Wrap-Up: FY17 Budget Process (May 26)

Mike & Co. –-

As we turn the corner into summer, the FY2017 budget making process thus far this year looks very familiar — appropriations bills are readied for House consideration even without a finalized budget resolution to guide them.  The Senate has begun to replace the text in older appropriations measures from last year, using these “shells” to jumpstart the appropriations process in their chamber.  

This sort of outside the box legislating flies in the face of the Speaker’s insistence that the House pass this year’s budget via regular order, but it’s hard to see where his optimism is coming from.  

But this year is different.  What does the FY17 budget process endgame look like through the lens of election year at this juncture as the conventions approach and the general election campaign begins?

Best,

Dana

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Coming off FY2016, the FY17 budget process seemed to be a simple one.  Recently retired Speaker John Boehner had used his last days in power to secure an agreement with President Obama that set spending limits for the following year.  Confident talk of passing a budget through regular order added an air of optimism to proceedings.

With an abbreviated legislative calendar, fast action leading to an FY17 budget on time was the goal of a GOP hoping to paint a picture of reliable leadership.  Instead, they’ve created the political equivalent of the portrait of Dorian Gray.  Last year ended up the same way.  Brave talk of regular order budgeting ending in a messy fight to pass through the budget as an omnibus package.

But then…

The Freedom Caucus demanded a budget of $1.040 trillion dollars, down from the $1.070 trillion deal that was reached last year; not long after that the Republican Study Committee released its own budget to the tune of $974 billion.

Beyond the problem of getting GOP members to agree on top-line spending figures, Congressional leadership need to find a way to placate lawmakers on various fronts.  House appropriations measures are often subject to an open amendment process, whereby any member can attach modifications to the bills.

While Ryan has the luxury of using the House Rules Committee to limit the ability of members to attach amendments to these bills, the Freedom Caucus can still eat up valuable floor time in an election year.  Some members have demonstrated a knack for attaching amendments that are nearly as bothersome as those from across the aisle.

For example, the fight over LGBT protections has leaked into the spending bill process.  Today, an energy and water spending bill failed on the House floor  after a Democratic amendment to ensure protections for the LGBT community was included in the legislation.

House Republicans have remained steadfast in their opposition to any amendment that protects LGBT employees from workplace discrimination. Ironically, Ryan told Republicans in a closed-door conference meeting this morning that the fight over amendments is a consequence of the open process that lawmakers said they wanted

In the Senate, no functional analogue to House Rules exists, so the majority often seeks to make a deal with the minority to avoid a deluge of amendments.  But the Senate may end up being a pit of quicksand for appropriations measures.

Relevant Developments

A FY2017 financial services funding bill released by House appropriators today affects two of our most disccussed agencies – the SEC and the CPB:

• The SEC: The bill would allocate $1.5 billion to the SEC which is far below the $1.8 bliiion that President Obama had requested. In addition to that, it would extend the ban on implementing a spending disclosure requirement for corporations and create an SEC office and advisory committee focused on small business.

• The CFPB: Once again, House Republicans will attempt (and most likely fail) to incorporate the CFPB into the appropriations process – currently it is funded by the Fed. Moreover, the bill would replace the single director of the CFPB with a five-member commission and require the CFPB to study the use of arbitration before issuing new regulations

• Also pertinent:  The funding measure contains language that would give big financial firms more time to dispute a “systemically important” designation by the Financial Stability Oversight Council, which would subject them to stricter regulation.

In a legislative version of the Martian Chronicles, Senate appropriations subcommittees have approved six out of 12 bills so far, all on 30-0 votes. The House committee has approved five bills, with all going through on voice votes; that suggests some bipartisan backing.  As if..

Now, just add an election year

It’s hard to imagine the budget process being much more convoluted than it already is, so in that regard it may not make much difference that 2016 is an election year.  As we’ve seen, the appropriations committees are getting on with their work pro forms if without a budget resolution.  Concerns are growing that appropriations bills will be dogged of not ultimately undermined by messaging amendments.  This year’s budget process is embarrassing to the GOP, damaging to Ryan’s reputation, indicative of a political party that’s barely keeping hidden its internal fracturing.  Bad as that sounds, the process is likely to look even worse after the election.