House GOP Draft FY17 CR Released (Dec. 6)

A couple of hours ago, House GOP leaders released a draft FY17 Continuing Resolution — must-pass legislation if the federal government is to avoid a shut-down midnight on Friday.  The House will take up the bill as early as Thursday, aiming to get it to the Senate by the Friday deadline.

Below is an outline of the stopgap spending measure, its prospects, what it means for spending into the new year, and the delicacy of its term vis a vis the incoming administration.

Best,

Dana

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The CR

The CR extension provides for the continuation of the current discretionary funding levels as per the FY16 budget.  USG spending would remain at $1.07 trillion — below the federal government’s strict spending (aka Sequester) caps, with a slight boost to defense spending and bipartisan health programs.

Procedural hurdles remain.  Sen. Durbin:  “If the ordinary course of events take place in the Senate we’re not going to have it done by Friday night, which means there needs to be an extension absent an agreement.”

  •   “Buy American” Provision

The bill includes a contentious “Buy American” provision, which would require projects to use some American produced goods such as steel.  The provision is opposed by some Republicans, while Trump has backed the concept.  Some Republicans want funding for the “Buy American” language stripped.

  •  Waiver for Mattis

GOP leaders decided late in the negotiations to include a provision that eases the restrictions for retired military members to be confirmed, which would uniquely and immediately help President-Trump’s Defense secretary pick, former Gen. James Mattis, who has been out of active military duty fewer than the currently required seven years.  Mattis retired in 2013. Current rules require a retired service member to have been out of the military for at least seven years before filling the Pentagon’s senior civilian position unless Congress approves a waiver.   This is a sticking point for many Democrats, who are opposed to the rule change

  •  Displeasure with Defense  

Secretary of Defense Carter, Senate Armed Services Chair McCain and several House Republicans that the CR, which freezes caps for another 3.5 months, will hurt the armed forces and their ability to operate effectively.  Some GOP Senators. have said that they would prefer an omnibus for the new year, allowing flexibility in spending and focus to be put on vetting Trump’s appointees.

Defense spending would receive a boost, however, through the overseas contingency fund. The Department of Defense and the State Department will share an $8 billion increase in funding, above the current caps on discretionary funding.

  • Ex-Im Bank

The bill has a provision allowing the Export-Import Bank to operate at full capacity for the first time in more than a year.  Some Republicans in Congress have refused to approve new members to fill three open positions on the Bank’s five-member board of directors.  It cannot vote to allow new loans worth more than $10 million unless at least one of the open positions is filled.  Democrats are working with some in the GOP to drop the three-member quorum rule, a move that conservatives strongly oppose.

  •  Funding for Flint

The bill also ends a lengthy funding fight over the lead poisoning water crisis in cities like Flint, Mich. The bill includes $170 million in grants for drinking water safety and a lead exposure registry.  The Flint water crisis has long been linked to another funding battle over…

  •  Flood Relief

The flooding relief package totals $4.1 billion, which includes $1.8 billion in block grants to rebuild communities, $1 billion for projects to avert future storm damage and $1 billion to fix damaged highways.

  •   21st Century Cures Act

Includes $872 million in funding for the bipartisan medical cures bill, known as 21st Century Cures Act.

CR Term and the 2017 Agenda

The  CR as drafted runs through April 28, allowing the incoming Donald Trump administration to take an active role in negotiations this spring.  Speaker Ryan said that the House leadership decided to extend a CR instead of drafting an omnibus to allow the new administration to weigh in on the FY17 budget process early in his first year.

The Ryan said yesterday that the major time consideration was the Senate calendar, which will be filled with approving Trump nominees in the early months of 2017.   Most close to the deal have said that the CR will be extended through March, but some on the Senate side feel that it might need to pushed into April to allow the Senate adequate time to work a FY17 budget into their schedule.

FY18 — Endless Possibilities

Some speculate that Trump will not actually propose a budget next year, and instead will choose to work with Congress’ drafts instead. While the Congressional Budget Act requires Trump to put forward his budget proposal between January 2 and February 6, he could argue that that task was the responsibility of Obama, not his.

This has several advantages for Trump, which make the idea tempting:  No budget means no platform to challenge, making it much harder to fight Trump’s ideas without them laid out together. Trump’s unrealistic expectations for growth, unemployment and deficit reduction will be easier to back away from, and he can avoid formally writing out exactly how much his tax cuts and spending will increase the deficit.

GOP leaders will now have about three months to work with Trump to craft a sprawling government spending package for fiscal 2017 by next spring.  Senate leaders worry that it would be difficult early next year to write a new spending bill while simultaneously working to vet and approve Trump’s Cabinet appointments and some of the party’s top legislative priorities.

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