House and Senate Nearing Budget Conference Agreement
House Majority Leader Kevin McCarthy (R-CA) included possible consideration of the budget conference report on this week’s House schedule, and Senate Budget Committee Chairman Michael Enzi (R-WY) said he is optimistic the House and Senate budget conferees can come to an agreement this week, noting he wants it completed “as soon as possible.”
Chairman Enzi confirmed that he and House Budget Committee Chairman Tom Price (R-GA) have worked out many issues in the conference report, but fully offsetting the $141 billion unpaid cost of the Sustainable Growth Rate (SGR) fix was not one of them. The report is expected to include language indicating that the SGR fix should be fully offset in the future, but without a specific plan to do so.
Another point of contention between the House and Senate budget resolutions was $38 billion in additional defense spending included in the Overseas Contingency Operations (OCO) account, which does not count towards the discretionary spending caps. The Senate budget resolution included a point-of-order on the funds, essentially setting a 60-vote threshold for the funding to be spent. In order to placate defense hawks in the Senate, it seems the budget conferees will remove the point-of-order for OCO spending in FY 2016, but include it for FY 2017. John McCain (R-AZ), the Senate’s most prominent defense hawk, has said he would likely vote for the compromise.
One of the final holdups for the conference report involves changes in mandatory programs (CHIMPs). CHIMPs are used to offset increased discretionary spending by reducing or limiting mandatory spending, however they often do not result in actual savings. The FY 2016 Senate budget resolution phases CHIMPs out over time, while the House budget resolution does not limit them; for reference, the FY 2015 Omnibus bill included $19 billion in CHIMPs. This could become an important issue for appropriators, and House Appropriations Committee Chairman Harold Rogers (R-KY) has asked budget conferees to freeze CHIMPs, rather than get rid of them.
Energy-Water and Milcon/VA Appropriations Bills Head to House Floor
The Energy and Water Development (H.R. 2028) and Military Construction and Veterans Affairs (H.R. 2029) FY 2016 Appropriations Bills will be brought to the House floor for debate this week. These two appropriations bills are among the easiest to pass, though they may face contentious floor debate because Democrats are not satisfied with the levels of funding and Republicans have added some controversial riders to the bills.
The Energy-Water Appropriations Bill, at $35.4 billion, passed the Appropriations Committee by voice vote last week. The bill would provide $1 billion more than current funding, with a $1.2 billion increase to discretionary spending, though it is $633 million less than the President requested. During the Committee markup, Democrats unsuccessfully attempted to strip the bill of environmental riders that would block the Environmental Protection Agency and Army Corps of Engineers’ controversial Waters of the United States proposal.
Both appropriations bills will likely be considered under open rule, allowing amendments during floor debate, which could lead to some very late-night votes this week.
Democrats Push for a Budget Deal
House Democrats are considering a strategy to block appropriations bills on the House floor to try to force a budget deal between Republicans and Democrats. The strategy worked earlier this year when Democrats held up the Department of Homeland Security FY 2015 spending bill until Republicans removed immigration riders that would have stopped President Obama’s executive actions on immigration. The strategy carries two potential pitfalls though, Democrats could lose the battle over public opinion if they are seen as obstructionists, or the final spending bills could end up more conservative if Republicans need to secure the votes of fiscal hawks in the House.
President Obama has also signaled his desire for a budget deal, publicly stating he would not sign appropriations bills that hold to the sequester’s strict caps. Office of Management and Budget Director Shaun Donovan wrote to the Appropriations Committee last week, noting the President “has been clear that he is not willing to lock in sequestration going forward, nor will he accept fixes to defense without also fixing non-defense.” Some Republicans have also called for a new budget deal to replace the sequester for FY 2016.
The last budget deal, brokered by Congressman Paul Ryan (R-WI) and Senator Patty Murray (D-WA), gave the Republicans increased defense spending in exchange for increased discretionary spending. However, while support for a budget agreement is increasing, the Republican budgets may have mitigated some of the pressure for a deal by increasing defense spending through the OCO account, circumventing the discretionary caps.
This Week’s Hearings:
- Wednesday, April 29: The Senate Appropriations Committee Transportation, Housing, Urban Development, and Related Agencies Subcommittee will hold a hearing to review U.S. Department of Housing and Urban Development efforts to prevent and end youth homelessness.
- Wednesday, April 29: The House Appropriations Committee Labor, Health and Human Services, Education, and Related Agencies Subcommittee will hold a Public and Outside Witness hearing.
- Wednesday, April 29: The House Appropriations Committee Transportation, Housing and Urban Development, and Related Agencies Subcommittee will hold a markup hearing of the FY 2016 Transportation, Housing and Urban Development Appropriations Bill.
Senate Appropriations Committee FY 2016 Budget Hearings
- Wednesday, April 29: The Defense Subcommittee will hold a hearing on the Budget Request for the National Guard and Reserve.
- Wednesday, April 29: The Homeland Security Subcommittee will hold a hearing on the Budget Request for the Department of Homeland Security.
- Wednesday, April 29: The Interior, Environment, and Related Agencies Subcommittee will hold a hearing on the Budget Request for the Environmental Protection Agency.
- Thursday, April 30: The Labor, Health and Human Services, Education, and Related Agencies Subcommittee will hold a hearing on the Budget Request for the National Institutes of Health.