Congress Passes CR Until March 23 While House and Senate Agree on Raising Defense and Non-Defense Spending Caps for FY 2018 and FY 2019

Congress Passes CR Until March 23 While House and Senate Agree on Raising Defense and Non-Defense Spending Caps for FY 2018 and FY 2019 – Facing a deadline of February 8, early this morning the Congress passed and sent to the President the fifth continuing resolution (CR) to keep the Federal Government operating until March 23.  At the same time, Congressional negotiators reached an agreement to increase the statutory spending caps for both Defense and Non-defense programs for FY 2018 and FY 2019.  The agreement would raise the total level of spending by about $300 billion over two years.

Under the spending cap agreement, the FY 2018 statutory Defense cap would be raised by $80 billion or 15%.  The Non-defense cap by $63 billion or 12%. For comparison purposes, the Administration’s FY 2018 budget request released last May proposed to increase Defense by $54 billion or 10% and reduce Non-defense by $54 billion or 10%.  The agreement also includes new spending caps for FY 2019 with an increase of $85 billion for Defense programs and $68 billion for Non-defense spending programs over the current respective spending caps in the Budget Control Act for FY 2019.

The budget agreement includes funding for four more years for the Children’s Health Insurance Program (CHIP), bringing the previous six-year extension to a full decade. The agreement recommends $2 billion (over two years) for NIH research, and $20 billion for infrastructure spending that will go toward "existing" projects for water and energy infrastructure as well as expanding broadband to rural regions and surface transportation. In addition, the budget agreement recommends:  $6 billion over two years for combating the opioid epidemic and mental health; $5.8 billion for the Child Care Development Block Grant Act; $4 billion to rebuild and improve VA Hospitals and Clinics; and $4 billion for programs that aid college affordability. Specific funding levels for these and other programs will be determined by the House and Senate Appropriations Committees as they work to develop a yearlong appropriations bill for FY 2018 ostensibly by March 23.

The agreement also includes $89.3 billion emergency funding in response to recent natural disasters.  Highlights of the supplemental appropriations package include:

·      $23.5 billion for the Federal Emergency Management Agency Disaster Relief Fund, the primary funding source for immediate disaster response. The funding will support response and recovery efforts, including assistance to state, territory, possession, and local governments, to cover total estimated needs for Hurricanes Harvey and Irma, and FY2018 estimated needs for Hurricane Maria 

·      $17.4 billion for the U.S. Army Corps of Engineers, largely targeted for projects to reduce the risk of future damages from flood and storm events.

·      $22 million for the Agricultural Research Service (ARS) to repair damages to 14 ARS-owned facilities and equipment resulting from Hurricanes Harvey, Irma, and Maria.

·      $18 million for assessments and removal of marine debris from areas affected by Hurricanes Harvey, Irma, and Maria.

·      $40 million for mapping and charting affected coastlines and navigation channels that are critical for transportation and commerce.

·      $42.1 million to repair or replace federal facilities and observing assets damaged by Hurricanes Harvey, Irma, and Maria, which are necessary for forecasting and responding to future hurricanes and storm events.

·      $100 million for improving weather forecasting capabilities and data collection efforts to better protect lives and property in the wake of future hurricanes.

·      $200 million for fishery disasters causing severe economic harm in coastal communities following Hurricanes Harvey, Irma, and Maria, as well as disasters declared in 2017.

·      $81 million to repair facilities damaged at NASA’s Kennedy and Johnson Space Centers.

·      $16 million to repair damaged federally-owned radio telescope facilities in Puerto Rico and the U.S. Virgin Islands.

·      $42.2 million for U.S. Geological Survey to repair and replace damaged stream gages and seismic monitors as well as conduct assessments and collect mapping data in order to aid in the recovery and rebuilding efforts.

·      $200 million for Centers for Disease Control and Prevention (CDC) for health recovery response, including: surveillance and abatement of vector-borne, food-borne, water-borne, and other infectious diseases that arise as the result of hurricanes.

·      $50 million for National Institutes of Health to provide funding to rebuild research efforts and physical infrastructure.

·      $100 million for institutions of higher education, and students at those institutions, in areas affected by the hurricanes and wildfires.

·      $1.374 billion for the FHWA Emergency Relief program to make repairs for highways damaged by disasters.  Removes the annual cap on emergency relief funding for territories, consistent with all states. Puerto Rico is also provided 100 percent federal cost share for damages resulting from Hurricanes Irma, and Maria for FY 2018-2019.

Assuming the CR and these new spending caps are signed into law, appropriators will use these new levels to complete their negotiations on, and enact into law, a yearlong omnibus FY 2018 appropriations bill by the time the new CR expires on March 23.  

On February 8, the Administration issued its Statement of Administration Position (SAP) on the spending agreement.  Overall, the White House supports the agreement, particularly the increased spending for Defense programs.  However, on Non-defense programs the SAP says,

…it is critical that the Congress work to decrease non-defense spending…to reduce America’s growing national debt. The Bipartisan Budget Act provides non- defense discretionary spending levels higher than the Administration deems necessary. Additionally, although the Bipartisan Budget Act does include some spending reductions, the Administration has proposed hundreds of billions of dollars in additional spending reductions that the Congress should also enact without delay in order to improve our fiscal state...

The President’s FY 2019 Budget Request is scheduled to be released next week on February 12.  Most observers expect, and the SAP reinforces this expectation, that despite the increase in the new spending caps for FY 2019, the White House budget request for FY 2019 Non-defense programs (such as research, education, climate programs, National Parks, health centers, etc.) will be at least as disappointing, if not more so, than it was for the FY 2018 request.  

Congress will have the new higher spending limits for FY 2019 to use when reviewing and ultimately acting on the President’s Budget request for FY 2019.