Fiscal Year 2017 Appropriations
Congress adjourned September 28 following approval of a continuing resolution (CR) that will fund the federal government until December 9. The House and Senate are both scheduled to return on November 14 following the elections for the “lame duck” session likely to last until mid-December.
The CR easily cleared both chambers with strong bipartisan votes (72 to 26 in the Senate, 342 to 85 in the House) and was signed into law by the President on September 29. Agreement on the final package came after several days of tense negotiations amidst the looming threat of a government shutdown with the end of the FY ’16 fiscal year on September 30. However, the CR was ultimately cleared after Congressional leadership reached an agreement to include an authorization (although not a provision of actual monies) of emergency funding in a separate water resources bill (outlined below), a sticking point among many Democrats in both chambers.
The CR will fund the federal government at FY 2016 funding levels, albeit with an across-the-board reduction of 0.496% in order to comply with the $1.067 trillion discretionary spending cap. The bill also includes a full FY 2017 Military Construction-VA appropriations bill, which essentially serves as the vehicle for advancing the stopgap spending bill. It also contains $1.1 billion in emergency funding to combat the Zika virus (see below for additional details) and $500 million in targeted flood and disaster relief for several states including Louisiana, Maryland and West Virginia.
When Congress returns in November, it will have roughly four weeks to complete work on the remaining appropriations bills for FY 2017. Both Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI) have indicated that their preferred approach will be to group several funding bills into smaller packages, each commonly referred to as a “Minibus,” instead of a much larger catch-all Omnibus spending bill.
Zika Virus Control and Prevention
As referenced above, the CR includes $1.1 billion in emergency funding to combat the Zika virus, with approximately $400 million in offsets. Among the domestic funding included in the final package are the following key allocations:
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$394 million for the Centers for Disease Control and Prevention (CDC) for mosquito control and surveillance efforts, including technical assistance for states, and international response activities. Approximately $44 million of this is set-aside to reimburse states for Public Health Emergency Preparedness funding transferred for Zika response activities;
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$397 million for the National Institutes of Health (NIH) and the Biomedical Advanced Research and Development Authority (BARDA) for the development of a Zika vaccine and related diagnostics; and
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$75 million to reimburse health care provided in states and U.S. territories with active Zika transmission for those without private health insurance.
The final Zika package does not include language that would have provided a 180-day waiver from certain permitting requirements for using federally-approved pesticides, and largely avoids issues related to Zika funding used by Planned Parenthood by simply not naming the organization as a recipient (although allowing its subsidiary to receive reimbursements for related efforts in Puerto Rico).
The Congressional Budget Office anticipates that the bulk of Zika funding will be spent during the first two fiscal years, when the NIH will be working on a vaccine trial and when the CDC will be researching the long-term health impacts of microcephaly. However, the funds appropriated will be spent into 2021 as research into the virus continues and the vaccine moves through a multi-phase trial.
Water Resources Development Act (WRDA) Reauthorization
The House last week approved the Water Resources Development Act (WRDA) of 2016 (H.R. 5303) by a vote of 399-25, after the Senate had approved similar legislation (S. 2848) by a vote of 95-3 in mid-September. Through authorizing programs and projects of the Army Corps of Engineers, WRDA addresses the needs of America’s ecosystems, harbors, locks, dams, flood protection, and other water resources infrastructure.
The legislation authorizes 31 Army Corps of Engineers Chief’s Reports and 29 feasibility studies, and increases the flexibility and removes barriers for state, local, and non-federal interests to invest in infrastructure. Included in this funding is an authorization of $170 million for infrastructure improvements for communities such as Flint, Michigan with public health emergencies due to contaminated drinking water. While the flood and disaster relief provisions contained hard money, as generally wanted by Republicans, the Republican Leadership only committed to provide such funding for Flint and other communities as part of the year-long, appropriations package that will be coming during the lame-duck session. This commitment, and not the provision of actual funds as advocated by Democrats, was sufficient to cut the deal and draw wide-spread support for the bill.
The House and Senate WRDAs will now be conferenced, and we expect a final WRDA to be approved before the end of the year.
Legislation to Delay Administration’s Overtime Rule
Before adjournment, the House approved the “Regulatory Relief for Small Businesses, Schools, and Nonprofits Act” (H.R. 6094), by a vote of 246-177, to delay implementation of the Department of Labor’s overtime rule from December 2016 to June 2017. The rule will double (to $47,476) the salary threshold under which virtually all workers are guaranteed time-and-a-half pay whenever they work more than 40 hours in a given week.
Representative Tim Walberg (R-MI), the bill’s sponsor, argued that the overtime rule “burdens hard-working small business owners,” while Representative Bobby Scott (D-VA) said the bill “would take $600 million out of the pockets of the more than 4 million people who would have gained overtime protections on December 1st.”
It is unlikely that the bill will be enacted into law since it has not passed the Senate and the President has issued a veto threat.
Clean Water Rule
In a blow to states challenging the Waters of the U.S. Rule, the three-judge panel from the 6th Circuit Court of Appeals ruled it will not consider several Army Corps of Engineers memos that raised concerns about the Environmental Protection Agency’s rule and rulemaking process. States had hoped to use the Army Corps of Engineers’ memos to discredit EPA’s rulemaking as politically motivated rather than based on science.
Congressional Republicans, who have been critical of the rule, released the memos to the public last year. But the court concluded that most of the memos "contain predominantly deliberative materials and were properly omitted from the record" and that the challengers failed to provide "clear evidence" that the memos were wrongly excluded from the administrative record in the case.
On Capitol Hill, Senate Environment and Public Works Committee Chairman Jim Inhofe (R-OK) released a committee report that he asserts shows how the Army Corps of Engineers regulation of wetlands and streams would be made worse under the Waters of the U.S. rule. Chairman Inhofe sent the report to ten Senate Democrats and Maine Independent Senator Angus King who voted down an effort to scrap the rule last November but warned EPA and the Corps that if they did not provide additional clarity or eroded exemptions for farmers, they "reserve[d] the right to support efforts in the future to revise the rule." Chairman Inhofe argued to those senators that the new report shows their test has not been met, and said, "This report should be evidence enough that it's time for Democrats and Republicans to work together to rein in EPA and the Corps.”
We will continue to monitor implementation of the rule and congressional efforts to stop it.
Please contact us with any questions.
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