Quick Hit – August 5, 2016

The calm before the presidential election storm has begun as the confetti finally settled and both parties’ conventions came to a close last week. With Congress in recess and both presidential nominations firmly in place, now is the perfect opportunity to do a brief recap of where the year has taken us thus far and where we see the legislative path turning in the coming months.

Several events have conspired to bring the legislative process to an effective standstill: the extended Congressional recess through Labor Day; limited scheduled legislative days remaining (21); and, the election quickly approaching in November. It is highly unlikely that any appropriations bill will get to the President’s desk before the election.

What has happened in 2016 so far?

Appropriations subcommittees in both houses have been busy over the weeks leading up to the current recess, but the movement of House bills through committee overshadows those of the Senate. Here’s the summary of progress in both chambers (defense listed in separate table below):

The Senate:

Commerce/Justice/Science – committee approved 30-0 (4/21/16)
Energy/Water – initial Senate passage 90-8 (5/12/16)
Agriculture – committee approved 30-0 (5/19/16)
Legislative Branch – committee approved 30-0 (5/19/16)
VA/MILCON – initial Senate passage 89-8 (5/19/16)
Transportation HUD – initial Senate passage 89-8 (5/19/16)
Homeland Security – committee approved 30-0 (5/26/16)
Labor HHS – committee approved 29-1 (6/9/16)
Interior-Environment – committee approved 16-14 (6/16/16)
Financial Services – committee approved 30-0 (6/16/16)
State-Foreign Operations – committee approved 30-0 (6/29/16)
Military Construction, Veterans Affairs, and Related Agencies subcommittee was resolving differences on its appropriations bill before the break

The House:

Agriculture 5054 – committee approval voice vote (4/19/16)
Legislative Branch – initial House passage 295-129 (5/19/16)
Agriculture 5393 – committee approval voice vote (5/24/16)
State-Foreign Operations – committee approval voice vote (5/24/16)
Labor/HHS/Education – initial House passage 233-175 (6/10/16)
Commerce/Justice/Science – initial House passage 282-138 (6/16/16)
Financial Services – committee approval voice vote (6/22/16)
Energy/Water – initial House passage 239-185 (7/7/16)
VA/MILCON – committee approval voice vote (7/12/16)
Homeland Security – initial House passage 231-196 (7/14/16)
Interior-Environment – committee approval 31-19 (7/14/16)

Defense bills recap…

After rejecting a proposed amendment from the House on the FY17 National Defense Authorization Act, the Senate agreed to move the bill to conference when the recess ends after Labor Day. The Senate began instructing its conferees during its last session, most notably including the bill’s sponsor, Senator McCain, and the recently popularized Senator Tim Kaine of Virginia.

The $18 billion shift of OCO funds into the base budget contained in the House version of the NDAA will be the primary point of contention of the September conference. As OCO funding is not subject to congressional discretionary spending ceilings, many Democrats feel that the bill uses OCO inappropriately as a gambit to raise overall defense spending. The House version of the NDAA will attempt to force the President’s hand in passing a resolution to raise defense spending and override the budget caps set in 2011 and reaffirmed in 2015. House Republicans are hoping that shifting funds from OCO will reveal how low the base budget has become; Republicans have recently been underlining the need for increased funding in order to match President Obama’sincreased troop posture in Afghanistan, expressing their frustration that the latter has happened without the former. While an increase in defense spending is a mutually shared goal between both parties, the Democratic administration and its congressional representatives are emphasizing the importance of adhering to the Bipartisan Budget Act of 2015 in which any increase in funding must be distributed equally between defense and non-defense areas.

Going hand in hand with the NDAA are the appropriations bills coming out of the SAC-D and the HAC-D, which would provide the funding for the provisions, detailed in the NDAA. While the House bill has moved along without a hitch, the Senate version has encountered more obstacles; Senate Democrats have prevented it from moving to a floor vote. The bill failed to proceed after a 55-42 vote two weeks ago. SAC Chairman Thad Cochran (R-Miss) commented, “The Senate has a responsibility to give our men and women in uniform the resources they need to defend our nation. We do so in this bipartisan bill. Filibustering its consideration causes uncertainties that endanger our national security…” Senate Democrats are resisting what they see as extremely partisan provisions in the appropriations bill, holding up its progress. The Senate leaders must be able to persuade votes after the recess if the bill is to survive. This standstill will very likely lead to an omnibus bill before the year is up in order to avoid a government shut down.

Recap of defense bills progress:

Looking ahead…

Pressure will build in September to find short-term relief in a Continuing Resolution that buys time until after the election November 8^th. Elections have a way of clarifying the “trade space” and focusing the political options. Look for a much-maligned Omnibus before Christmas.

Longer term (early 2017), look for a smaller (less than $10B) additional Overseas Contingency Operations (OCO) supplemental appropriation.