and those providers can seek a reimbursement from the FCC for such amount.
  • Continued Connectivity During Emergency Periods Relating to COVID-19. Prohibits broadband and telephone providers from terminating service due to a customer’s inability to pay their bill because of financial hardships caused by the COVID-19 pandemic or imposing late fees incurred because of hardships caused by the COVID-19 pandemic. It also prohibits broadband providers from employing data caps or charging customers from going over data caps and requires them to open Wi-Fi hotspots to the public at no cost during the COVID-19 public health emergency.
  • Requirement for Confinement Facility Communications Services, During the Covid-19 Pandemic and Other Times. Sets a mandatory, immediate, interim cap on all rates charged in connection with voice calls and video calls made to or from prisons or jails —both for calls within a state and calls between states — of .04 cents per-minute for debit calls and .05 cents per-minute for collect calls. It also gives the FCC the authority to set rates in connection with voice calls and video calls in prisons and jails both for calls within a state and calls between states. Finally, it requires the FCC to adopt rules to replace the mandatory interim caps within 18 months of passage and to review those rates every two years. Prohibits prisons or jails from charging site commissions.
  • Preempts any state law that permits a higher rate for voice or video calling but allows state laws mandating a lower rate to persist.

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What’s PAYGO; And, First Cracks In Budget Deal Kumbaya

For those afflicted individuals like me who actually read legislation, one may have stumbled upon some intriguing language in the “Bipartisan Budget Act of 2019” (P.L. 116-37):

Effective on the date of the enactment of this Act, the balances on the PAYGO scorecards established pursuant to paragraphs (4) and (5) of section 4(d) of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 933(d)) shall be zero.

Consequently, as of August 2, the PAYGO scorecards are now set at zero, which is easy enough to understand on one level. But, what does this actually mean? Well, let’s find out.

First of all, there are actually three PAYGOs that are related but distinctly different: the House’s, the Senate’s, and the U.S. Code section. They are similar but have significant differences that bear some discussion. But, as a threshold matter, it’s fair but perhaps simplistic to say that PAYGO is to mandatory funding and revenue as spending caps are to discretionary funding. It’s a means by which the White House and Congress aren’t able to blow up the country’s finances by increasing mandatory funding or by cutting revenues. If this happens, then a sequester kicks in to cut many mandatory funding accounts by the amount mandatory funding has been increased or revenue has been cut.

In the House, earlier this year, Democrats revived a dormant PAYGO rule that had lapsed during Republican rule in favor of their CUTGO rule. See Rule XXI, Clause 10. Simply put the PAYGO rule provides that mandatory funding cannot be increased and/or revenues cannot be cut without corresponding changes to ensure that such legislation is budget-neutral (i.e. does not decrease the amount of money the government will take in on a net-basis and does not increase the amount of money also on a net-basis.) Moreover, unlike the previous PAYGO rule that was scrapped after the 111th Congress, the new PAYGO rule covers off-budget mandatory spending, the most notable program of which falls under the classification being Social Security. And yet, PAYGO does not apply to discretionary funding, and, yet, like almost all House rules, it can be waived by a majority vote, allowing the party controlling the chamber to break this rule as they please. Additionally, PAYGO does not apply to legislation designated as “emergency,” and there is an exception that allows the House to circumvent the rule if a bill is added to a House-passed bill upon engrossment of the legislation at which point only the PAYGO assessment of the latter bill is used for the two combined bills.

In the Senate, the chamber’s PAYGO rule has been in existence since the early 1990’s and has undergone a number of changes, the most recent in 2017. Section 4106 of H.Con.Res. 71, Budget Resolution for FY 2018. The Senate’s PAYGO rule also bars the consideration of legislation that increases mandatory spending or decreases revenue during the budget window. Their version provides:

It shall not be in order in the Senate to consider any direct spending or revenue legislation that would increase the on-budget deficit or cause an on-budget deficit for [periods of 6 and 11 years]

Again, this only pertains to on-budget funding, and so any off-budget accounts are exempt. The Senate may also waive or suspend PAYGO, but it requires 3/5 majority of all duly chosen and sworn Senators to do so (usually 60.)

The statutory PAYGO came into being in 2010 as part of the deal to lift the debt ceiling in P.L. 111-139 and was enacted per Title I of the bill (aka the “Statutory Pay-As-You-Go Act of 2010”). Looking back to 2010, the Obama White House and Congressional Democrats were looking at a federal balance sheet hemorrhaging cash because of the Great Recession and sought to return the government’s finances to the constraints implemented in the early 1990’s when PAYGO was first instituted. Arguably, PAYGO was part of the solution in helping the U.S. realize budget surpluses at the end of the 20th Century. And, Democrats (and, let’s face facts, it was almost only Democrats voting for the bill) were upfront about their intentions with Title I: “The purpose of this title is to reestablish a statutory procedure to enforce a rule of budget neutrality on new revenue and direct spending legislation.”

The statute provides ““PAYGO legislation” or a “PAYGO Act” refers to a bill or joint resolution that affects direct spending or revenue relative to the baseline.” It can also refer to discretionary spending that has a net negative effect on mandatory spending “if such provisions make outyear modifications to substantive law, except that provisions for which the outlay effects net to zero over a period consisting of the current year, the budget year, and the 4 subsequent years shall not be considered budgetary effects.” In any event, if legislation is enacted that violates PAYGO, OMB is required to issue a dreaded sequestration order to institute across-the-board cuts to all non-exempt mandatory funding (e.g. Medicaid, farm subsidies, SNAP, etc.) Since the statutory PAYGO doesn’t cover off-budget funding, Social Security and other programs wouldn’t be effected by a sequester.

In a section-by-section the chairs of the House and Senate Budget Committees inserted into the Congressional Record during debate, they provided the following explanation:

Budgetary effects are defined as the amount by which PAYGO legislation changes mandatory outlays or revenues relative to the baseline. The budgetary effects of changes in tax or mandatory spending law are measured relative to what revenues or mandatory spending would otherwise have been if not for the legislation, as measured by the baseline (as defined in section 257 of BBEDCA). Off-budget effects (i.e., Social Security trust funds and the Postal Service fund) and debt service are not counted as budgetary effects.

The chairs made another interesting point regarding changes in mandatory funding as part of appropriations bills possibly being subject to PAYGO:

Legislation subject to PAYGO also includes provisions in annual appropriations bills that change revenue or mandatory spending law in appropriations bills. Changes in mandatory spending law are considered discretionary in the current and budget years because the Appropriations Committees can offset the costs or use the savings by adjusting funding levels for discretionary programs in those years. But mandatory spending provisions in appropriations bills having outyear budget authority effects–that is, effects in those years after the budget year–are considered PAYGO legislation.

OMB is to maintain two publicly available PAYGO scorecards based on Congressional Budget Office (CBO) estimates of the effect of legislation subject to PAYGO. These CBO estimates are supposed to be entered into the Congressional Record by the chairs of the Budget Committees, but this doesn’t always happen, and if it doesn’t, OMB performs the calculations of whether legislation has resulted in an increase in mandatory funding or a reduction in revenues. For example, the most recent PAYGO scorecard was based on OMB’s estimates.

OMB explained the process:

Within 14 business days after a congressional session ends, OMB issues an annual PAYGO report and determines whether a violation of the PAYGO requirement has occurred. If either the 5- or 10-year scorecard shows net costs in the budget year column, the President is required to issue a sequestration order implementing across-the-board cuts to nonexempt mandatory pro-grams by an amount sufficient to offset those net costs.

Coming forward to the current Congress, OMB has posted the June 2019 scorecard showing a possible sequester of $3.218 billion, mainly because of scorecard balances carried over from the 115th Congress. But, of course, when OMB updates the PAYGO scorecard, per the “Bipartisan Budget Act of 2019,” the balance will be set to zero for both the five and ten year budget windows, which wipes the slate clean for the current Congress. Consequently, the balances shown on the most recent PAYGO scorecard have just been wiped clean as well as any potential PAYGO effects from the budget deal that lifted the FY 2020 and 2021 caps. It seems obvious that when Congress resets the PAYGO scorecards, they are not honoring the spirit of PAYGO. If I can change my scale, then weight gains would disappear, in a sense, right?

In the same vein, it must be mentioned that PAYGO didn’t stop Congress from adding more than $1.5 trillion in debt with the 2017 tax bill Republicans and the White House herald as their most significant legislative achievement. And, this was not the only time PAYGO Has been waived. Likewise, PAYGO was allowed to lapse when the George W. Bush Administration and Republicans pushed through their tax cut package and Medicare Part D drug prescription plan.

So, not surprisingly, PAYGO is only as good as Congress and the White House’s honoring of the rules in the House and Senate and on OMB’s scorecard.

On a different note, the budget ceasefire between the White House and Congress seems to be ending. The White House is proposing to begin the process to rescind a reported $4.3 billion in FY 2019 foreign aid funding appropriated to the Department of State and United States Agency for International Development (USAID). Normally, the funds are impounded, or set aside, for 45 days until either Congress passes legislation agreeing to rescind funds or fails to do so at which point the funds are released and are to be spent per the intent of Congress. The White House knows it cannot get a rescission bill through the Congress, but instead they are hoping to have the funds impounded through the end of the fiscal year, which ends on September 30, and then State and USAID will not be able to spend the funds. Correction: On August 3, the White House told State and USAID to essentially not use the funds in question until they provide an accounting in this letter. While this is not a rescission or impoundment request, this reapportionment of FY 2019 functions to freeze these funds.

This proposal has not been submitted to Congress, but Democrats and Republicans have already sent a number of letters urging the White House not to do this not least of which because the Government Accountability Office (GAO) issued a legal opinion in December 2018 finding asserting that the agencies in this situation would still receive the funding. The GAO determined that

the statutory text and legislative history of the Impoundment Control Act of 1974 (ICA), Supreme Court case law, and the overarching constitutional framework of legislative and executive powers provide no basis to construe the ICA as a mechanism by which the President may, in effect, unilaterally shorten the availability of budget authority by transmitting rescission proposals shortly before amounts are due to expire.

Here are the letters:

It is quite possible this will result in more litigation as the Administration pays little heed to norms and laws when they impede their policy goals. Besides, there are likely a million ways to work behind the scenes to keep funds from State and USAID even if the Administration loses the battle.

Of course, this is the White House looking to set the terms of political debate through driving the news cycle in ways they think favorable to Trump’s reelection. His base hates foreign aid, which is considered a giveaway to other countries, and regardless of whether this moves succeeds, it has the benefit of drawing a distinction between Trump on the side of his base in trying to stop foreign aid “welfare” and be fiscally responsible, and the Democrats who care more about foreigners than they do “average” Americans. Whether this spills over in the larger FY 2020 appropriations debate remains to be seen.

Appropriators Have Work To Do

Now that Congress and the White House have agreed on the FY 2020 top line numbers for defense and non-defense discretionary spending, both the House and Senate need to adjust the numbers they have put forth as their working caps.

The House did not pass a budget resolution and instead passed a deeming resolution (H.J.Res. 293) in April that functions in much the same way with respect to setting the top-line numbers for appropriations. During debate on the deeming resolution, Representative James Morelle (D-NY) explained the caps put forth by Democrats:

In fiscal year 2020, defense spending would be capped at $664 billion, with nondefense discretionary spending capped at $631 billion. The Investing for the People Act (H.R. 2021) would also provide up to $8 billion, annually, for nondefense overseas contingency operations, OCO, activities that do not count against the spending caps, while limiting OCO designation of defense spending in 2020 and 2021 to no more than the fiscal year 2019 level of $69 billion dollars.

In my this post, I detailed the new spending caps under the as the “Bipartisan Budget Act of 2019” (P.L. 116-37) raised the caps

  FY 2020 FY 2021
Defense (aka Security) $666.5 billion $671.5 billion
Non-Defense (aka non-security) $621.5 billion $626.5 billion

For FY 2020, House Democrats will need to trim roughly $10 billion from the non-defense side of appropriations and slightly boost for the defense side. The House Appropriations Committee will need to trim the non-defense funds from the bills with non-defense funding, and it is not immediately clear what their approach will be. Is an across-the-board reduction equitable? Or should the committee eliminate funds based on need and priorities? I’d say it is likely to be the latter approach, but the process for how the House does this is not clear beyond the Appropriations Committee reporting a new 302(b) allocation. Will the Appropriations Committee essentially draft new bills and hold them until the Senate has finished work on their bills all the while negotiating on final numbers for programs? This seems like the likeliest outcome although it is possible the House could bring new bills to the floor, but I suspect they wouldn’t do so unless there was some leverage to be gained against or pressure exerted on the Senate.

In the other body, appropriators are more or less working from a blank slate as Senate Majority Leader Mitch McConnell (R-KY) prevailed upon Senate Appropriations Committee Chair Richard Shelby (R-AL) to not begin the appropriations process until agreement had been reached on top-line numbers. Undoubtedly, the committee has bill language and report language that has been negotiated on; all that was missing was the top-line funding numbers. Having said that, it didn’t exactly take a crystal ball to project a reasonable range of top-line funding numbers and work from those. I’m assuming this is, in fact, what happened, and so the committee may hit the ground running next month.

While the Senate did not pass a budget resolution as McConnell undoubtedly wanted to protect those Senate Republicans up for reelection from uncomfortable votes, the Senate Budget Committee did mark up a budget resolution. In S.Con.Res. 12, the Senate Budget Committee set the following caps in FY 2020: $576 billion for defense (plus the majority of $67 billion in OCO funds) and $542 billion for non-defense. Consequently, the Senate has just gained a huge amount of breathing room on both sides of the discretionary divide, and yet, because the Senate Appropriations Committee has not marked up any bills, the process of effecting the new caps will be somewhat easier. In any event, the nominal, not-real numbers the Senate started with will be adjusted upwards by $90 billion on the defense side of the ledger and $79 billion for non-defense.

Opening the aperture on appropriations reveals an uncertain view. Sure, we have top-line numbers, but will Fox News rile up the President after Republicans and Democrats have reached agreement on full-year appropriations for FY 2020. However, more immediately, it seems unlikely we will have all 12 bills enacted before the end of FY 2019 on September 30 and has been common practice there will almost certainly be a continuing resolution (CR) for some portion of the federal government through December. It’s just a question of which agencies will have FY 2020 appropriations in place and which will be operating under a CR, which does cause some problems. In any event, it will quite the ride as always.

Budget Deal Reached; Battle Over FY 2020 Appropriations Continues

As has been widely reported in the media, Congress and the White House agreed on a deal to raise the FY 2020 and 2021 budget caps and suspend the debt ceiling until July 2021. Ostensibly, this clears the way for Congress to send appropriations bills to the White House in September when the two chambers reconvene. However, there is still plenty of room for the appropriations process to go awry, especially if the White House rightly or wrongly sees political advantage in taking a stand on something like a border wall again as it did earlier this year.

Last week, the House passed the “Bipartisan Budget Act of 2019” (H.R. 3877) by a 284-189 vote with 65 Republicans voting to pass the package and 16 Democrats voting no. The Senate then took up and passed the bill today by a 67-28 vote with the five Democrats who participated in the Democratic debates not voting.

The caps as reset when the so-called Super Committee failed to deliver a package of $1.2. trillion in funding cuts:

  FY 2020 FY 2021
Defense (aka Security) $576 billion $590 billion
Non-Defense (aka non-security) $542 billion $555 billion

Under the “Bipartisan Budget Act of 2019” the new caps would be:

  FY 2020 FY 2021
Defense (aka Security) $666.5 billion $671.5 billion
Non-Defense (aka non-security) $621.5 billion $626.5 billion

And, here is the difference between the original and the new caps:

  FY 2020 FY 2021
Defense (aka Security) +$90.5 billion +$81.5 billion
Non-Defense (aka non-security) +$79.5 billion +$71.5 billion

There’s plenty here for both sides to claim victory. Congressional Republicans get a higher defense top-line, an agreement that allows appropriations to move forward, support from the President, a relatively painless debt limit increase, and no parity for defense and non-defense funding. Congressional Democrats got substantial increases for non-defense funding whereas the President’s DOA FY 2020 budget request would have slashed non-defense funding, a relatively painless debt limit increase, and buy-in from the White House and President, which brought along Republicans terrified of there being any daylight between them and Trump (e.g. Senate Majority Leader McConnell (R-KY)).

However, now that the spending caps and debt limit hurdles have been cleared, it is uncertain at best whether appropriations will be enacted by the beginning of FY 2020 (i.e. October 1). While the House has passed 10 of the 12 bills, the Senate Appropriations Committee has not even set its 302(b) allocations let alone mark up actual bills. However, I’m doubtful the committee has been idle; it wouldn’t shock me if they’re able to move bills very quickly to the floor. Beyond that, it’s not clear how well that works. I think a continuing resolution (CR) funding some portion of the government may be likely into the latter part of the year. Of course, even if Congress reaches agreement with sign-off from the White House, a Fox segment on such a deal could blow it up once Trump decides there’s advantage to be had in holding everything up in the name of what he and his base consider security on the U.S.-Mexico border.

Another bigger picture question is whether the Democrats will agree to caps on discretionary spending going forward once this deal expires. It is likely the current battle lines that informed this and past budget deals will extend into future talks. The only variable will be the fortifications and arms available to each party in each chamber. However, the leverage granted by the “Budget Control Act of 2011” (BCA) (P.L. 112-25) will be gone. It should be interesting to see what happens in calendar year 2020.

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.

FY 2020 Appropriations Starting

It’s a been a while.

In any event, it’s a big week. The House Appropriations Committee begins work on FY 2020 appropriations bills even though top-line numbers haven’t entirely been decided in the Democratic Caucus, and the Congressional Budget Office (CBO) releases its revised baseline on this coming Thursday, May 2.

This week’s House Appropriations Committee markup schedule is

Over in the Senate, the Appropriations Committee will hold these hearings:

Subcommittee Hearing: Review of the FY2020 Budget Request for the Department of Homeland Security   05/02/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for Department of Labor   05/02/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for the U.S. Nuclear Regulatory Commission   05/01/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for NASA   05/01/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for the Navy and Marine Corps   05/01/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for the Indian Health Service   05/01/19 09:30AM
Subcommittee Hearing: Review of the FY2020 and FY2021 Budget Request for the VA   04/30/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for USAID   04/30/19 02:30PM

Also, Senate Appropriations Committee Chair Richard Shelby (R-AL) said yesterday that his committee will not work on their appropriations bills until there is a deal in place on the caps. He remarked that “[t]hat’s what we’d like to do because we’d have more certainty.”

Of course, where the caps are ultimately set is a major stumbling block in enacting FY 2020 appropriations. At present, the caps for defense funding would be $576 billion (without uncapped Overseas Contingency Operations (OCO) funding) and non-defense $542 billion (without OCO, Disaster relief, and other adjustments). House Democrats are split on how much to raise the caps, but House Appropriations Committee Chair Nita Lowey (D-NY) seems to be willing to work with the cap adjustments in the “Investing for the People Act of 2019” (H.R. 2021) of $664 billion for defense (plus $69 billion for defense OCO for a total of $733 billion) and $631 billion for non-defense (plus add ons pushing the cap up to $662 billion.) Consequently, House appropriations bills will likely meet those top lines as reported out of committee.

The Senate Budget Committee, however, opted to remain with the current cap levels for FY 2020 with the hopes that a deal will soon be reached for both FY 2020 and FY 2021. Their budget resolution, S.Con.Res.12, would keep the FY 2020 caps of $576 billion for defense and $542 for non-defense.

There’s still a supplemental appropriations bill floating that Congress hasn’t passed, which seems to be held up on whether Puerto Rico would receive more funding to recover from Hurricane Maria. However, the White House opposes more funds, and Democrats are insisting on it. Hence, an impasse even though a number of the states waiting on relief via supplemental appropriations for FY 2019 include states Trump will need to carry in 2020, including Florida, Georgia, and Iowa.