Daily Report for Executives provides in-depth coverage of unfolding legislative, regulatory, and judicial news from the nation’s capital, the states, and around the world. This daily news service...
President Donald Trump’s announcement of plans to build a wall along the U.S.-Mexico border is generating more questions than answers, setting up a tough task for Congress when it starts working on funding the proposal this spring.
With only a bare-bones description of the ambitious proposal, it will be up to House and Senate Republican leaders and the committees under their control to wrestle the details of the plan out of the new administration and work out a strategy for providing the money, likely to come in installments over the next few years.
That work will begin almost immediately, particularly if, as expected, Republican leaders want to provide by April the first slug of what will likely be billions of dollars in funding. Besides money to begin work on the project, Trump said he wants more funding to hire additional border security workers.
The new administration’s plan is likely to be taken up at the same time Congress struggles to finish the fiscal year 2017 spending bills before a current stopgap that is funding the federal government expires April 28.
Republican lawmakers said a massive package combining those bills and some type of supplemental spending plan for border security is possible.
House and Senate appropriators, who will be charged with writing those bills, will be tasked with working out the specifics of the border funding plan in the coming weeks, said Jim Dyer, a principal at Podesta Group and former Republican staff director at the House Appropriations Committee. But as they sit down in February to examine the details, appropriators will have to resolve a number of unanswered questions, he said.
“I don’t know if they’re going to do some of it in a supplemental bill,” Dyer said. “I don’t know if they’re going to do the balance of it in the fiscal ’17 [appropriations] bill and the rest in the fiscal ’18 bill. And the more you try to do, the higher the price tag goes, and one of the big issues in Homeland Security [appropriations bills] is if you’re going to offset it or not.”
Trump earlier said he would force Mexico to pay for the wall. But the executive order he issued Jan. 25 called on the federal government to identify and allocate “all sources of federal funds” to plan, design and construct a physical wall along the southern border. The order called for federal agencies to “project and develop long-term funding requirements for the wall, including preparing congressional budget requests for the current and upcoming fiscal years.” Separately, the administration is mulling a plan to impose a 20 percent tax on Mexican imports to pay for the wall (see related story in this issue).
Dyer and Bill Hoagland, who served as top budget adviser to former Senate Majority Leader Bill Frist (R-Tenn.), both told Bloomberg BNA they had no illusions that the Mexican government would pay for the wall, which is tied to other enforcement actions Trump is undertaking to stem the flow of illegal immigration.
“That’s not going to happen,” said Hoagland, now senior vice president at the Bipartisan Policy Center, shortly after Mexican President Enrique Pena Nieto on Jan. 26 canceled plans to meet with Trump. “That’s a foolish pig-in-a-poke argument.”
Hoagland also said it will be difficult to ultimately recover costs from travelers from Mexico, such as through new tolls or fees at border facilities. Even if collected, he said, they wouldn’t be enough to cover the cost.
“You still have to put up the money to begin with before you can collect tolls,” said Hoagland. “You still need the federal government to build the wall right now.”
Republican leaders said Jan. 26 that the cost of the Trump plan is between $12 billion and $15 billion (see related story in this issue), but Dyer and Hoagland both suggested those are low figures for a project of its size.
“I haven’t seen any consistent level of numbers,” said Dyer, who was staff director at House Appropriations when it wrote many supplemental spending bills for the wars in Iraq and Afghanistan. “I’ve seen everything from $8 billion to $25 [billion] to $35 billion. So there’s no point in downplaying or lowballing this issue. It’s going to be very expensive.”
Hoagland, who also served previously as staff director to the Senate Budget Committee, said he’s heard $20 billion as a possible figure. “But I don’t think anyone actually knows what the cost of this would be,” he said.
Although lawmakers such as Rep. Tom Cole (R-Okla.) already said House Appropriations was expecting to provide extra “border security” funds in this spring’s spending bills, he and others suggested few details of the administration’s plan have been seen. Hoagland said he expects more about the proposal to emerge in February and said it should be fleshed out in the fiscal 2018 budget that Trump and his team have to submit to Congress. That plan, he said, also could have amendments to the fiscal 2017 budget.
Such a document, Hoagland said, could show how the wall fits with Trump’s entire fiscal plan and if that plan is a threat to Republicans’ stated goal of having the budget in balance over a 10-year period. Many Senate Republicans, he said, recently voted for the 2017 budget resolution aimed at setting up the repeal of the Affordable Care Act only after being assured that the 2018 budget resolution would show a path to get to balance.
Hoagland said his first question is whether the starting point for monies to build the wall and provide more border security agents could be an “emergency” supplemental spending bill that lawmakers try to push through this spring. Such supplementals, like those used during the Bush administration to fund the wars in Iraq and Afghanistan, typically are not paid for with cuts elsewhere in the budget and are not subject to the bipartisan budget agreement’s discretionary budget caps.
Republican leaders balked last year when President Barack Obama requested a much smaller amount—$1.89 billion—in supplemental funds to fight the threat posed by the Zika virus and ultimately agreed to about half the funding with offsets. But House Speaker Paul Ryan (R-Wis.), who discussed the matter with Senate Minority Leader Mitch McConnell (R-Ky.) at this year’s Republican policy retreat, refused to rule out that Congress won’t agree to provide federal money for the wall on an emergency basis.
Hoagland said that could be problematic, particularly if Republicans also decide to carry through with plans to do a supplemental this spring to boost defense spending. Recent discussions have put the price tag of a defense supplemental at $40 billion, he said.
“It could be proposed as a supplemental along with the defense supplemental so you could be adding $40 billion to defense for ’17 and $20 billion for this wall,” Hoagland said. “You’re talking $70 billion.”
Dyer said it isn’t difficult to declare an emergency “even if it’s not.”
“You can declare today a federal holiday if you want to, but that doesn’t make it a federal holiday or a national emergency,” he said.
Both Dyer and Hoagland said those supplemental funds could be augmented with extra monies provided in the still-to-be-finished 2017 bills and the 2018 bills that appropriators also plan to start writing this spring. It would be a similar stance as that taken last year when House and Senate appropriators said some of the Zika funds Obama wanted also would be provided through the regular Labor, Health, and Human Services bill for 2017.
But Dyer said appropriators have to look carefully at how much federal agencies could actually spend over the next few months when the plan hasn’t even been developed yet.
“We are in the fifth month of the fiscal year, so the question is, how much of this  money can you obligate effectively in the remaining seven? You have to ask the Department of Homeland Security to look at that,” Dyer said.
But even that scenario also won’t be easy, the former staff directors said. Both said there is very little wiggle room under the current budget law to increase this type of spending, and the end result is that Congress and the new administration may have to again revisit the caps on annual defense and non-defense programs.
“My first reaction is that under the current law we have these discretionary caps and the caps for ’17 and even ’18 were pretty well filled up to the top of the water glass already,” Hoagland said. “Those caps would have to be raised, and you’d need 60 votes [in the Senate] to overcome a point of order.”
Hoagland said raising the budget caps to accommodate $70 billion or more in extra defense and non-defense spending would surely encounter opposition from the same Republicans who were promised when they voted recently on the budget resolution that they would soon see indications that their leadership is working to get spending under control.
“I just don’t think that’s going to fly with the [House] Freedom Caucus or some of those fiscal hawks in the Senate,” including Sens. Mike Lee (R-Utah) and Ted Cruz (R-Texas), he said.
Dyer said he would advocate for lifting the caps beginning in 2017 and use that to augment supplemental spending.
“The question is, how much could you obligate in this fiscal year and in the regular bill that will get you to Sept. 30?” he said. “That’s two cap adjustments and it may be two emergency declarations. We’re not talking about small amounts of money here.”
Dyer said there’s another alternative to raising the caps and using supplementals not subject to the caps to fund the wall: providing the money through the account set up during the Bush administration to fund the wars overseas outside of the regular cap on defense spending.
“You could declare it all OCO—Overseas Contingency Operations [funds]—and run it through the Pentagon,” Dyer said.
Hoagland said lawmakers already agreed when they approved the continuing resolution now funding the government to raise OCO funds to the $60 billion level in 2017 and the regular bills that will go forward in the spring are expected to reflect that increase. He said raising OCO monies is somewhat easier as it doesn’t face a 60-vote challenge in the Senate.
Typically a president’s budget or a supplemental spending plan is championed by the director of the White House Office of Management and Budget. But Dyer and Hoagland said Rep. Mick Mulvaney (R-S.C.), Trump’s choice to head OMB, has been an opponent of increased defense spending—and OCO in particular—as a leading member of the Freedom Caucus.
“He has never been a man who: a), believes in defense increases or: b), wants to do anything in non-defense he can’t offset,” Dyer said.
For his part, Hoagland predicted it may fall to others to get the extra spending approved, beginning with the top brass at the Pentagon.
“It’s interesting he doesn’t support increased defense spending,” Hoagland said of Mulvaney, whose nomination bogged down amid tax problems. “But I think those generals will override the OMB director easily.”
While Hoagland questioned the support of conservative Republicans in both the House and Senate, Dyer said it’s not clear Democrats will support packages that just boost Republican priorities while putting downward pressure on nondefense programs.
Dyer said Democrats gained two seats in the Senate and that gives them a bit more leverage.
“[Y]ou’re going to have to make some kind of accommodations to move an appropriations bill,” he said.
Dyer said it would be ironic if ultimately a large beneficiary of Trump’s plan turns out to be Mexican contractors and their employees. Dyer cited a recent Bloomberg story reporting that while many builders and material suppliers stand to gain under the plan, the largest winner could be Cemex SAB, which has operations on both sides of the border.
“It’s a valid question who will be doing it,” Dyer said.
To contact the reporter on this story: Nancy Ognanovich in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)