DoD on the Hill

FY2017 federal budget will be released February 9

Friday, February 5th, 2016

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President Obama will release the FY2017 federal budget to the public and Congress on Tuesday February 9, 2017. This is one week later than the usual date for submission of the budget, which is the first Monday in February.

After the FY2017 budget is released senior administration officials will brief the press and begin testifying before congressional oversight committees.

This year, contrary to what has become usual practice, the House and Senate Budget Committees will not receive testimony from the Director of the Office of Management and Budget (OMB) on an overview of the president's budget request, Senate Budget Committee Chairman Sen. Mike Enzi (R-WY) and House Budget Committee Chairman Tom Price (R-GA) issued a joint press release announcing that the committees will not hold hearings on an OMB review of the president's FY2017 budget.

Sen. Enzi said rather than hear from the administration on the FY2017 budget,the committees “should focus on how to reform America’s broken budget process and restore the trust of hardworking taxpayers.”  

The House and Senate Armed Services Committees have not yet announced when they will receive testimony from the Secretary of Defense and Chairman of the Joint Chiefs of Staff on the FY2017 Department of Defense (DoD) budget.

Next week, Highlights will include a brief overview of the FY2017 DoD budget request and identify links to official statements and available budget material.

Senate passes combined FY2016 spending and tax credit bills and sends to president

Friday, December 18th, 2015

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Today, the Senate approved the FY2016 Omnibus Appropriations and the “Protecting Americans from Tax Hikes Act of 2015,” clearing them for the president's signature. The White House issued a Statement of Administration Policy (SAP) supporting both bill indicating the president would sign the final bill. The House passed each bill separately, but the Senate combined the bills into on before voting.

The Senate approved the combined bill 65-33. Twenty-seven Senate Republicans joined 38 Democrats voting for the combined bill, while 26 Republicans, six Democrats, and one Independent voted against final passage.

Earlier today, the House approved the FY2016 Omnibus spending bill by a wide margin 316-113 as 150 Republicans and 166 Democrats voted for the bill. Yesterday, the House passed the tax bill 318-109, as 241 Republicans and 77 Democrats voted yes.

The $1.1 trillion FY2016 Omnibus Appropriations bill, including al 12 appropriations bills, provides $548 billion for defense (DoD and defense-related spending base budgets (including Department of Defense (DoD) and the Department of Energy Energy (DoE) nuclear weapons program) and $518 billion for nondefense budgets.

House Appropriations Committee chair Harold Rogers (R-KY) said “the bill will strengthen national security and military readiness, protect against current and emerging global threats, and provide for our troops and military families.”

Funding in the bill for DoD base appropriations, less Military Construction, totals almost $514.1 billion and $58.6 billion for Overseas Contingency Operations (OCO). These amounts conform to the Bipartisan Budget Act of 2015.

The bill funds a 1.3 percent military pay raise authorized in the FY2016 Defense Authorization bill. DoD civilians will receive a 1 percent across-the-board pay increase and a .3 percent locality pay raise on January 1, 2016 as Congress did not change the president's recommendations.

Operations and Maintenance (O&M) funding in the bill totals $167.5 billion. The bill provides $609 million more than the president requested to mitigate shortfalls in readiness, training, and depot maintenance.

Procurement funding in the bill totals $111 billion. Funding is included for: 68 F-35 Joint Strike Fighters, 102 Blackhawk helicopters, 3 Littoral Combat ships, 2 attack submarines, 2 DDG-51 guided missile destroyers, 5 F-18E Super Hornets, and 12 KC-46 tankers.

Military Construction funding in the bill totals $8.2 billion for military construction projects. Family Housing funding for construction and operations of military housing totals $1.4 billion and addresses the need for more Air Force housing. The bill also includes $623 million for construction and improvement to military medical facilities and $334 million for work to be performed at DoD Education activities worldwide. Funding for Guard and Reserve facilities in the U.S. Totals $551 million.

The combined bill extends or makes permanent more about 50 expiring tax credits. Notably, the bill makes permanent the child tax credit and the earned income tax credit for low and moderate income families and permanently extends the research and development tax credit. The bill ends the ban on oil exports, extends tax breaks for renewable energy, and includes reforms to the Internal Revenue Service. The bill also includes a two-year delay on implementation of the tax on expensive health care insurance, the so-called Cadillac tax.  

Congress extends CR to avoid government shutdown

Friday, December 11th, 2015

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Unable to complete action on a FY2016 Omnibus Appropriations bill before the current Continuing Resolution (CR) expires today, Congress passed a short-term CR until Wednesday, December 16. The Senate passed the CR on Thursday by voice vote and the House approved the bill today by a voice vote.

The White House has said the president would sign a short-term extension (a few days) if Congress had reached an agreement and needed more time to finish details and draft the bill.

On introducing the bill, House Appropriations Committee chair Rep. Harold Rogers (R-KY) said “While progress is being made on negotiations for a full-year Omnibus appropriations bill, it is clear that more time I needed to complete the package.” Rogers said he hoped the bill can be completed before the new CR expires.

Senate Appropriations Committee chair Sen. Thad Cochran (R-MS) also expressed confidence on progress toward completion of the Omnibus bill. “Our negotiations are progressing steadily, and I expect that Senators will soon be able to consider a bill that will meet the funding needs for our national defense and other priorities,” he said.

Negotiators have been working for weeks to reach an agreement on an Omnibus bill that includes all 12 appropriations bills. However, the roadblock has been the Republican's desire to include as many as 40 policy riders (legislative provisions that are not related to the bill) and the Democrats refusal to accept most of them. However, the Democrats also have policy riders they want to include.

Republicans prepared a proposal that included riders that the Democrats consider “poison pills, particularly imposing restrictions on Syrian immigrants (possibly including the House-passed bill restricting VISA waivers) and weakening Dodd-Frank reforms. Both would surely bring a presidential veto. But, Democrats are also concerned about other policy riders such as provisions blocking rules on power-plant emissions, changing Labor department rules on retirement accounts and clean water rules, and loosening financial system regulations.

Even so, Democrats also want to include their own policy riders such as repealing the ban on gun violence study by the Center for Disease Control.

Both Republicans and Democrats want to avoid a government shutdown and express cautious optimism that a deal can be reached by next week. But, they acknowledge that negotiations are in a delicate stage, requiring some give by each side to reach a conclusion.

Congress also is working to complete action on some 50 expiring tax credits (so-called tax extenders) that will expire on December 31 before adjourning. These tax credits include individual tax deductions, business incentives (e.g. research and development and new equipment purchases credits), and energy tax credits. Republicans are pushing to include an end to the ban on crude oil exports. Democrats and the the administration want permanent tax credits for low income families and tax credits for renewable energy projects.

House Democrats oppose many long-term or permanent tax credits because of the cost. It is estimated that extending many tax credits would cost $100 billion or more (for 10 years), but that amount could grow to over $700 billion if some credits were made permanent. If such permanent credits are included in the final bill House Democrats won't support it, House Minority Leader Rep. Nancy Pelosi (D-CA) said.

The House and Senate will reconvene on Monday, but House Majority Leader Kevin McCarthy (R-CA) announced that House votes would not be held until Tuesday evening. If a deal on the FY2016 Omnibus Appropriations bill is reached this weekend, Congress could act on it by December 16. However, if the negotiations drag out, another CR extension will be needed.

After three months of legislative accomplishments, Congress makes final push to avoid a government shutdown

Wednesday, December 2nd, 2015

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When Congress returned in September after the summer recess it faced an exhaustive list of legislative actions before adjourning in December: FY2016 appropriations; Iran nuclear deal; FY2016 Defense Authorization bill; Highway and Transit reauthorization; Federal Aviation Administration (FAA) reauthorization; Export-Import Bank reauthorization; expiring tax credits reauthorization; and increasing the debt ceiling.

Although this Congress has been criticized sharply for its lack of progress, during the past three months Congress has acted on a number of high profile items. Congress and the White House negotiated a clean CR that funds the government until December 11. A budget deal that suspended the debt ceiling until March 2017 and provided two-year relief from sequestration and funding increases for defense and nondefense budgets was agreed to in late October, passed, and signed by the president.

The FY2016 Defense Authorization bill that aligned with the budget agreement was passed and signed by the president.

Congress passed and the president signed the Airport and Airway Extension Act of 2015 (H.R. 3614) that extended authorization for the Federal Aviation Administration until March 31, 2016.

House and Senate conferees have agreed to the “Fixing America's Surface Transportation (FAST) Act” that authorizes federal surface transportation funding for five years and includes reforms to transportation programs. The bill would also reauthorize the Export-Import Bank until 2019. The bill could go to the president as early as Friday.

With this success behind them, Congress now faces the final push to complete what would be an impressive list of accomplishments.

With the Continuing Resolution (CR) set to run out in eight days, Congress must pass either a FY2016 Omnibus Appropriations bill or another CR by December 11 to avoid a government shutdown. The House and Senate have passed their versions of the FY2016 Military Construction/VA bill thus providing a vehicle for an Omnibus bill that includes all 12 appropriations bills. Committees have been working on reaching agreement on the other 11 appropriations bills and House and Senate leaders hope to have a bill complete by December 11, although another short-term CR may be needed to finish and get the bill to the president.

Of course, this optimistic sentiment is based on House Speaker Paul Ryan's (R-WI) ability to ensure that strong pressure from many Republicans to defund Planned Parenthood or other policy riders do not derail the negotiations. If an Omnibus bill defunded Planned Parenthood the president would surely veto it forcing a shutdown showdown, something few seem to want. Other potential “poison pills” that would force Democrat opposition is significant changes to Dodd-Frank or restrictions to immigration. There could also be a push from some defense hawks to increase defense funding above the amount set in the budget agreement.

Ryan's challenge is to provide supporters of Planed Parenthood defunding and other policy riders a way to address their concerns without forcing a government shutdown crisis.

Finally, in what has become an annual ritual, Congress will have to address some 50 expiring tax credits (so-called tax extenders) that will expire on December 31. These tax credits include individual tax deductions, business incentives (e.g. research and development credits), and energy tax credits. For a number of years Congress has routinely extended these tax credits for only a year. Congress will probably extend the credits through FY2016, although there is a strong push to make some extenders, such as he research and development tax credit, permanent. There is also a chance that a tax extenders bill could include a provision, pushed by Democrats, that would end or modify the so-called “Cadillac Tax.” This 40 percent tax on expensive health insurance plans, mostly offered by employers, is part of the “Patient Protection and Affordable Care Act,” and there is some concern that the president could veto the entire bill, if it makes significant changes to this tax.

President signs the FY2016 Defense Authorization bill

Monday, November 30th, 2015

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President Obama signed the FY2016 Defense Authorization bill (S.1356) last week ending a standoff with Congress over spending caps, at least for now.

The president had vetoed the bill agreed to by the House and Senate in October because it included $38 billion of base budget requirements in funding for Overseas Contingency Operations (OCO). The White House and most Democrats opposed this approach because they believed it circumvents the budget act to increase defense spending and could lead to significant cuts to nondefense programs.

The budget agreement provided relief from sequestration for both defense and nondefense budgets by providing an additional $80 billion equally divided between defense and nondefense in FY2016 and FY2017. In FY2016 the agreement raised the FY2016 defense budget by $25 billion and the OCO account by $8 billion.

After the president signed the budget agreement, the House and Senate passed by significant margins a revised defense authorization bill that aligned with the budget agreement and addressed the president's primary reason for vetoing the earlier bill.

In signing the FY2016 Defense Authorization bill the president said that “the Congress has now revised the National Defense Authorization Act to incorporate the new funding changes and has altered the funding authorization provisions to which I objected.”

The authorization bill provides almost $607 billion, including about $580 billion for total DoD, $18.6 billion for the Department of Energy (DoE) nuclear weapons program and $7.6 billion to meet the statutory requirements for DoD Concurrent Receipt payments. The bill includes a 1.3 percent military pay raise, reforms to military compensation and retirement, and significant reforms to defense acquisition.

However, the bill still includes a provision that prevents the transfer of prisoners from Guantanamo, which the president also strongly objected to in his earlier veto statement. In a statement accompanying his signing of the revised bill, the president expressed serious concern that that this provision and other provisions concerning detainee transfers “violate constitutional separation of powers principles.”

The president indicated that he would act unilaterally stating “in the event that the restrictions on the transfer of detainees in sections 1031, 1033, and 1034 operate in a manner that violates these constitutional principles, my administration will implement them in a manner that avoids the constitutional conflict.”

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