Allocations Take Shape, as House Panel Steers Funds to Security

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By Nancy Ognanovich

House Republicans’ plans for fiscal year 2018 spending bills are slowly taking shape—with details released by the Appropriations Committee showing the GOP is reverting to prioritizing security-related bills over funding for domestic programs.

While Republicans’ proposed budget resolution remains under development at the Budget Committee, Appropriations Committee Chairman Rodney Frelinghuysen (R-N.J.) has signaled that he intends to both direct whatever extra resources are available to defense and security programs and also move those bills ahead of the measures that fund domestic programs.

Frelinghuysen has yet to announce the full set of the 302(b) allocations, but the seven bills he’s released so far and scheduled for markup give extra funds to the Departments of Defense and Veterans Affairs, the Federal Bureau of Investigation, and other military and security-related offices. Slated for cuts are domestic agencies like the Agriculture and Commerce departments, and the Internal Revenue Service.

Deeper reductions, however, appear to be in store for programs covered by the five bills that haven’t been released and may not be seen until after lawmakers return from their 10-day July Fourth recess. They include the bills covering the State, Transportation, and Labor departments. Also unknown is the fate of the Department of Homeland Security and what resources it may provide for border security, including the wall that President Donald Trump continues to demand.

Frelinghuysen is under pressure to begin moving the FY 2018 bills even in the absence of a budget resolution because lawmakers only have three months before FY 2017 monies run out on Sept. 30. They actually have far fewer actual work days to prevent a funding crisis because they are scheduled to begin a five-week recess on July 29.

As Frelinghuysen prepares the massive Department of Defense bill for markup early June 29, Democrats criticized the lack of a full set of allocations and said they are concerned that deep reductions are in store for domestic programs under the GOP plan. They also called Frelinghuysen’s spending plan unrealistic and not likely to be enacted into law.

“[H]ere we are, at the fifth subcommittee markup, three months shy of the end of the fiscal year,“ Appropriations Committee ranking member Rep. Nita Lowey (D-N.Y.) said June 28, amid concerns about the “dysfunction” of this year’s process. “There is no budget resolution, no 302(b) allocations, no bipartisan discussions to avoid sequestration on Defense and nondefense priorities, and no plan to avoid a catastrophic debt default.“

Defense Big Winner in First Round

Appropriators’ work in large part has been on hold while waiting for the House Republican Conference to agree to a budget resolution setting the discretionary spending total that they then will divide into 12 slices to cover their bills.

The GOP now is working with a plan that would permit $621.5 billion in spending on defense and $510.7 billion for non-defense, or a total of $1.132 trillion subject to the Budget Control Act’s (BCA) spending caps. However, that budget would circumvent the BCA’s caps for fiscal 2018 by also allowing $64.6 billion in extra money for the Pentagon from the so-called Overseas Contingency Operations account created to fund the wars in Iraq and Afghanistan.

However, that budget has yet to be marked up and it won’t come to the House floor any earlier than July. But if the committee follows the budget’s assumptions for defense and non-defense, total non-defense spending would be cut by $7.8 billion from the recently enacted FY 2017 omnibus. That amounts to a 1.5 percent cut. Even under current law, non-defense spending is slated for a 1 percent reduction.

Before the budget numbers solidified, Frelinghuysen moved the annual Military Construction and Veterans Affairs spending bill that locked in a series of prior year increases and built on it. The $88.8 billion bill—with a $6 billion increase—is the only bill so far reported from committee and ready for floor action.

Now Frelinghuysen plans to also move the DOD bill by week’s end to have it in the queue for the floor when lawmakers return from recess July 11. The committee’s bill would also lock in and build on last year’s increase, providing a total of $658.1 billion for the Pentagon, with the $584.2 billion in regular discretionary spending. The latter represents a $68.1 billion increase over current spending. Also provided is $73.9 billion in OCO funds not subject to the discretionary cap.

The DOD bill will be marked up with the much smaller Legislative Branch bill that funds the operations of Congress. But that bill’s $3.58 billion total represents an increase of $100 million as leaders recently decided to boost the budget for the U.S. Capitol Police in the wake of the shooting that hurt House Majority Whip Steve Scalise (R-La.).

Meanwhile, the annual Commerce-Justice-Science bill that Frelinghuysen released June 28, ahead of a June 29 subcommittee markup, would provide $54 billion next year, a cut of $2.6 billion. But Justice Department programs are prioritized within the total, with DOJ’s $29 billion budget representing a $349 million increase. Included is $8.8 billion for the Federal Bureau of Investigation, a $48 million increase. The National Aeronautics and Space Administration at $19.9 billion would receive an increase of $219 million but the Commerce Department at $8.3 billion would be cut by $892 million.

The draft Financial Services bill also released June 28 and going to markup June 29 calls for $20.231 billion in funding next year, a $1.28 billion cut for regulatory agencies. That includes a $149 million cut for the Internal Revenue Service, a $3 million cut for the Securities and Exchange Commission, and a $981 million cut for the General Services Administration.

Also receiving reduced allocations so far are the annual Agriculture and Energy and Water bills, which were marked up at the subcommittee level June 28. The $20 billion for Agriculture is a cut of $876 million and the $37.56 billion for Energy and Water is a reduction of $209 million.

But Energy and Water Subcommittee Chairman Mike Simpson (R-Idaho) said his bill actually includes healthy increases for security-related programs. While cuts are in store for renewable energy activities, the bill Includes $10.24 billion for the Energy Department’s national defense programs, a $921 million increase. The budget for the U.S. Army Corps of Engineers also would be increased $120 million, he said.

“Increases over last year are targeted to those areas where they are needed most—to provide for our nation’s defense and to support our nation’s infrastructure. This is a responsible bill, one that makes some difficult choices in order to prioritize the most critical federal programs,“ Simpson said.

Energy and Water ranking member Rep. Marcy Kaptur (D-Ohio) said she also supports the bill and is grateful it is among the first to be marked up and moved in committee. But she questioned the overall “disarray“ that she said marks the FY 2018 process.

“The vastly different opinions of how much funding should be allocated to discretionary spending has left many valuable programs—not just in this subcommittee but other subcommittees—in suspended animation, something that does a tremendous disservice to our country,“ Kaptur said. “By extension, not having a full array of 302(b) allocations in the budget process by which to judge the relative merits of singular spending decisions is really not fair to this subcommittee or the other 11.”

‘Minibus’ to Floor in July?

But Frelinghuysen said little about next steps at the back-to-back subcommittee markups, including which other bills will move in full committee and be brought to the floor. For her part, Lowey suggested the Agriculture bill may be among the domestic-related measures that don’t make it that far.

Lowey and other lawmakers said earlier there are rumblings that Republican leaders may be ready to package bills in an omnibus or a couple “minibuses“ and bring them to the floor. Likely candidates would be the Defense, Milcon-VA, Energy and Water, and Legislative Branch bills that reflect a focus on security, aides said.

But some Republican “cardinals“ on the committee said they don’t expect the discretionary spending plan now under discussion to become law. Among others, Labor, Health, and Human Services Subcommittee Chairman Tom Cole (R-Okla.) said the spending called for in the House Budget Committee’s blueprint better represents Republicans’ starting negotiating position for the bipartisan talks he and Milcon-VA Subcommittee Chairman Charlie Dent (R-Pa.) said will be needed to resolve FY 2018 spending.

Cole acknowledged that the House Budget Committee plan, which sets defense spending at a level more than $72 billion over the BCA cap for FY 2018, is subject to a budget challenge unless the BCA caps are again revised through a new bipartisan budget deal. Without amending the BCA, the defense appropriations bill would be subject to sequestration that would lower the total by pro-rata cuts bringing it down to the existing cap level.

“The law is the law,“ Cole said. “That’s why you’re going to have to have a larger deal to change it at the end,” Cole said.

To contact the reporter on this story: Nancy Ognanovich in Washington at nognanovich@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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