Crystal Balling the Fiscal Year 2018 Omnibus for Authorizations

A Trend in Spending Bills Being Used for Policymaking

Congress is staring down a March 23 deadline to pass legislation to fund the government once the current continuing resolution (CR), the fifth for fiscal year (FY) 2018, expires. While it is always difficult to predict exactly what will happen on a must-pass funding bill, there is always the possibility the measure becomes a vehicle for a myriad of authorizations.

For example, in the weeks leading up to passage of the most recent CR, the Bipartisan Budget Act of 2018, many suspected the measure could end up being minimal. However, the February 9 CR ultimately became a massive package, notably including:

  • A deal to lift the Budget Control Act (BCA) defense budget cap by $80 billion and the domestic spending cap by $63 billion in FY18 and to increase the defense budget cap by $85 billion and the domestic spending cap by $68 billion in FY19;
  • An extension of the debt limit through 2018;
  • More than $80 billion in disaster relief funding for efforts in response to Hurricanes Harvey, Irma, and Maria, as well as recent California wildfires;
  • A 10-year extension of the Children’s Health Insurance Program (CHIP);
  • A two-year extension of expiring community health centers funding and extension of some Medicare payment policies;
  • Elimination of the Medicare Independent Payment Advisory Board (IPAB);
  • Tax extenders; and
  • A $20 billion, two-year boost for infrastructure spending.

This practice of adding policy or emergency appropriations on to a spending bill is not unique to this CR or even to the 115th Congress. In fact, the past two omnibus appropriations measures for FY16 and FY17 included divisions at the end of each bill to address “other matters,” namely authorizations. Additionally, these bills included some reauthorization measures sprinkled throughout.*

Predictions for the FY18 Omnibus

Because 2018 is an election year, the FY18 omnibus is increasingly being viewed as the last train guaranteed to leave the station before November. That being said, the forthcoming appropriations legislation could be even more likely to serve as vehicle to extend, authorize, or reauthorize federal government programs. Included below is a list of issues that could be addressed on the FY18 spending bill.

Likely Short-Term Extensions

Federal Aviation Administration

On September 29, 2017, President Donald Trump signed the Disaster Tax Relief and Airport and Airway Extension Act of 2017 into law. This bill provided a six-month extension of the Federal Aviation Administration (FAA) with the hope that the House and Senate transportations could work through controversial issues related to air traffic control and pilot training in their respective, longer term reauthorization bills. As limited progress has been made, it is likely another extension will be needed by March 31. Senate Commerce Committee Chairman John Thune (R-SD) has recently suggested the current FAA authorization could be extended into the summer.

Flood Insurance

Although the authorization for the National Flood Insurance Program (NFIP) lapsed briefly during the two, brief government shutdowns this year, the February 9 CR included the sixth short-term extension for the program in the past five months. Like the CR, the current NFIP authorization will expire on March 23. The House has passed the 21st Century Flood Reform Act, which includes a five-year authorization for the NFIP along with other reform measures, but congressional Democrats are generally not supportive, and the Senate has yet to act. In the meantime, Senate Democratic Leader Chuck Schumer (D-NY) has expressed optimism about another extension of the NFIP.

Possible Authorizations/Reauthorizations

Spending Flexibility for the Pentagon

While pleased with the recent agreement to increase defense spending in FY18, defense hawks are now concerned the Pentagon will not be able to reap the full benefits of lifting the budget cap six months into the current fiscal year. For example, certain Department of Defense (DoD) accounts, including those focused on operations and maintenance (O&M), will expire on September 30. Additionally, by law, the Pentagon is not permitted to spend more than 20 percent of its appropriated funding in the last two months of the fiscal year. Acknowledging that operating under CRs has comprised DoD’s ability to plan, House Armed Services Committee Chairman Mac Thornberry (R-TX) has hinted the omnibus could include greater flexibility on FY18 spending, something House Speaker Paul Ryan (R-WI) and House Defense Appropriations Subcommittee Chairman Kay Granger (R-TX) have also signaled they will support.

Federal Communications Commission Reauthorization

Senate Commerce Chairman Thune and House Energy and Commerce Committee Chairman Greg Walden (R-OR) have indicated they are working to finalize a telecommunications package that could potentially be attached to the March 23 omnibus. At the very least, two telecom issues seem ripe for attention. First, support seems to be building for a new repack fund to address an up to $1 billion shortfall in funding to relocate broadcasters following last year’s 600 megahertz (MHz) spectrum auction. Second, Federal Communications Commission (FCC) Chairman Ajit Pai said earlier this week the FCC would like to hold an auction for the 28 GHz spectrum band in November, potentially followed by a second auction of 24 GHz spectrum, to ensure the U.S. maintains 5G leadership. However, Chairman Pai also argued a legislative fix to allow the FCC to deposit upfront auction payments in the U.S. Treasury will be needed by May 13 to proceed. Such a provision is included in Chairman Thune’s Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless (MOBILE NOW) Act. While the bipartisan FCC Reauthorization Act of 2018 recently reported by the House Energy and Commerce Committee did not include MOBILE NOW, there’s speculation it could be added to the reauthorization bill when it comes to the House floor, perhaps as soon as next week. The House FCC reauthorization bill also includes additional repack funding. This could make the FCC reauthorization bill, the first in over 25 years, a candidate for inclusion on the omnibus.

Department of Homeland Security Reauthorization

Earlier this week, the Senate Homeland Security and Governmental Affairs Committee approved the Department of Homeland Security (DHS) Authorization Act, which passed the full House in July. During the markup, Chairman Ron Johnson (R-WI) indicated committee leadership and staff will be working through more than 50 proposed amendments this weekend to develop a substitute package. The weekend work schedule, as well as Chairman Johnson and Ranking Member Claire McCaskill’s (D-MO) emphasis on keeping the bill bipartisan and non-controversial, could indicate committee leadership is aiming to attach the final DHS reauthorization to the omnibus bill. It remains to be seen, however, whether or not jurisdictional issues, for example the fact that the Senate Commerce Committee has jurisdiction over some DHS programs, may cause delays.

Obamacare Stabilization

Senate Health, Education, Labor, and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) have recently restarted their efforts from last year to stabilize ACA programs with a new focus on winning support from House Republicans to attach their legislation to the FY18 spending bill. Last year, Senators Alexander and Murray introduced the Bipartisan Health Care Stabilization Act of 2017 to help stabilize individual market premiums and provide states greater flexibility. Separately, Senators Susan Collins (R-ME) and Bill Nelson (D-FL) advocated for their Lower Premiums Through Reinsurance Act of 2017, which would provide $4.5 billion over two years for federal reinsurance to help insurers recoup losses for insuring the sickest individuals. While Senator Alexander claims a new framework is emerging, it’s unclear if outstanding issues related to anti-abortion language and offsets for the repeal of the individual mandate, can be addressed by March 23. Another factor at play may be how much Senate Majority Leader Mitch McConnell (R-KY) feels committed to making good on his promise to bring Senator Collins’ legislation to the floor in exchange for her vote on tax reform.

Opioids

Well aware of the March 23 deadline, on February 27, a bipartisan group comprised of Senators Rob Portman (R-OH), Sheldon Whitehouse (D-RI), Amy Klobuchar (D-MN), Dan Sullivan (R-AK), Maggie Hassan (D-NH), Bill Cassidy (R-LA), Shelley Moore Capito (R-WV), and Maria Cantwell (D-WA) introduced legislation to build on the 2016 Comprehensive Addiction and Recovery Act (CARA). Known as the CARA 2.0 Act of 2018, this new bill outlines a number of policy reforms for prescribing opioids, including by instituting a three-day prescription limit. Because the legislation is also intended to direct some of the $6 billion in agreed upon spending for the opioid crisis reached under the February budget deal, speculation is high that CARA 2.0 could be a contender to ride on the FY18 omnibus.

Autonomous Vehicles

Because the spending bill has come to be viewed as a last call for authorizations, there have been rumors this could expedite work on autonomous vehicles (AV) legislation. By way of background, the House passed its Safely Ensuring Lives Future Deployment and Research in Vehicle Evolution (SELF DRIVE) Act by a bipartisan voice vote in September. After being hotlined, a similar Senate bill, the American Vision for Safer Transportation through Advancement of Revolutionary Technologies (AV START) Act seemed to be on an expedited timeline for consideration by the full Senate in December. However, it has since hit several snags, with multiple senators placing holds on the bill. Under the time crunch to March 23, it is possible the Commerce Committee may reinvigorate its work to quickly resolve controversial issues pertaining to safety and automotive defects, consumer privacy, and cybersecurity, as well as the bill’s silence on trucking, so that the bill could be considered for inclusion on the omnibus.

Tax Extenders

Congress made permanent some tax breaks as part of the Tax Cuts and Jobs Act signed into law in December. An additional 36 tax provisions, primarily for renewable energy and individuals, were extended on the February 9 CR, most retroactively for 2017 with a few set to phase out in 2022. The FY18 omnibus could create an opportunity to adopt forward looking provisions for some of the tax breaks that have only been extended retroactively. This will be a priority for retiring Chairman of the Senate Finance Committee Orrin Hatch (R-UT), whose Tax Extenders Act of 2017 envisioned just that. Meanwhile, House Ways and Means Committee Chairman Kevin Brady (R-TX) has questioned the ongoing need for tax extenders in light of the GOP’s tax reform victory. Regardless, the Ways and Means Tax Policy Subcommittee will hold a timely March 14 hearing to scrutinize the need to renew temporary tax provisions in the era of the new tax law. The discussion at this hearing could impact the chances of additional tax extenders going on the March 23 bill.

Outstanding Issues Unlikely to Be Addressed on the Omnibus

Gun Control

Public opinion has toward more robust gun control has become increasingly favorable since the February 14 shooting at the Marjory Stoneman Douglas High School in Parkland, Florida. While action on gun control is possible during this work period, it is unlikely such legislative would be included as part of a large spending bill. In fact, Republicans have traditionally used the annual appropriations bill to reassert support for the Dickey amendment, which stipulates that no federal funds may be used to advocate or promote gun control. The most likely piece of legislation to receive separate consideration is the Fix NICS Act of 2017, which aims to strengthen procedures for reporting criminal records to the National Instant Criminal Background Check System (NICS). This bill has passed the House as an attachment to a conceal-carry reciprocity bill. Although Republican Senate leaders have tried to hotline the Fix NICS Act, Senator Mike Lee (R-UT) has placed a hold on the bill to keep it from moving forward. In the meantime, lawmakers are expected to continue to discuss potential bans on bump stocks and assault weapons.

Immigration

The past few spending bills have been mired with tension between Democrats and Republicans over Democrats desire to legislate ongoing protection for dreamers under the Deferred Action for Childhood Arrivals (DACA) program and Republican demands for a massive increase in border security spending. This time, the Trump Administration’s March 5 deadline for winding down DACA is moot following two district court decisions allowing DACA renewals to resume and the Supreme Court’s decision not to intervene. While Democrats are likely to continue to push for a legislative solution, recent legal developments have essentially eliminated the urgency for Congress to act, potentially shelving the congressional debate on DACA for months. In the meantime, it remains to be seen what funding President Trump may receive for his proposed border wall as part of the FY18 appropriations bill. As one senior appropriator put it, there is a reason the president has announced he will travel to California to view wall prototypes in the midst of omnibus negotiations.

Tax Reform Technical Corrections

Both Republicans and Democrats acknowledge a need for technical corrections to the Tax Cuts and Jobs Act. However, similar to Republicans’ hesitation to work with Democrats on fixes to the ACA, Democrats are currently showing no political appetite to be helpful on any near-term technical corrections. Regardless, Treasury Secretary Steven Mnuchin and House Ways and Means Committee Chairman Brady are pushing for addressing what they view as drafting errors on the FY18 omnibus bill. Notably, they have pointed to the need to deal with a provision that gives agricultural growers a bigger deduction for selling to cooperatives rather than corporations. Another is a provision that could require restaurant operators and retailers to depreciate property over 39 years instead of 15. Democratic cooperation will be key to achieving any of the desired changes to the tax reform bill. In light of this, Ways and Means Committee Ranking Member Richard Neal (D-MA) has already said he will demand hearings on each proposed correction before offering his support for any changes.

*History of Authorizations in the FY16 and FY17 Omnibus Bills

The Consolidated Appropriations Act, 2017, signed into law on May 5, 2017, included a number of policy provisions, such as:

  • The Intelligence Authorization Act for FY17, which reauthorized and reformed U.S. intelligence programs;
  • The Health Benefits for Miners Act of 2017, which permanently extended health care benefits for certain retired coal miners and their families;
  • An increase in the ceiling for federal Medicaid spending for Puerto Rico;
  • Reauthorization of the District of Columbia’s (DC) school voucher program and other educational spending for DC;
  • An extension of the Temporary Assistance for Needy Families (TANF) program through the end of FY18;
  • The Honoring Investments in Recruiting and Employing American Military Veterans Act of 2017, which established a program to recognize efforts by employers to hire veterans and provide services for the veteran community; and
  • An increase in the caps on H-2B nonimmigrant visas and Afghan Special Immigrant Visas (SIVs).

The Consolidated Appropriations Act, 2016, which was signed into law on December 18, 2015, also served as the vehicle for a number of authorizations, including:

  • The Intelligence Authorization Act for FY16, which reauthorized and reformed U.S. intelligence programs;
  • Authorization for direct loans to Iraq;
  • The Cybersecurity Act of 2015, which created a voluntary cybersecurity information sharing process and modified federal information security procedures;
  • The James Zadroga 9/11 Health and Compensation Reauthorization Act, which reauthorized health and compensation programs for 9/11 first responders;
  • Suspension of several tax provisions included in the Affordable Care Act (ACA);
  • Reauthorization of the Land and Water Conservation Fund;
  • An end to the ban on U.S. crude oil exports;
  • Authorization of a grant program to fund research on the oceans, coasts, and Great Lakes;
  • Modified procedures for the Visa Waiver Program; and
  • Various Tax Extenders.