Budget and Appropriations: Where Do We Go From Here?


As the Senate and House move to finalize fiscal year (FY) 2017 funding for the federal government, it is becoming increasingly clear that three obstacles – two pieces of legislation and an on-going congressional investigation – stand in the way of a rapid and conclusive FY2017 funding bill.

The current continuing resolution (CR) expires on April 28, at which point a new CR or other funding bill must be passed to avoid a government shutdown. While April 28 may seem like a long way off and plenty of time for Congress to complete the appropriations process, the reality is that Congress will only be in session for 26 legislative days before the CR expires and funding for the federal government runs out. Additionally, most of the work has to be completed in March because Congress will recess for two weeks in April for the Easter and Passover holidays. As if these limitations were not enough, Congress must deal with two pieces of legislation and an on-going congressional investigation that may substantially slow the legislative process.

The first obstacle to rapid completion of the appropriations process is the defense appropriations bill. It is a must pass appropriations bill and a priority for many members of Congress. The outcome of this bill will set the tone for the rest of the debate around funding, which is why there is little-to-no work being done on other appropriations bills.

The second obstacle is the American Health Care Act (AHCA), which House leaders introduced this past Monday, March 6. Designed to repeal and replace the Affordable Care Act (ACA) – often referred to as Obamacare – House and Senate leaders have indicated that they want this bill passed and on the president’s desk before the April recess.

The third obstacle is the on-going turmoil around alleged collusion between the Trump campaign and Russian President Vladimir Putin.

The outcome of each of these obstacles will have a tremendous impact on non-defense discretionary program funding.

Why do they matter? 

The calendar matters because there is actually very little time to resolve all of the outstanding appropriations issues.

The defense appropriations bill that Congress will pass and the president will sign will matter greatly. Under current budget rules, there must always be parity between defense and non-defense discretionary programs. That means for every dollar increase or decrease in funding for either half of the discretionary pot, there must also be an equal increase or decrease on the other side. But Congress could change that and permit defense discretionary funding to increase so long as there is an opposite reaction in non-defense discretionary funding. In other words, Congress may choose to pay for an increase in defense spending with a decrease in non-defense discretionary funding. And even if this does not happen this year, there is clear evidence that it will happen with the FY2018 budget when the majority is expected to increase defense discretionary spending by $54 billion. According to appropriations committee staff, that kind of an increase in defense spending could result in a 13 to 20 percent cut in non-defense discretionary funding, cuts that on a program-by-program basis could even be more.

The AHCA matters greatly, as well. The effort to repeal and replace the ACA may prove much more difficult than originally expected. Already, several senators and many House members have expressed significant reservations about the bill, which was just released on Monday, March 2. If that happens, efforts to pass the AHCA may eat up a significant amount of legislative time, leaving little time for either chamber to address appropriations issues. More importantly, public opinion of Congress is likely to diminish if it cannot complete the work leadership has been promising to do for eight years, and further loss of public support would severely hamper Congress’s ability to adopt other legislation.

Investigation into alleged collusion between the Russian government and the White House also matters. It has become an albatross around the necks of the Administration and Congress, and the way this issue plays out over the next weeks and months will determine the political clout that the president will have in his dealings with Congress. The more clout he has, the easier it will be to push through his legislative agenda that includes a substantial increase in defense funding.

Of course, all of this is speculation. Congress could find a way to get its work done and pass the appropriations and other bills. The Russian albatross could vanish. Agreements around funding could emerge and help prevent the kinds of cuts that we are anticipating. But if the past is prologue, Congress will not be able to do its job and will only pass an appropriations bill in the form of a continuing resolution or omnibus appropriations bill at the very last minute, without significant input from the public, the minority party, or public interest groups like NARC.

By Neil E. Bomberg, NARC senior policy advisor

Next week:  What can we expect in the president’s “skinny” budget and what does that mean for programs important to regional councils?