FY19 Appropriations Update: A Bunch of Trip Wires

Happy August Recess week. The House will be out the remainder of the month, but the Senate is currently scheduled to return next Wednesday, following Senate Majority Leader Mitch McConnell’s (R-KY) decision to cancel most of the Senate’s August recess. As Fiscal Year 2018 (FY18) appropriations expire on September 30, Congress will need to pass some legislation to continue to fund the government before the midterm elections. In an election year, conventional wisdom is that we will most likely see a continuing resolution (CR) that punts an omnibus appropriations bill to the lame duck or later. However, we are seeing a special effort this year to move a series of minibuses that gives us hope that the House and Senate will try to move as many appropriations measures as possible before the end of the fiscal year.

The hope is that Congress can finish nine of the twelve Fiscal Year (FY19) appropriations bills before the election, and then the final three will go on a CR. Both the House and Senate have moved more aggressively than in recent years to finalize appropriations before the end of the fiscal year. The House reported all bills out of committee before they broke for the August recess, and has passed thus far six of the twelve measures on the floor. Earlier this summer, the Senate Appropriations Committee officially sent all twelve of its spending bills to the floor in the quickest pace since 1988, and just before their brief August recess, the upper chamber passed seven of the twelve bills on the floor. In fact, there is not another instance of the Senate jumping ahead of the House in passing appropriations bills dating back to 1976, when the start of the fiscal year moved from July 1 to October 1. Currently, Senate Appropriations Chair Richard Shelby (R-AL) is working successfully to keep poison pill riders and authorizing provisions out of any Senate appropriations legislation, consistent with an agreement he made with Ranking Member Patrick Leahy (D-VT) and Senators McConnell and Chuck Schumer (D-NY) to table damaging or controversial amendments to appropriations bills. Senate leadership has been mostly able to talk its members down from offering problematic amendments on other bills, but it is impossible to avoid for three outstanding bills, the FY19 Homeland Security (S. 3109), FY19 Commerce-Justice-Science (CJS; H.R. 5952/S. 3072), and FY19 State-Foreign Operations (State-Foreign Ops; H.R. 6385/S. 3108) appropriations bills.

Homeland Security is not likely to go because most members are uninterested in pursuing a fight over immigration or the wall before the election. CJS is not likely to go because members would have to move to table several controversial amendments. For example, Democrats would be uninterested in tabling amendments about citizenship questions on the census and prohibiting the Justice Department from firing Special Counsel Robert Mueller. On State-Foreign Ops, given the president’s recent meeting with Russian President Vladimir Putin, there are a number of related amendments, and Democrats do not want to table something that is tough on the president or the State Department if it relates to Russia. Additionally, another challenge will surface in the FY19 Labor-Health and Human Services (HHS)-Education appropriations bill (Labor-HHS; H.R. 6470/S. 3158) regarding family reunification next week when the Senate plans to take up the third minibus of Defense-Labor-HHS. With respect to family reunification efforts on the border, Immigration and Customs Enforcement (ICE), within the Department of Homeland Security, has jurisdiction over the parental issues, but HHS, funded under Labor-HHS, has authority over children’s issues.

Staff preconference has already begun on the first two minibuses (H.R. 5895 – FY19 Military Construction and Veterans Affairs, FY19 Energy and Water, and FY19 Legislative Branch; and H.R 6147 – FY19 Interior and Environment, FY19 Financial Services and General Government, FY19 Transportation-Housing and Urban Development, and FY19 Agriculture). The House and Senate have worked out allocations on the first and second minibus, though it is less clear they have yet to agree on allocations for FY19 Defense-Labor-HHS. In the end, we believe that it will not be the numbers that bring these bills down, but the riders instead. Democrats are betting their Republican colleagues are going to want to demonstrate they can govern and avoid a government-wide shut down. On the other side of the aisle, House Republicans may feel the need to include some controversial riders in the bills, especially if they have given on spending levels.

House and Senate Appropriations staffers are already at work trying to resolve the differences in the first two minibuses. The week the House comes back, the plan is for members to settle any outstanding issues in the first minibus. The second week, they are likely to conference the second minibus, and the third week, Defense-Labor-HHS. But, again, any rider or anything else at all could blow up a deal.

For example, the House continues to insist on funding Yucca Mountain in FY19 Energy and Water (part of the first minibus, packaged with FY19 Legislative Branch and FY19 Military Construction and Veterans Affairs, H.R. 5895). There is bipartisan opposition in the Senate to funding Yucca Mountain. While the cost of funding Yucca Mountain is only about $200 million, until the two houses come to an agreement on this issue, they cannot finish the bill.

While the FY19 Interior and Environment (H.R. 6147/S. 3073) and FY19 Financial Services and General Government (FSGG; H.R. 6258/S. 3107) House and Senate bottom line numbers appear to be close, at about $50 million apart, that is not actually the case. For example, the House did not include any funding for wildfire fighting. Without funding for firefighting, the numbers are dramatically further apart than $50 million.

Unlike the Senate, the House did not include their FY19 Transportation, Housing and Urban Development (THUD; H.R. 6072, S. 3023) or FY19 Agriculture (Ag; H.R. 5961/S. 2976) in their Interior-Environment/FSGG minibus. Republicans in the House did not want to spend the extra non-defense money on Labor-HHS, State-Foreign Ops, etc. so the House Republicans allocated a larger segment of the extra non-defense funds to infrastructure projects in THUD because they, even some Freedom Caucus members, are at least willing to spend more on infrastructure. While Freedom Caucus members may prefer including the funds in THUD as opposed to something else, they weren’t supportive enough of the bill to pass it on the floor. And House Democrats will not vote for the bill because of what else it does. For example, the bill entirely eliminates funding for some housing programs. As a result, there are not sufficient votes from either side of the aisle to pass THUD in the House. Furthermore, the House decided not to include Ag appropriations in their second minibus because around the time they needed to make the decision of what was in the package, they were also negotiating on the Supplemental Nutrition Assistance Program (SNAP) in the Farm Bill, and they did not want that issue to spill over into the agriculture appropriations debate.

Finally, the military construction number is a challenge. It remains to be seen how Congress will pay for additional veterans’ healthcare. The official line is Democrats want to raise the allocation to accommodate the $1.2 billion cost, while Republicans have made it clear they want to find offsets somewhere else. However, Congress may ultimately come to a stalemate, neither side will win, and eventually a supplemental will be necessary, perhaps in May.

These are just a handful of potential “trip wires” that could derail the appropriations process between now and the end of the fiscal year. It remains to be seen what happens when Congress returns from their recess, and how much governing Congressional Republicans are willing to do to avoid a government shut down just before the midterm elections.