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Category: 2018 UW Federal Agenda

Shut Down Show Down?

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Congress is back this week after a two week Passover/Easter Recess, and the first order of business is reaching some agreement to keep the government open beyond 12:01 am Saturday morning. Tensions over funding have risen during the recess as the Administration has begun a hard push for more defense money and a significant amount ($1.4 billion) to begin work on a wall along the Mexican border. Initially, OMB Director Mulvaney had insinuated that the lack of funding for the Administrations priorities (in both the FY2017 supplemental request and the FY2018 skinny budget) would result in a veto. In recent days, however, Administration officials generally have stopped short of insinuating the President would veto any FY2017 measure not including these funds.

Democrats in the House and Senate have been very vocal that including any funding for a border wall is a nonstarter. Mulvaney has suggested that a path forward with Democrats would be including funding for insurance subsidies under Obamacare that are used to reduce the cost of co-payments and deductibles, which is something the Trump Administration has vowed to cut.

Realistically, Republican leadership in the House and Senate know that no continuing resolution (CR) or omnibus for FY2017 can pass either body without some Democratic support. Bottom line: Democratic cooperation is needed in the Senate for any spending deal to pass because 60 votes are required to advance legislation and Republicans control only 52 seats.

As negotiations continue to drag on, the more likely a short term is likely to move, simply to give Congress more time to negotiate a broader package or figure out a resolution for FY2017.

Additionally, House Republicans are working with the White House to try to revive a replacement plan for Obamacare as negotiations continue on a compromise that might win a majority vote. However, Members return to Capitol Hill this week with no sign of an imminent deal that would overcome objections from both moderate and conservative camps,

What’s driving this push? The Trump Administration’s first 100 days in office winds up on Saturday. Traditionally, the first 100 days of a new administration is the most active and influential (CNN has a good overview). While the Trump Administration has not been as successful legislatively as it would have liked, there have been successes in rolling back Obama Administration regulations and confirming a Supreme Court nominee. That said, Trump Administration officials would like a big win prior to Saturday and pushing some version of Obamacare repeal and a FY2017 are the two options being pushed right now.

Meanwhile, the debt ceiling is likely to make a summer appearance. Technically, the federal government exceeded its spending authority on March 15th. The Treasury has been using so-called extraordinary measures to extend the government’s borrowing capacity for several more months. That capacity should last until “sometime this fall” before Congress would need to raise the debt limit again, according to an estimate from the Congressional Budget Office. Treasury Secretary Steve Mnuchin has privately accelerated the timeframe for Congress to address the issue and raise the debt ceiling to some time this summer. This move would coincide with tax reform provisions (or perhaps still Obamacare repeal) that Congress would consider.

Stay tuned.

 

Two Weeks of Recess

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As Congress begins a two-week recess for Easter and Passover, the countdown clock begins toward a potential government shutdown.

Lawmakers left town last Friday insisting there would be no government shutdown when the current stopgap measure funding the government expires on April 28. For several weeks, House and Senate appropriators have been slowly negotiating a catchall  or omnibus spending package to complete FY2017, and have been making headway. That said, obstacles remain.  

One primary obstacle is when Congress reconvenes in the final week of April, there will be only four legislative days left when both chambers are in session to get a catchall bill introduced and enacted. While its is certainly something that Congress can achieve, the timeframe leaves little room for error. 

A second major obstacle is that negotiators have yet to definitively resolve how – or whether – to accommodate President Donald Trump’s 11th-hour request for an extra $33 billion in military and border security money. While the proposal is a nonstarter with most Democrats, how to handle the border wall request in the supplemental is causing internal Republican concerns. In March, Trump has requested an extra $3 billion for enhanced border security, including about $1 billion that would be used as a down payment toward a wall. The Administration also wants to give the military a $30 billion boost for the current FY 2017, which would be offset by cuts to domestic spending. However, to do so so would require renegotiating the overall defense spending level permitted under a two-year bipartisan budget deal, which pushed off the sequester caps for two years. To change those caps would certainly require a bipartisan deal. How or how much Congress addresses the supplemental request remains to be seen.

If negotiations stall, a fallback option would be to pass another CR that would simply extend current funding levels for several more weeks or months. That option, however, riles defense hawks because it would leave the military unable to start new programs and gives pause to Democrats, who are concerned about the tremendous latitude given to spending and programs given to the Administration during a CR.

 

Stay tuned.

America First Budget Released

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The Trump Administration released its first budget, called the American First Budget this morning. Coming in at 62 pages total, the “America First” budget blueprint is what is known as a “skinny budget” is somewhat scant on details. The budget’s main theme is doing more with less by eliminating “nonfunctioning” or duplicative programs and wasteful spending; streamlining federal operations through accountability measures within the agencies; and regulatory reform. The $1.15 trillion proposal in discretionary spending would amount to an overall cut of 1.2 percent, when compared to current spending levels on an annualized basis, according to the White House document. The proposed cuts will be unpopular with Congressional Republicans and Democrats alike, most notably the proposed $5.8 billion cut to the National Institutes of Health. 

Agencies that would receive increased funding include, the Department of Defense, Department of Homeland Security, and Veterans Affairs.  The blueprint specifically calls out the need to ramp up and focus on military operations as well as border security. This increased spending would be accomplished without increasing the deficit by cutting the amount nondefense discretionary (NDD) spending.  All other NDD agencies mentioned are cut between 0.8-31%. Of note, there is no mention of the National Science Foundation anywhere in this document.  

Previously reported items – such as the $54 billion in defense spending (a $52 billion increase over FY2017 CR levels) to the DOD is included to ramp up military readiness and operations; a 6.8% increase to DHS, including $1.5 billion to remove illegal immigrants and $2.6 billion for a wall along the southern border; cuts to NOAA’s Sea Grant and EPA programs – are included in the blueprint. What has not been widely reported is the Administration’s request for an additional $65 billion for the DOD’s Overseas Contingency Operations (OCO) fund. This funding does not count against the budget caps in the sequester.

In terms of next steps, it should first be noted that the Administration’s budget is a kickoff to the negotiations of the upcoming fiscal year’s budget and appropriations negotiations. In this case, that would be FY2018. It is a guiding document intended to give a glimpse into the priorities and intended policies of the Administration and it is rarely, if ever, taken up whole cloth by Congress.

Second, this blueprint, as it is presented, is not possible under the current budget structure without Congress acting legislatively. The Budget Control Act, which created the sequester, specifically created a firewall between defense spending and NDD spending. This means, the White House and Congress cannot cut NDD funds to shift over to defense funding without changing the law. If defense spending increases or decreases, so must the other.  It cannot be done by budget reconciliation alone; all changes will require 60 votes in the Senate.

This budget proposes devastating cuts to scientific programs. It would eliminate long-standing, successful programs, which have had profound impact on our community and the nation. These are programs that enjoy bipartisan support in Congress. Many of the programs listed for cutting or reductions are long-time federal priorities of the UW and Congress, including funding NIH. UW has long-advocated for the value of these programs and their funding and we will continue to do so to our delegation and with fellow universities and broader stakeholders within an interest in preserving this funding.

There are a host of programs singled out to be cut. Those are listed at the end.

Here are highlights:

USDA

USDA is cut by 21% to $17.9 billion from the FY 2017 CR level.

  • SNAP and WIC are preserved at $6.2 billion to serve all projected participants.
  • Fully funds wildland fire preparedness and suppression activities at $2.4 billion.
  • Continues to fund NIFA, ARS and ag research at $350 million (which is a cut), while prioritizing agriculture and food issues such as increasing farming productivity, sustaining natural resources, including those within rural communities, and addressing food safety and nutrition priorities.

—

Commerce

Commerce is cut by 16% or $.15 billion over FY2017 CR levels to $7.8 billion.

  •  Eliminates the Manufacturing Extension Partnership (MEP) program.
  •  Cuts $250 million in targeted National Oceanic and Atmospheric Administration (NOAA) grants and programs supporting coastal and marine management, research, and education including Sea Grant (because Sea Grant primarily benefits industry and State and local stakeholders). The budget maintains these programs are a lower priority than core functions maintained in the Budget such as surveys, charting, and fisheries management. It does not go into detail as to which NOAA coastal and marine programs are cut, but it is presumed to be NOAA’s Ocean and Atmospheric Research office.
  • National Weather Service forecasting capabilities are preserved by investing more than $1 billion while continuing to promote efficient and effective operations.
  • Maintains NOAA’s Joint Polar Satellite System and Geostationary Operational Environmental Satellite programs to remain on schedule.

—

Defense

DOD receives $639 billion, which is a $54 billion total increase (a $52 billion increase from the 2017 annualized CR level). The total includes $574 billion for the base budget, a 10% increase from the 2017 annualized CR level, and $65 billion for Overseas Contingency Operations.

—

Education

ED is cut by $9 billion, or 13% from the FY2017 CR levels, to $59 billion.

  • School Choice options are ramped up by $1.4 billion to a total of $20 billion (it also assumes $100 billion in state and local funding). This additional investment in 2018 includes a $168 million increase for charter schools, $250 million for a new private school choice program, and a $1 billion increase for Title I, dedicated to encouraging districts to adopt a system of student based budgeting and open enrollment that enables Federal, State, and local funding to follow the student to the public school of his or her choice.
  • Maintains IDEA funding of $13 billion.
  • Maintains Pell Funding at $3.9 billion, but cancels/rescinds the $3.9 billion carryover funding, which ensured the stability of the program.
  •  Eliminates:
    • Supporting Effective Instruction State Grants
    • 21st Century Community Learning Centers
    • Supplemental Educational Opportunity Grant
    • Striving Readers
    • Teacher Quality Partnership
    • Impact Aid Support Payments
  • International Education programs are eliminated, which is presumed to be Title VI International Education and Fulbright-Hays.
  • Cuts TRiO and GEAR UP programs by $193 million to $808 million from the FY2017 CR level. In FY2016, TRiO was funded at $900 million and GEAR Up received $323 million. It is unclear how the cuts will be allocated. The budget says, “Funding to TRIO programs is reduced in areas that have limited evidence on the overall effectiveness in improving student outcomes. The Budget funds GEAR UP continuation awards only, pending the completion of an upcoming rigorous evaluation of a portion of the program.”

 —

Energy

DOE is cut by 5.6% percent to $28 billion.

  • $120 million to restart licensing activities for the Yucca Mountain
  • $6.5 billion to advance the Environmental Management program mission of cleaning up the legacy of waste and contamination from energy research and nuclear weapons production.
  •  Office of Science is cut by $900 million (it is unclear what and where). The FY 2016 level is $5.3 billion. The cut ensures the Office of Science “continues to invest in the highest priority basic science and energy research and development as well as operation and maintenance of existing scientific facilities for the community.”
  • “Focuses funding for the Office of Energy Efficiency and Renewable Energy, the Office of Nuclear Energy, the Office of Electricity Delivery and Energy Reliability, and the Fossil Energy Research and Development program on limited, early-stage applied energy research and development activities where the Federal role is stronger.” This presumes a cut, reflected in the overall cut, and reprioritization of projects and programs, but there are no details.
  • Eliminates
    • ARPA-E
    • Title 17 Innovative Technology Loan Guarantee Program
    • Advanced Technology Vehicle Manufacturing Program
    • Weatherization Assistance Program
    • State Energy Program

 —

HHS

HHS is cut by 17.9%, or $15.1, billion to $69 billion. (Right now, this is a nonstarter with Congress and totally in opposition to the efforts of the House and Senate in the last two appropriations cycles and the December 2016-passed 21st Century Cures Act).

  • $500 million increase to opioid abuse funding
  • Recalibrates Food and Drug Administration (FDA) medical product user fees to over $2 billion in 2018, approximately $1 billion over the 2017 annualized CR level, and replaces the need for new budget authority to cover pre-market review costs. (NOTE: Congress sets the product user fees, not the Administration).
  • Cuts National Institutes of Health’s (NIH) by $5.8 billion to $25.9 billion and proposes unclear “consolidations and structural changes across NIH organizations and activities.”
  • Creates a new Federal Emergency Response Fund to rapidly respond to public health outbreaks, such as Zika
  • Eliminates:
    • Eliminates $403 million in health professions and nursing training programs, which is assumed to be Title VII and Title VIII programs.
    • Low Income Home Energy Assistance Program (LIHEAP)
    • Community Services Block Grant (CSBG)
    • Fogarty International Center
  • Consolidating the Agency for Healthcare Research and Quality within NIH

 —

Homeland Security

DHS receives a 6.8% increase to $44.1 billion.

  • Adds $2.6 billion for a wall along the US’s southern border.
  • Adds $314 million to recruit, hire, and train 500 new Border Patrol Agents and 1,000 new Immigration and Customs Enforcement law enforcement personnel in 2018.
  • Adds $1.5 billion for expanded detention, transportation, and removal of illegal immigrants.
  • Adds $1.5 billion for DHS cyber activities that protect Federal networks and critical infrastructure.
  • Restructures selected user fees for the Transportation Security Administration (TSA) and the National Flood Insurance Program (NFIP) to ensure that the cost of Government services is not subsidized by taxpayers who do not directly benefit from those programs. (Most of these are Congressionally directed, but reauthorized semi annually).
  • Cuts FEMA by $667 million including cutting Pre-disaster Mitigation Grants and Proposes a 25% nonfederal cost share match on FEMA preparedness grants.
  • Eliminates “unauthorized or underperforming” TSA programs by $80 million. 

— 

Housing and Urban Development

HUD is cut by $6.2 billion, or 13.2%, to $40.7 billion.

  •  Increases safe and healthy lead-safe homes programs by $20 million to $130 million.
  •  Eliminates
    • Community Development Block Grant (CDGB) ($3 billion)
    • HOME Investment Partnerships Program
    • Choice Neighborhoods
    • Self-help Homeownership Opportunity Program
    • Section 4 Capacity Building for Community Development and Affordable Housing

 —

Interior

DOI is cut by 12%, or $1.5 billion, to $11.6 billion.

  • Increases funding by an unspecified amount for DOI programs that support environmentally responsible development of energy on public lands and offshore waters.
  •  Eliminates unnecessary, lower priority, or duplicative programs, including discretionary Abandoned Mine Land grants that overlap with existing mandatory grants, National Heritage Areas that are more appropriately funded locally, and National Wildlife Refuge fund payments to local governments that are duplicative of other payment programs.
  • Reduces funds for new federal lands acquisition.
  • Reduces funds for other DOI construction and major maintenance programs.
  • $900 million for DOI’s U.S. Geological Survey to focus investments in essential science programs. This includes funding for the Landsat 9 ground system, as well as research and data collection that informs sustainable energy development, responsible resource management, and natural hazard risk reduction, which is a slight cut.

 —

Justice

DOJ is cut by 3.8 percent or $1.1 billion to $27.7 billion.

  • An increase of $249 million, or 3 percent, above the 2017 annualized CR level for the Federal Bureau of Investigation (FBI), including $61 million more to fight terrorism and combat foreign intelligence and cyber threats and address public safety and national security risks that result from malicious actors’ use of encrypted products and services.
  •  An increase of $80 million to hire 75 additional immigration judge teams.
  • $171 million increase for additional short-term detention space to hold Federal detainees, including criminal aliens, parole violators, and other offenders awaiting trial or sentencing.
  • Cuts federal prison construction due to an over-abundance in space but provides $80 million for the activation of an existing facility to reduce high security Federal inmate overcrowding and a total of $113 million to repair and modernize outdated prisons.

 —

Labor

DOL is cut by 21%, or $2.5 billion, for $9.6 billion for the Department of Labor, a $2.5 billion or 21 percent decrease.

  • Eliminates:
    • Senior Community Service Employment Program (SCSEP)
    • Bureau of International Labor Affairs grant program
    • Occupational Safety and Health Administration’s unproven training grants
  • Decreases Federal support for job training and employment service formula grants, shifting more responsibility for funding these services to States, localities, and employers.
  • Refocuses the Office of Disability Employment Policy, eliminating less critical technical assistance grants and launching an early intervention demonstration project to allow States to test and evaluate methods that help individuals with disabilities remain attached to or reconnect to the labor market.

 —

International Programs

USAID is cut by 28% to $25.6 billion. The Budget also requests $12.0 billion as Overseas Contingency Operations funding for extraordinary costs, primarily in war areas like Syria, Iraq, and Afghanistan, for an agency total of $37.6 billion. Treasury International Programs are cut by $803 million or 35% to $1.5 billion.

  • Gives $3.1 billion for Israel
  • Eliminates
    • Global Climate Change Initiative
    • Emergency Refugee and Migration Assistance
    • Complex Crises Fund
    • The Budget also eliminates direct appropriations to small organizations that receive funding from other sources and can continue to operate without direct Federal funds, such as the East-West Center, but no other specific programs are mentioned.
  • Reduces funding for the Department of State’s Educational and Cultural Exchange (ECE) Programs.
  •  Cuts $650 million from multilateral development banks, including the World Bank.

 —

Transportation

DOT would be cut by 13% or $2.4 billion to $16.2 billion. Most notably this budget would initiate a multi-year reauthorization proposal to shift the air traffic control function of the Federal Aviation Administration to an independent, non-governmental organization.

  • Eliminates:
    •  Essential Air Service (EAS) program
    • TIGER Grants because they are unauthorized

— 

Treasury

Treasury is cut by 4.1% to $12.1 billion.

  • Cuts IRS by $239 million and presumes to make everyone e-file.
  • Eliminates
    • Community Development Financial Institutions (CDFI) Fund grants
  • Cuts duplicative staff.

 —

Veterans Affairs

The VA gets a 6% increase to $78.9 billion.

  • $4.6 billion increase in discretionary funding for VA health care
  • Extends and funds the Veterans Choice Program

 —

EPA

The EPA is cut by 31% or $2.6 billion to $5.7 billion including eliminating 3,200 of the EPA workforce.

  • $2.3 billion for the State Revolving Funds, which is a $4 million increase.
  • $20 million for the Water Infrastructure Finance and Innovation Act program.
  •  Reins in Superfund administrative costs and emphasizes efficiency efforts by funding the Hazardous Substance Superfund Account.
  •  Eliminates, (not wholly inclusive):
    • Funding for the Clean Power Plan
    • International climate change programs
    • Climate change research and partnership programs (presumed to be EPA STAR grants)
    • Great Lakes Restoration Initiative, the Chesapeake Bay, and other geographic programs.
    • Energy Star Program
    • Targeted Airshed Grants
    • Endocrine Disruptor Screening Program
    • Infrastructure assistance to Alaska Native Villages and the Mexico Border
  • Reduces EPA’s Office of Enforcement and Compliance Assurance budget to $419 million, which is a $129 million cut.
  • Cuts Categorical Grants by $82 million to $597 million.

 —

NASA

NASA has a .8% decrease to $19.1 billion.

  • Eliminates for Earth Sciences missions (PACE, OCO-3, DSCOVR, Earth-viewing instruments, and CLARREO Pathfinder)
  • Reduces funding for Earth science research grants to an unknown amount.
  • Eliminates the Office of Education, which includes NASA Space Grant 

—

Small Business

SBA is cut by 5% to $826.5 million. Cuts PRIME technical assistance grants, Regional Innovation Clusters, and Growth Accelerators. Maintains $28 million in microloan financing and technical assistance to help serve, strengthen, and sustain the smallest of small businesses and startups.

 

Specific Programs Cited for Elimination:

  • African Development Foundation
  • Appalachian Regional Commission
  • Chemical Safety Board
  • Choice Neighborhoods (HUD)
  • Community Development Block Grant (CDBG) at HUD
  • Community Development Financial Institutions (CDFI) Fund grants (Treasury)
  • Community Services Block Grant (CSBG) at HHS
  • Corporation for National and Community Service
  • Corporation for Public Broadcasting
  • Delta Regional Authority
  • Denali Commission
  • DOE’s ARPA-E
  • Economic Development Administration
  • ED’s Supporting Effective Instruction State Grants
  • ED’s 21st Century Community Learning Centers
  • ED’s Supplemental Educational Opportunity Grant
  • ED’s International Aid Programs
  • ED’s Striving Readers
  • ED’s Teacher Quality Partnership
  • ED’s Impact Aid Support Payments
  • EPA change research and partnership programs (presumed to be EPA STAR grants)
  • EPA Great Lakes Restoration Initiative, the Chesapeake Bay, and other geographic programs.
  • EPA Energy Star program
  • EPA Targeted Airshed Grants
  • EPA Endocrine Disruptor Screening Program
  • EPA infrastructure assistance to Alaska Native Villages and the Mexico Border
  • HHS’s health professions and nursing training programs (presumably Title VII and Title VIII)
  • HUD’s HOME Investment Partnerships Program
  • HUD’s Section 4 Capacity Building for Community Development and Affordable Housing
  • HUD’s Self-help Homeownership Opportunity Program
  • Institute of Museum and Library Services
  • Inter-American Foundation
  • U.S. Trade and Development Agency
  • Legal Services Corporation
  • Low Income Home Energy Assistance Program (LIHEAP)
  • Manufacturing Extension Partnership (MEP) program
  • Minority Business Development Agency
  • National Endowment for the Arts
  • National Endowment for the Humanities
  • NASA Office of Education, including NASA Space Grant
  • Neighborhood Reinvestment Corporation
  • Northern Border Regional Commission
  • Occupational Safety and Health Administration’s training grants
  • Overseas Private Investment Corporation
  • State Criminal Alien Assistance Program
  • Labor’s Senior Community Service Employment Program (SCSEP)
  • Transportation’s Essential Air Service (EAS) program
  • USDOT  TIGER Grants
  • United States Institute of Peace
  • United States Interagency Council on Homelessness
  • USDA Water and Wastewater loan and grant program
  • USDA McGovern-Dole International Food for Education program
  • USDA Rural Business and Cooperative Service, reduces discretionary activities
  • Woodrow Wilson International Center for Scholars

 

 

 

Trump Requests Additional Funding for FY2017

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Today, the Administration sent a supplemental appropriations request to Congress asking for an additional $30 billion for the Department of Defense (DOD) to rebuild the U.S. Armed Forces and accelerate the campaign to defeat the Islamic State of Iraq and Syria (ISIS), and an additional $3 billion for the Department of Homeland Security (DHS) for urgent border protection activities. For DOD, $5 billion would go into the Overseas Contingency Operations fund, which is not subject to sequester budget limits.

The Administration proposes the remainder, $18 billion, to come from unspecified nondefense discretionary spending.

Federal Relations is tracking this issue.

Health Care Keeps Moving, Senate Moves on Confirmations

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The House will keep moving on health care reform as the Capitol recovers from snow Monday night. While GOP leaders quickly dismissed the CBO’s report on the replacement bill released late Monday as either incomplete or inaccurate, Democrats held the report as evidence that repeal the law should be stopped. The House appears to be moving full steam ahead. The House Budget Committee is next to consider the American Health Care Act (AHCA) in what should be another eventful, and long, markup.

The analysis by the CBO and the Joint Committee on Taxation found that the GOP legislation would save money by making large cuts to Medicaid and eliminating the subsidies designed to help low-income people buy insurance under the current law .  Those subsidies would be replaced by tax credits that would generally be less generous, the study said.

In the short term, the effect of the Republican plan could be painful, according to the analysis. Next year, 14 million more people would be uninsured than under current law. Average premiums for single policyholders in the individual marketplace would be 15 percent to 20 percent higher than under current law. Premiums would spike mostly because fewer people who are relatively healthy would sign up for insurance once the current law’s mandate to buy coverage ends.

But after a decade, the report said, average premiums would decline by 10 percent compared to current law because of several factors. Those include a new grant program for states, more freedom for insurers to offer less generous coverage and a younger mix of enrollees.

Over in the Senate,  GOP Senators huddled with key House committee chairmen, HHS Secretary Tom Price, and Vice President Mike Pence over lunch Tuesday to plot strategy on moving the bill forward in the Senate. Numerous Republican Senators have come out against or with extreme hesitancy to the AHCA.

All the health care issues have overshadowed two Senate confirmations this week, confirming former Indiana Senator Dan Coats as director of national intelligence and Lt. Gen. H.R. McMaster as Trump’s national security adviser.