Endgames for FY17 Budget Process (June 9)

Mike & Co.,

House Appropriations cleared an FY17 spending bill today that would limit SEC and IRS funding, block financial regulations, and add a new section to the bankruptcy code.  Today’s voting also included an amendment that restricts CFPB funding for its Pay Day Loan rules until the organization submits a report to Congress on its impacts for consumers. The first vote was 30-17; the amendment passed 30-18.

Sounds like regular order so far.  But regular order is the increasingly rare exception and seems beyond the pale in an election year.  What is the probable budget endgame this year — an omnibus bill in a post-election lame duck session, or a much more dire omnibus outcome.

The McConnell Principle that a vote on the nomination of one of nine Associates Justices must await the vote of the people may not apply equally to $4 trillion worth of spending, but considering the black swans we’ve seen this year…

Best,

Dana

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Overview

Despite the fact that Speaker Ryan’s hopes for passing the FY2017 budget through regular order have almost been dashed on the rocks of party infighting, the budget process through June has looked largely the same as it always does at this stage.  But the Speaker’s insistence on using regular order to pass the latest budget has turned what would otherwise be business as usual into a showcase of his own party’s infighting.

Status of Regular Order 

Of the twelve Appropriations subcommittees responsible for drafting spending authorization bills, eleven have at least approved a measure through voice vote – that’s five more than just three weeks ago.  The lone holdout is State-Foreign Operations.  Through the lens of a regular legislative calendar the appropriations subcommittees are on schedule, which is actually somewhat surprising.

Impact of Convention Season

Recent events in the Senate may jeopardize the authorizations activity we’ve seen in the past weeks.  McConnell has lined up procedural votes for amendments to the National Defense Authorization Act by John McCain and Jack Reed – the former increasing defense spending in the Overseas Contingency Operations account, a literal war chest, and would authorize an additional 15,000 active-duty troops in the next year.

Democrats are not unhappy and have claimed that taking votes on these amendments threatens to destroy the bipartisan momentum that’s built up behind the appropriations process so far this year.  Sens. Schumer and Reid, the presumptive and current Minority leaders, have both said that they plan to hold Republicans accountable to the two-year spending deal that President Obama and John Boehner agreed to last year.

This strife marks the transition from primary season to convention season – as candidates begin to square off against rivals in the opposite party, they begin to look toward staking out positions for voters to look at.  One easy way to accomplish that in June is through the appropriations process, where their amendments are sure to garner attention from both the media and their colleagues.

Alternatives to Regular Order 

Ryan’s dream for a budget passed through regular order has faded in recent weeks, in part because his own party continues to struggle with settling on a baseline spending number well into the spring months.  As has happened in recent years there’s a chance that the federal budget will come to rely on some form of omnibus spending bill.

A third option, besides regular order or an omnibus, also exists for the budget: The McConnell model.  He has said that Congress won’t act until the American people have spoken. 3 trillion dollars’ worth of spending would appear to be just as important as a new Associate Justice.   Sen. McConnell may regret his musings about “waiting till the American people have spoken.”  More than that, we have seen this play out before and it is not pretty.

Look for floor votes on the appropriations bills that are out of committee already, as well as committee votes for spending bills that still need them.  As the process continues apace we are entering the most tumultuous part of the process – the bills that come to the floor of each chamber will now be subject to amendments by members.  If Congressional leadership chooses to allow for an open-amendment process, as they’ve said they would in the past, then the coming weeks will be an early test for budget writers.

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