Inside (the Beltway) Scoop

House Budget Committee Close to Agreement on Revised Spending Caps; Appropriators Make Progress on Fiscal Year 2018 Spending Bills; Treasury Secretary Adjusts Debt Ceiling Deadline

Members of Congress left Washington for the Independence Day recess knowing that fiscal issues will be a primary focus on the legislative agenda when they return July 10. Prior to the break, the House Budget Committee appeared very close to voting on a fiscal year (FY) 2018 budget resolution that will override the caps mandated by the Budget Control Act (BCA). Unless lawmakers reach a new budget agreement, overall FY 2018 discretionary spending for defense and domestic programs must be cut $110 billion below the 2017 level.

Republicans and Democrats across Capitol Hill have raised serious concerns about the spending caps, most recently in a letter from Senators Chuck Schumer (D-NY), Patty Murray (D-WA), Patrick Leahy (D-VT), Richard Durbin (D-IL), and Debbie Stabenow (D-MI) to Senate Majority Leader Mitch McConnell (R-KY) and Appropriations Committee Chairman Thad Cochran (R-MS). Noting that “discretionary programs are critical for our national security, for creating infrastructure jobs across the nation, caring for our veterans, cleaning up our environment, and advancing scientific knowledge,” the Democrats urged their Republican colleagues to replace the current limits with higher funding levels.

Although nothing has been publicly released, press reports indicate the House budget resolution will set the caps at $621 billion for defense ($70 billion above the BCA limit) and $511 billion for non-defense (NDD) programs ($7.5 billion below the current level). The revised cap for NDD is troubling but still far better than the $54 billion cut proposed in the Trump Administration 2018 budget request. Further action on the House budget resolution is expected in mid-July.

The House Appropriations Committee is continuing to consider the FY 2018 spending bills despite the lack of agreement on funding levels other than the top lines being discussed by the House Budget Committee. This activity is meant to move the process forward even though the spending bills currently moving will likely be adjusted at a later date. House Appropriations Committee Chairman Rodney Frelinghuysen (R-NJ) said his goal is to get all the bills approved by the full committee by the end of July when Congress departs for the long summer break.

During a busy week for House appropriators, three subcommittees marked up FY 2018 spending bills. In his opening remarks at the Agriculture, Rural Development, and Food and Drug Administration Subcommittee session, Chairman Robert Aderholt (R-AL) briefly highlighted the importance of agricultural science, in particular the need for research to address ongoing crises including citrus greening and avian influenza. Ranking Member Sanford Bishop (D-GA) commended the chairman for avoiding many of the Trump Administration proposed budget cuts to agricultural programs, though he expressed concerns that the top-line number used to craft the bill was approximately $1 billion below the FY 2017 enacted level, putting pressure on many vital programs.

Expressing similar reservations about programmatic cuts in the bill, Appropriations Committee Ranking Member Nita Lowey (D-NY) also criticized the broader appropriations process for moving forward without a budget agreement or a consensus to raise the debt ceiling, a theme she reiterated at the subsequent subcommittee markups. The subcommittee passed the draft agriculture appropriations bill by a voice vote.

An Energy and Water (E&W) Appropriations subcommittee mark-up later the same day proceeded similarly. Subcommittee Chairman Mike Simpson (R-ID) described several highlights of the E&W bill, including $5.392 billion for the Department of Energy Office of Science, the same amount as in FY 2017. Subcommittee Ranking Member Marcy Kaptur (D-OH), though praising the work of the subcommittee, had serious concerns about cuts to various programs, particularly the defunding of the Advanced Research Projects Agency-Energy. The subcommittee passed the bill by a voice vote.

At the Commerce, Justice, Science, and Related Agencies (CJS) mark-up on June 29, Subcommittee Chairman John Culberson (R-TX) praised basic research as “critical to our nation,” and highlighted that the draft CJS bill would fund the Research and Related Activities account of the National Science Foundation (NSF) at the FY 2017 level of $6.03 billion. The proposed bill would reduce the overall budget of the NSF by $133 million – to $7.34 billion – with cuts coming almost entirely from the Major Research Facilities Equipment and Facilities Construction account. In his remarks, Subcommittee Ranking Member José Serrano (D-NY) praised the chairman for saving NSF from the administration’s proposed cuts. However, he stated concerns about the bill’s cuts to climate science and other programs. As with the aforementioned bills, the CJS draft passed the subcommittee by a voice vote.

In other fiscal news, the Congressional Budget Office (CBO) released a report providing a revised estimate of the date the U.S will reach the debt ceiling. According to CBO, the Treasury Department has enough cash to continue borrowing under the current limit through early to mid-October but warned that could change depending on revenues over the next few months. Treasury Secretary Steven Mnuchen is urging Congress to raise the debt ceiling no later than August, a plea likely to be ignored by legislators given the latest CBO projections.