Weekly Legislative Report May 5, 2017

source: Capital Decisions Newsletter
J.R. Reskovac
Sarah Strup Herbert

Appropriations/Budget

The fiscal 2017 omnibus bill (HR 244) was released early Monday and passed the House on Wednesday by a vote of 309-118.  Senators on Thursday voted 79-18 to clear the $1.07 trillion spending package, sending it to the White House for signature.  President Trump signed the bill into law this afternoon.

Below is a look at which agencies fared the best and worst under the spending agreement.

Winners:

  • National Institutes of Health (6.3% increase) – In Trump’s FY18 budget, he proposed an 18% cut to NIH.  Congress largely ignored the proposal and increased NIH’s FY17 funding by $2 billion, to $34 billion. The measure would boost spending specifically on Alzheimer’s disease, precision medicine and other research.
  • Department of Transportation (3.7% increase) – Overall, Transportation would receive $19.1 billion, a $681 million boost.  Within the DOT, the Federal Railroad Administration would receive a 10 percent spending increase and the Transportation Investment Generating Economic Recovery (TIGER) grant program, an Obama initiative Trump has proposed eliminating, would be fully funded.
  • Department of Homeland Security (3.5% increase) – Lawmakers declined to provide any funding for Trump’s proposed physical wall along the U.S.-Mexico border.  Instead, Congress increased spending by just $1.1 billion to boost hiring for immigration enforcement and border security.
  • Department of Defense (3.5% increase)- The Pentagon would receive $516 billion in discretionary spending and an additional $77 billion for overseas contingency operations. In addition to a $5.8 billion boost Defense already received through a supplemental to a previous CR, the department would receive a total increase of 4.5 percent compared to FY16. 
  • FBI (3.3% increase)- While the Justice Department would absorb a net cut overall, the FBI would receive a $277 million spending boost to go toward fighting cybercrime, counterterrorism and other programs and the bureau will receive more than $300 million to build a new headquarters.

Losers:

  • General Services Administration (13.3% decrease)- GSA would face the largest cuts of any major agency with funding decreasing by $1.35 billion. Lawmakers said the major reductions would take place in the agency’s new construction accounts.
  • Department of Agriculture (2.9% decrease)- USDA had a $623 million reduction in discretionary spending.  However, Rural Development and the Farm Services Agency would receive a funding increase under the omnibus bill despite being targeted in Trump’s budget for cuts.
  • Department of Education (1.7% decrease)- Education would absorb cuts to its Innovation and Improvement programs and effective instruction grants.  Democrats were able to block Republican efforts to prevent enforcement of Title IX laws with respect to transgender student access to bathrooms.
  • State Department (1.1% decrease)- There is $53.1 billion in funding for State operations, U.S. Agency for International Development and foreign assistance under the bill, including $16.5 billion in overseas contingency spending.  Most of the decrease would come from a $683 million cut to payments for the United Nations and other international organizations.
  • Environmental Protection Agency (1% decrease)- Despite Trump’s proposed 31% cut to EPA in FY18, EPA will receive a little over $8 billion.  This is the first step in what will likely be more steep cuts in FY18.  The agency is currently offering early retirement and buyout incentives and would be capped at 15,000 employees, its lowest level since 1989.  EPA’s research and regulatory programs would see a $52 million cut.

Education

The House Oversight and Government Reform Committee held a hearing this week on the online FAFSA system breach that impacted families applying for federal student aid.   IRS, Treasury and Education Department officials testified, each of them reflecting blame for the system failures.  Rep. Virginia Foxx, Chairwoman of the House Education Committee chastised the panel and remarked the incompetence of the FSA was on full display.  Mr. James Runcie, Office of Federal Student Aid, said the IRS tool used to apply for federal financial aid will remain unavailable for those seeking help for the 2017-18 school year.

The House Education and the Workforce Committee also held a hearing this week regarding legislation to reauthorize the Carl D. Perkins Career and Technical Education Act that has received bi-partisan support in past Congresses.  The bill simplifies the application process, increases application with today’s in-demand jobs and increases accountability to better evaluate program effectiveness.

Energy/Environment

Ethanol bill

Several Midwestern Republicans are considering holding up a bill to reverse an Obama administration drilling rule in exchange for a vote on a piece of ethanol legislation.

Senators Chuck Grassley (R-IA) and John Thune (R-ND), along with several other Midwestern Republican Senators, are pushing legislation to overturn federal policy preventing gasoline sales with 15 percent ethanol (E15) during the summer months.  The group says it will trade its votes on a resolution undoing a federal methane regulation for the ethanol vote.  The methane regulation is an Interior Department rule forcing energy companies to curb emissions of methane escaping from wells and pipelines on public land.  It aims to discourage the practice of venting and flaring natural gas at oil wells and blocks companies from venting gas except in emergencies, phases down the amount of flaring that is allowed, and forces the businesses to detect and repair gas leaks.

But they’ll need to act quickly; under the terms of the Congressional Review Act, which provides the Senate a window of 60 legislative days to overrule a regulation, the Senate has a May 11 deadline for passing the bill.

Supporters of the methane resolution have struggled to secure the votes they need to move it to the floor and will need to bolster support for the CRA resolution and sidestep the ethanol debate by next Thursday in order to assure the bill’s passage.

Environmental lawsuits

Two environmental groups are suing the Trump administration; the first over last week’s offshore drilling executive order, and the second over the Environmental Protection Agency’s policy putting a hold on Obama’s water pollution limits from coal-fired power plants.

The first lawsuit is led by environmental law firm Earthjustice, and says President Trump cannot roll back drilling prohibitions that former President Barack Obama instituted in the Arctic and Atlantic oceans because they are permanent.

The second lawsuit is from a coalition of environmental groups saying the EPA should have sought public input before rolling back standards that could allow millions of pounds of toxic pollution to be dumped into waterways.

Healthcare

Yesterday, the House passed an amended version of the American Health Care Act (AHCA) by a vote of 217 – 213.  House passage came after Rep Upton (R-MI), former chairman of the House Energy and Commerce Committee, and Rep Long (R-MO) offered an amendment to provide $8 billion to offset the costs of individuals with pre-existing conditions who cannot afford their insurance premiums.  An amendment negotiated by Rep. MacArthur (R-NJ) during the recent recess that would allow states to waive essential health benefits and community rating requirements if the state has established a high-risk pool, also passed prior to final passage of AHCA.  

All Democrats voted “no” and the twenty Republicans voted in opposition.

The bill now moves to the Senate, where the process may be lengthy and several Senators said yesterday that the Senate will craft its own legislation.  The Senate bill will be developed by a working group of members from the Senate Finance, Budget and Health, Education, Labor and Pensions (HELP) Committees.  Senate HELP Committee Chair Alexander (R-TN) confirmed that the Senate will develop its own package and reporters, “We’ll take whatever good ideas we find there [the House bill] that meet our goals.”

The package developed by the Senate workgroup will likely differ from the AHCA for both procedural and policy reasons.  As you know, many of the provisions in the bill as passed by the House likely cannot move in the Senate on the special reconciliation procedure, which only requires 51 votes for passage.  Additionally, many moderate Senators, especially those from Medicaid expansion states, have expressed concerns with the changes to the Medicaid program in the AHCA.  In a statement, Senator Portman (R-OH) said, “I’ve already made clear that I don’t support the House bill as currently constructed because I continue to have concerns that this bill does not do enough to protect Ohio’s Medicaid expansion population, especially those who are receiving treatment for heroin and prescription drug abuse.  We have an opioid crisis in this country, and I’m going to continue to work with my colleagues on solutions that ensure that those who are impacted by this epidemic can continue to receive treatment.”  

In a statement following the House vote Senate Finance Committee Chair Hatch (R-UT) acknowledged the procedural and policy challenges facing the Senate stating, “As we work to fulfill our promise to our constituents to repeal and replace the law in the Senate, we will be guided by the important principles to address costs and give American families more choices.  At the same time, we will be working to put together a package that reflects our member’s priorities with the explicit goal of getting 51 votes.  Coupled with the constraints imposed by the budget reconciliation process, we must manage expectations and remain focused on the art of the doable as we move forward.”

In terms of timing, Leader McConnell (R-KY) said the Senate will not consider a bill without a Congressional Budget Office (CBO) score, which will provide cost and coverage numbers. Once a score is released, the Senate parliamentarian will review it to see what provisions comply with the reconciliation rules.  CBO’s work and the parliamentarian’s review process could take several weeks, possibly pushing Senate debate until at least June. The score and parliamentarian’s analysis will likely guide the Senate workgroup’s work; Sen. Collins (R-ME) said, “We certainly need the CBO analysis on the impact on cost and coverage before we can produce our own [bill].” 

Reiterating that Senators do not feel pressured to act quickly, Senate Majority Whip Cornyn (R-TX) made clear that the Senate is not under a deadline and said, “When we have 51 Senators we will vote but not until then.”

It is unclear if the House would be able to pass a modified bill when/if it is returned to the chamber for consideration.

Washington Outlook

Next week in Congress, the Senate will ready consideration for nominations to join the president’s administration.  One of the few ready is former Rep. Heather Wilson (R-NM) who is Trump’s pick to be secretary of the Air Force. The Armed Services Committee voted 22-5 to advance her nomination a month ago.  She will get a confirmation vote Monday.  The Senate will next consider Scott Gottlieb, who is picked to be commissioner of the Food and Drug Administration.  Majority Leader Mitch McConnell filed a debate-limiting cloture motion on him Thursday afternoon.

The House will be in recess next week.