Quick Hit – June 4, 2015

Headlines Suggest Appropriations Progress – Is it Real? We will continue to see appropriations bills move through the process and pass with Republican majorities; however, a fundamental challenge of dealing with Budget Control Act (BCA) caps will bring the process to a halt in September.

FY16 Defense Bills

In our previous Quick Look, we reported the House was on the verge of approving its version of the FY16 National Defense Authorization Act (NDAA); it passed by recorded vote 269-151. This month, the Senate Armed Services Committee is moving well ahead of its traditional schedule and reported its version of the NDAA out of committee. It has moved to the floor for debate. In recent years the NDAA, generally viewed as a must-pass bill, has been held as leverage until the budget end-game. Moving floor debate of the NDAA forward in the calendar helps assure that difficult military policy choices will be resolved before the year-end funding debate reaches its crescendo in September.

FY16 Appropriations Process

The House Appropriations Committee continues to mark up and bring appropriations bills to the floor. To date, five of twelve spending bills have come through the full committee and four have passed on the House floor. On the surface it looks like great progress. However, several bills, including defense, have not directly dealt with the need to work around the existing Budget Control Act (BCA) caps. The BCA caps apply across the board to all aspects of government.

A significant increase in the Overseas Contingency Operations fund, now renamed in the House as the Global War On Terrorism(GWOT) fund, allows the House defense appropriations measure to appear to comply with the BCA caps while simultaneously adding $38B to the GWOT. At issue is that the $38B is considered “off budget” and is not factored into the debt calculation…free money.

House Democrats and conservative House Republicans don’t care for this work- around, calling it a gimmick, but have so far been unable to prevent appropriations bills from moving forward.

The Senate is on the verge of passing appropriations bills out of committee, but none have yet made their way to the floor for the ultimate vote test.

Senate Democrats, and to a lesser extent, the President and his senior staff, continue to demand that Congress provide relief from the BCA caps for both defense AND non-defense aspects of government.

Stay tuned.