The Federal Budget and Appropriations Process: in Limbo

It’s stuck because neither the House nor Senate has passed a budget plan that outlines spending for fiscal year (FY) 2018.

Why is it stuck?

Because the majorities in both chambers cannot agree on how much to spend on defense and non-defense programs. Moderate Republicans are concerned that a budget plan similar to the ones proposed by the president or the House speaker would make it very difficult for the House or Senate to maintain spending at current levels, let alone increase spending where consensus to increase spending existed. Conservative Republicans are pushing hard to substantially reduce spending for non-defense discretionary programs and substantially increase spending for defense discretionary programs, and want to break down the current spending caps that ensure that whatever gains or losses in spending occur are equally shared by defense and non-defense programs.

What does this mean?

It means that as we get closer to the September 30th deadline for passing a FY 2018 appropriations bills, the likelihood that Congress will yet again have to rely on a continuing resolution or omnibus appropriations bill to fund the federal government increases substantially. It also means that the chances of a government shutdown will increase.

Why is this happening?

This is happening because the Senate’s failure to pass legislation to repeal and replace the Affordable Care Act (ACA) has upended the carefully planned schedule that the Senate Majority Leader Mitch McConnell (R-KY) developed for passage of a broad range of bills, including a federal debt ceiling increase, tax reform, appropriations, and several reauthorization bills.

According to Bloomberg Government, Senator McConnell was hoping to bring up a measure to raise the federal debt limit, and push through a U.S. Department of Defense bill with large spending increases for the Pentagon in July. At the same time, McConnell was also hoping to use the work period to ensure the timely renewal of many expiring federal programs. Until the Senate adopts a budget resolution; however, it will not be able to move forward with tax reform legislation that relies on reconciliation. Under reconciliation the majority needs just 51 votes, rather than the usual 60 votes, to pass legislation. If the Senate cannot pass either health care or tax reform legislation sometime in July or early September (remember they are out for a break in August), the likelihood of passing any tax or health care legislation this calendar year will further diminish, and the series of major legislative promises made by the president will go unfulfilled.

So where do we go from here?

It is very hard to know. Certainly, Senator McConnell is a master of legislative rules and procedures, and if anyone can move things through the Senate it is he.  But the limited amount of time before the end of the fiscal year does not bode well for Republicans.

Senator John Cornyn (R-TX) acknowledged these difficulties when he told reporters that “it doesn’t get any better, it doesn’t get any easier. We’ve got other things we need to do, like the defense authorization bill. We need to get ready to pass another budget so we can get reconciliation instructions for tax reform.”

The next several months should prove interesting. Depending on how this all turns out, the losers and winners will be neither Republicans nor Democrats, not even Independents. It will be the American people. We will just have to stay tuned and hope that someone, somehow will develop a strategy for moving legislation forward.

Where Do Job Programs Stand in the Face of Potential Labor Department Cuts?

On Tuesday, June 27, 2017, the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education (Labor/H) held a hearing at which the current Labor secretary, R. Alexander Acosta, testified on the president’s budget and other matters.

While the conversation often strayed in various directions, including worker safety, foreign workers, public safety, and worker layoffs, it ultimately returned to jobs, and the clear belief by most members of the subcommittee that putting Americans to work requires a robust and effective workforce development system. For members of the subcommittee it did not matter whether these unemployed or underemployed workers were coal miners from West Virginia, young black men from Chicago, or workers who lost their jobs because of outsourcing. Ultimately, the conversation always came back to the need for and the importance of jobs, job training and job placement programs.

Chairman Roy Blunt (R-MO) opened the hearing by bemoaning the fact that the administration was proposing to cut the Labor Department’s budget by $2.3 billion or 20 percent. He added that while he supports efforts to reduce federal expenditures overall, he wondered aloud whether these Labor Department cuts make sense. If adopted the president’s budget would cut 40 percent of the Labor Department’s workforce development budget. In turn, that would mean that 40 percent of state funding for job training and placement services would vanish, and place individuals and their families at risk for unemployment and a significant loss of income.

Senator Patty Murray (D-WA), the ranking member, echoed Chairman Blunt’s concerns, but added this criticism (and I paraphrase):

The president’s budget request is deeply harmful. It will make it extremely difficult to continue to connect workers to jobs – which is, of course, the central mission of the Department of Labor. Our ability to keep good jobs in America will only be realized by tapping into the full potential of our workers. This budget disregards the bipartisan Workforce Innovation and Opportunity Act, which Republicans and Democrats worked on to ensure an effective federal, state, and local job training system. In fact, nine million of the 20 million who are served by this program will be denied training and connections to the workplace. We need robust investments that help workers and state and local officials grow our economy and get to work, and not the deep cuts proposed by the administration.

Secretary Acosta did not shy away from the debate. In the face of significant criticism from senators on both sides of the aisle, Acosta made clear that the president’s vision for America is “good and safe jobs for all Americans.” He noted that while unemployment is very low – about 4.3 percent – some six million jobs remain unfilled. He went on to say that we have to train Americans to fill those jobs if we are to remain a strong and vibrant nation, and often the best way to train people for these jobs is through apprenticeship programs.

“The answer, according to the president,” Acosta said, “is to expand apprenticeships. High quality apprenticeships ensure that workers have the appropriate skills and ensure that they can earn a decent income.” He pointed out that post apprenticeship starting salaries can top $60,000. “That’s more than the average starting salary for a college graduate,” he added.

When queried about the cuts to existing programs, Acosta said there are many programs – some that are duplicative, and some that have not proven their value – that need to be eliminated, consolidated, or changed. “The department is using rigorous standards to determine what works and what does not, and those standards will form the basis for our judgments about which programs should continue and which should not, which should be funded and which should not.”

Despite the back and forth, an interesting admission emerged at the end from the secretary. Acosta said that the president’s budget is only a starting point, and that the administration and he are looking forward to working with Congress to hammer out an appropriate budget for the Labor Department. Where that will lead remains to be seen.