Political Report: 9/16/2019

 In Weekly Wire

There was a Budget Deal . . . Why isn’t the outlook for 2020 clear yet?

Prior to the August recess, Congress and the White House came to a much-ballyhooed budget agreement under the Bipartisan Budget Act of 2019 (BBA). That law raised spending caps on defense and non-defense accounts, and cleared the way for appropriations.

However, here we are in the middle of September and it’s still unclear what the programmatic details of the FY2020 appropriations will look like. Here we explain why that’s the case, where things stand, and what’s next.

Quick Takeaway:

  • Congress passed the Bipartisan Budget Act of 2019 in August. This raised the budget caps on defense and non-defense in both fiscal year 2020 and 2021.
  • Congress still needs to pass a House-Senate conference agreement on appropriations for FY2020, but progress on appropriations bills is getting hung up on wider political issues despite the new fiscal year starting in a few days.
  • The President remains a wild card: Even if Congress can agree, the President needs to sign appropriations into law. It is still possible that arguments over the border wall could hold up things.
  • A continuing resolution (CR) for at least the first two months of FY2020 are a likely outcome in the near-term.

Overall, there is still cause for cautious optimism that DoD will have its funding resolved within the next several weeks. But the exact endgame is unknown. There are still hurdles that are likely to delay formal FY2020 appropriations until later in the fall.

First, the Senate and House need to pass their appropriations bills. Thus far, the House has passed 10 out of 12, and the Senate has passed none (although the Senate Appropriations Committee has approved FY2020 funding in committee).

Then the House and Senate, which are run by Democrats and Republicans respectively, will need to agree on conference legislation.

And finally, the President will need to sign spending bills that may not give him what he wants on the border wall but will add tens of billions of dollars to the national debt.

Remind me what the BBA of 2019 accomplished?

The Bipartisan Budget Act was signed into law on August 2, raising spending caps on defense and non-defense accounts over fiscal years 2020 and 2021.

This effectively ends the impact of the Budget Control Act of 2011, which has been the background for discretionary spending debates over the last decade.

Defense and Non-Defense Discretionary Budgets for FY2020 Under Alternative Proposals

 

It’s been almost two months, why hasn’t Congress passed the appropriations?

While the BBA lifted a key roadblock to resolving FY2020 funding levels as of September 17, there has been only slow progress on appropriations. There are a couple of reasons for this.

Congress was out of session during the month of August, with recess from the end of July until September 9, limiting what could get done.

The second issue is that while the House of Representatives passed a defense appropriations bill, the Senate has not done so meaning that the bill needed to go through the subcommittee (passed on September 10) and the full Senate Appropriations Committee (passed on a party line vote on September 12) and then on to the full Senate.

Once it’s passed, the two bills will need to be reconciled before final legislation can again pass both chambers. Given distrust of the White House by Congressional Democrats, defense appropriations will likely be bundled with domestic appropriations as well. Hopefully that will take place prior to September 30, but the timeline is uncertain.

Where are things now?

The House passed its defense funding bill as part of a broader minibus package in August. This legislation funded the Department of Defense based on a topline national defense figure of $735 billion, rather than the $738 billion agreed to in the 2019 BBA.

This results in a moderately lower topline than in the Senate bill, creating areas of significant divergence that will need to be worked out. The Senate bill passed the Senate Appropriations Committee on September 12 and should head to the floor next week.

One note of caution is that the Committee rejected a Democratic amendment restricting the White House’s ability to use this money for wall funding on a party-line basis. This raises the possibility that such language could become a sticking point either before the full Senate or in conference negotiations.

Comparing the House and Senate Positions on Defense Spending in FY2020

Fundamentally, there is little difference between the House and Senate bills. There will be some subtle differences in specific programs, but overall there is only a difference of $4.7 billion in spending between the two bills.

Some key programs of note:

  • F-35: The House funds 90 F-35 aircraft across three Services while the Senate funds 96 and includes another $156 million in advance procurement for aircraft in FY2021.
  • KC-46: Both chambers provide funding for 12 KC-46 tankers.
  • F/A-18E/F: Both chambers provide funding for 24 Super Hornets.
  • F-15EX: Both chambers provide funding for eight F-15EXs.
  • UH-60: Both chambers provide funding for 73 UH-60 Blackhawks.
  • Virginia-class: The House provides more advance funding for SSN-774, but both bills purchase two subs in FY2020.
  • DDG-51: Both chambers provide for the purchase of three DDG-51s.

Summaries of both bills are available here and here (the Defense section in the House bill starts on page 11).

What’s next and when will this all be over?

Unfortunately, the exact timing on when this will be resolved is still up in the air. Both House and Senate leadership have indicated that they will pass a CR rather than risk a shut down at the end of September.

But the exact path for the appropriations bills to become law is a bit murkier. It looks likely that the Senate will pass the defense appropriations bill next week and then begin negotiations with the House on a compromise bill. This assumes that the Senate can agree on what constitutes “poison pill” amendments.

However, Congressional Democrats may want to merge the defense appropriations bill with the Labor-HHS bill in a manner similar to last year to avoid the possibility of the defense appropriations becoming law and the White House changing its mind on the spending agreement.

The final hurdle for all of this is the White House actually signing the appropriations. As evidenced by last year’s shutdown, assuming an easy resolution to funding issues after Congress has voted is not the sturdiest of assumptions. For now, we will continue to watch and update our expectations as Congress works through the end of the fiscal year.

While all of this is going on, the House and Senate conferees on the FY2020 National Defense Authorization Act are scheduled to begin meeting this week. However, it is likely that any proposed NDAA agreement will await resolution of DoD appropriations.

House Activity

The House will work on legislation reforming the regulation of arbitration agreements while also passing a short-term CR, the duration of which has yet to be determined.

Senate Activity

The Senate will work on appropriations and, potentially take up a CR should it be passed by the House.

Congressional Defense Activity

  • HASC – No hearings this week
  • SASC – 9/17 “Situation in Southeastern Europe,” Full Committee Hearing, SR-222 Russell, 3pm
  • HAC-D – No hearings this week
  • SAC-D – No hearings this week
  • SFRC –    9/18 “U.S. Policy in the Indo-Pacific Region: Hong Kong, Alliances and Partnerships, and Other Issue,” Full Committee Hearing, SD-419 Dirksen, 10am
    • 9/18 “Business Meeting,” Full Committee, S-116 The Capitol, 130pm
    • 9/18 “U.S.-Colombia Relations: New Opportunities to Reinforce and Strengthen Our Bilateral Relationship,” Subcommittee on Western Hemisphere, Transnational Crime, Civilian Security, Democracy, Human Rights, and Global Women’s Issues’, SD-419 Dirksen, 230pm
    • 9/19 “Nominations,” Full Committee Hearing, SD-419 Dirksen, 930am
  • HFAC – 9/18 “Voices Leading the Next Generation on the Global Climate Crisis,” Joint Hearing with the Select Committee on the Climate Crisis, 2172 Rayburn, 10am
    • 9/18 “Meeting the Challenge of White Nationalist Terrorism at Home and Abroad,” Subcommittee on the Middle East, North Africa, and International Terrorism Hearing, 310 Cannon, 2pm
    • 9/18 “U.S. interests in East Asia and the Pacific and the FY20 Budget,” Subcommittee on Asia, the Pacific, and Nonproliferation Hearing, 2172 Rayburn, 2pm
    • 9/19 “The Trump Administration’s Afghanistan Policy,” Full Committee Hearing, 2172 Rayburn, 10am
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