By Matt Vallone, Director of Research & Analysis
Trump Budget Plans Begin to Take Shape, but Face Significant Obstacles
After several weeks of conjecture, speculation, and forecasting, this week should start to provide more tangible details on what the Trump administration’s budget and policy priorities will look like. On Tuesday night, President Trump will address a joint session of Congress and lay out his priorities for the year. Following his address, Congressional Republican leadership plans to release their proposals for repealing and replacing the Affordable Care Act (Obamacare). Two weeks after that more details will emerge as it appears that the administration hopes to release a top-line view of its budget on March 13th. Final details are unlikely to be available until late April or May, but this week should mark the kickoff of what may be the most active Congressional session since 2009-2010.
Already information on the budget proposal is being made available, with the New York Times, Politico, and Fox News reporting the broad contours of the proposal. It appears the White House will call for increased spending on defense, homeland security, and law enforcement of approximately $54 billion while cutting spending in most other agencies by an equivalent amount. Earlier reports have indicated that the budget may eliminate entirely a variety of smaller programs, such as the National Endowment for the Arts, the Corporation for Public Broadcasting, the office of Violence Against Women, and the Legal Services Corporation. However, the administration appears determined to protect entitlement spending, as the budget is not supposed to include changes to Social Security or Medicare.
However, once the budget proposal is drafted, the burden will pass to Congress, where things may look decidedly different. As part of our review of the budget process, this week we will work through the timeline for the Congressional budget process. Then, next week we will look at who some of the important players are and what their priorities are, lastly we will look at some of the possible fates of Trump’s budget proposal. While we can’t predict exact outcomes, we can lay out some various paths the budget process could go down depending on how things play out.
Debt Ceiling – This isn’t directly related to the budget but probably worth noting. The extension on the debt ceiling expires on March 15th. However, the Treasury will have refilled its coffers for ‘extraordinary measures’ and can probably avoid hitting the ceiling for a month or two. After that point, the Congress and WH will need to raise/suspend it again. This may get rolled into whatever vehicle funds FY 2017 funding.
One thing is immediately clear – despite Congressional Republicans planning on long periods of time in session, the calendar will be a significant factor in determining the success or failure of Trump’s legislative goals. The first obstacle is that FY 2017 spending has not been determined yet. Since Republicans plan on using reconciliation from the FY 2017 budget resolution to pass their replacement/repeal of the Affordable Care Act, the FY 2018 budget process will be in stasis until FY 2017 is resolved. Further complicating matters is that funding for the government runs out in the end of April, requiring floor time be spent on either appropriations or another continuing resolution.
Similarly, the Treasury Department will have to resume ‘extraordinary measures’ when the debt ceiling suspension expires in mid-March. That means Congress will have to deal with the debt ceiling at some point this spring, either as a stand-alone bill or as part of broader legislation (maybe including it in the FY 2017 spending package).
After all that, it is likely that real consideration of the FY 2018 budget resolution will only start sometime in May, leaving only a few months remaining before the August recess to adopt a budget resolution, and then have both chambers pass all twelve appropriations bills. On July 28th, Congress will recess for the summer and then return after Labor Day with only a handful of session days remaining before the end of the Fiscal Year. It sounds like a lot of time, but given that we’re heading into March and the Senate is still confirming Trump’s cabinet, it should be easy to see how complex legislation such as tax reform, health care reform, and spending bills containing funding for hundreds of programs could quickly lock up Congress for weeks. There is definitely time to accomplish all of the goals listed above, but no one should be under the illusion that this will be quick or easy.
House Activity – This week the House will start to transition from passing bills overturning Obama-era rules to passing new legislation. There will be one more vote disapproving a rule from the Department of Labor, but three significant regulatory reform bills are up for consideration as well. These bills would force agencies to repeal existing rules to offset the cost of new rules, place limits on agencies ability to use social media in support of rules, and require agencies to get cost-benefit input from the White House’s Office of Information and Regulatory Affairs before issuing rules. Most of these would likely face significant Democratic opposition in the Senate, but should pass the House without issue.
Senate Activity – The Senate will continue working through a variety of nominees for President Trump’s cabinet, with votes likely to take place on Wilbur Ross’ confirmation as Secretary of Commerce, Rep. Ryan Zinke’s nomination for Secretary of the Interior, Ben Carson’s nomination for Secretary of Housing and Urban Development, and former Governor Rick Perry’s nomination for Secretary of Energy.
- 3/1 ‘Global Counterterrorism’, CLOSED HEARING, Subcommittee on Emerging Threats and Capabilities, SR-222 Russell, 230pm
- 3/2 Cyber Strategy and Policy, Full Committee Hearing, SH-216 Hart, 930am
- 2/28 ‘Hearing on Department of Defense Inspector General Report “Investigations on Allegations Relating to USCENTCOM Intelligence Products”’, Subcommittee on Oversight & Investigations, 2118 Rayburn, 330pm
- 3/1 ‘Cyber Warfare in the 21st Century: Threats, Challenges, and Opportunities’, Full Committee Hearing, 2118 Rayburn, 10am
- 3/1 ‘U.S. Ground Force Capability and Modernization Challenges in Eastern Europe’, Subcommittee on Tactical Air and Land Forces, 2212 Rayburn, 330pm
- 3/2 ‘Overview of Military Review Board Agencies’, Subcommittee on Military Personnel, 2118 Rayburn, 1030am
- HAC-D – No hearing scheduled
- SAC-D – No hearing scheduled
Government Activity Round-Up
Two really important pieces of analysis out of CBO this week. The first is their review of the Navy’s FY 2017 Shipbuilding Plan. Like past years, the CBO’s conclusion is that the cost of the Navy to execute its plan to get to 308 ships would be about 1/3 more than it has historically spent on shipbuilding. Getting to 355 would be an even more difficult lift. More here. Second, the CBO has released a report titled, ‘Projected Costs of U.S. Nuclear Forces, 2017 to 2026’. This piece dives into the cost of maintaining the U.S. nuclear triad and what those costs may look like in the next decade. The headline number is that it would cost over $400 billion from 2017 to 2026 to execute the current nuclear modernization plans.
Nothing quite so interesting from the GAO, but there is a report looking at issues around the Joint Exercise Program and improving its effectiveness. GAO found that DoD should take steps to improve the data infrastructure around the Joint Exercise Program, as currently the Joint Training Information Management System (JTIMS) does not always provide reliable data. More available here.
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