September 7, 2017
Each year, Members of Congress head back to their home districts for a month-long legislative break known as “August recess”. With the holiday weekend over and September in full swing, Members are returning to the capital this week with a full schedule of big-ticket items ahead of them – many of which must be completed before the end of the fiscal year on September 30.
Major items on Congress’ to do list include reauthorizing the National Flood Insurance Program, the operations of the Federal Aviation Administration, and the Children’s Health Insurance Program. Additionally, Congress will need to tackle appropriations legislation, the budget, the debt ceiling, and Hurricane Harvey relief in the coming weeks.
In our annual “welcome back” blog post, we outline the most significant food and agriculture-related legislation, budget, and appropriations work on Congress’ agenda for the rest of the year and the potential effects on farmers and food producers nationwide.
In July 2017, the House and Senate Appropriations Committees each passed their respective agriculture funding bills for fiscal year (FY) 2018. The two chambers will now use those two bills to negotiate final funding levels and policy riders. However, those final negotiations will not happen before the October 1 start of the new fiscal year, and hence by September 30 Congress will need to pass a short-term continuing resolution (CR) to extend FY 2017 funding levels until sometime in December, giving appropriators more time to hammer out their differences and finalize legislation.
Despite the absolute certainty of needing a short term CR, this week the full House nonetheless began considering a package of eight appropriations bills for FY 2018. Consideration of the legislation is expected to continue throughout the week as members review and vote on 118 different amendments. Twenty of the 118 amendments refer to the agriculture portion of the package. To see the full list of amendments click here.
It is not yet clear how or when the House will transition from working on the eight-bill package to considering a short-term CR, but that decision could be made as early as next week. The Senate is unlikely to take up any appropriations bills prior to consideration of the short term CR. Thus, the real action on appropriations for FY 2018 will occur after the CR has been secured, leading up to a final bill sometime in December.
Before Congress can pass final appropriations legislation for FY 2018, however, they must decide whether or not to raise overall discretionary spending caps. In 2011, Congress set spending caps for the following ten years. Since then, the House and Senate have on a number of occasions agreed to raise those caps for a particular year or set of years. However, to date, no such deal has yet been reached for FY 2018.
As currently written, the House Appropriations Committee’s spending package (known as the “mini-bus”) would bust the defense spending cap for FY 2018 by more than $72 billion. The spending package would not, however, exceed the non-defense spending cap. The FY 2018 spending allocations set by the Senate Appropriations Committee would exceed both the defense spending cap and the non-defense spending cap by $2 billion and $3.8 billion, respectively.
When caps are exceeded, automatic across-the-board cuts are applied to all non-exempt programs. This process is known as “sequestration.” If final appropriations legislation for FY 2018 exceeds the non-defense discretionary spending cap, sequestration cuts will be applied to discretionary spending for nearly all programs administered by the US Department of Agriculture (USDA).
At this point, it is not at all clear how Congress will resolve the fact that spending legislation in both the House and Senate exceeds current budget caps. In years past, congressional leadership and the White House have struck deals to raise the spending caps. Expectations are high that a similar pact can be reached this year, though it will not come easily in the current political context.
Hurricane Harvey and the Debt Ceiling
As one of its first orders of business upon returning from recess, Congress started rapidly on a disaster aid package in response to Hurricane Harvey. On Wednesday, September 6, the House passed a $7.85 billion aid bill, which it described as a down payment on a much larger package. The legislation now goes to the Senate, which intends to attach a debt ceiling increase, and perhaps the short-term CR, and send the package back to the House. The debt ceiling, which caps the federal government’s borrowing authority, must be raised by early October to ensure that the government does not default on its debts.
The move to combine Hurricane Harvey relief with a short-term CR and short-term debt ceiling increase has gained the support of Democratic congressional leaders as well as the White House, but is nonetheless drawing the ire of the House Freedom Caucus and others who oppose increasing the debt limit without conditions.
In July, the House Budget Committee passed a budget resolution for FY 2018. The primary purpose of the budget resolution in this particular case is to act as a vehicle for future tax cut legislation. However, the House budget resolution also includes a directive (known as “budget reconciliation instructions”) to the House Agriculture Committee to cut $10 billion from farm bill food and agricultural programs. The reconciliation instructions require the Committee to report legislation by October 6 to generate the $10 billion in savings; the savings is to be generated over 10 years. If enacted, the budget resolution could easily derail upcoming farm bill negotiations.
It is important to remember that in order for budget reconciliation instructions to actually become operational, the Senate must also move forward with their own bill. Thus far, the Senate has taken no action on a budget resolution of their own and there appears to be far less appetite in that chamber for reconciliation on mandatory spending. Though it would not become law, if the House budget resolution does pass on the House floor, the House Agriculture Committee will still be required to draft a reconciliation bill by the October 6 deadline and the full House would then proceed to vote on the full package of budget reconciliation cuts, including the farm bill ones. The measure would then die, since Senate leaders have shown no interest in the measure.
Recent reports suggest that House leadership is planning to bring the budget resolution to the House floor as early as next week. Before August recess, there was not enough support among Republican lawmakers to pass the resolution, though it is not clear whether or not that is still the case.
If the current version of the House budget resolution were to pass on the House floor in September, the House Agriculture Committee would be required to report a bill by October 6 that generates $10 billion in savings over 10 years. It is possible that the reporting date would be modified, given that the original deadline was set back in July. Regardless of the deadline, however, the House Agriculture Committee would likely move quickly to write a bill, which could set a dangerous precedent for farm bill spending negotiations.
Leaders of both the House and Senate Agriculture Committees have indicated that they want to move the next farm bill through Committee consideration this year. This is an ambitious goal, but becomes far more likely under a budget reconciliation scenario.
As the budget, appropriations and farm bill processes continue to unfold, stay tuned to the National Sustainable Agriculture Coalition’s blog and social media for ongoing details and analysis.
Categories: Budget and Appropriations, Farm Bill