Quick Hit – March 8, 2017

FY17 Spending Bill Movement

The FY17 spending bill has been in limbo for months. Recall that the government is presently operating under a continuing resolution that funds the government at FY16 funding levels; the CR expires April 28th.

Yesterday, the House Rules committee passed a rule allowing the FY17 defense appropriationto come to the House floor, which will happen today, for a vote that could reinvigorate the funding approval process.  The $583B defense appropriation adds $9B above President Obama’s original budget request through the Overseas Contingency Operations (OCO) account. The original bill added $18B to OCO, broke the BCA spending caps and drew much criticism from budget experts. Bipartisan support of this revised FY17 defense appropriation in the House is anticipated.

The bill will then proceed to the Senate, where it is expected to stall; Senate Democrats are not yet in agreement on proposed increases/reductions to defense and non-defense spending categories. Democrats have long held that any increases to defense spending must be matched by increases in non-defense spending.

Supplemental

A supplemental appropriation has emerged at the same time as the renewed FY17 appropriations activity. Specific details of an approximately $30B supplemental appropriation have not yet been revealed, but are expected to be released publicly in March. This supplemental is widely expected to provide a “down payment” on President Trump’s signature border wall.

FY18 Debate

Last week, President Trump formally proposed the FY18 $603B “skinny budget” for defense, providing the contours of the topline without the details. The detailed FY18 budget will not be revealed before May.  OMB Director Mulvaney claims this will be a 10% increase in defense; however, that 10% is as measured against the 2011 BCA cap baseline of $549B.  The budget cap has been evaded each of the past several years using the Overseas Contingency Operations (OCO) account.  Defense policy experts, as well as SASC Chairman McCain (pictured above) and HASC Chairman Thornberry, recognize it’s only a 3.2% increase above President Obama’s FY17 request.  The House Armed Services Committee proposes that $640B in defense spending is the required number.

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