Many Paths Possible for Post-Election Appropriations

​Congress returns for a post-election session on November 13, just one week after Election Day. The lame-duck session’s to-do list includes finishing FY 2019 appropriations. For federal agencies that receive funding in seven of the 12 annual appropriations bills, operations are currently funded by a stop-gap continuing resolution (CR) until December 7th. The CR provides funding for those agencies at FY 2018 levels.
 
Five FY 2019 appropriations bills have been enacted thus far:

• Defense
• Energy and Water Development
• Labor-HHS-Education
• Legislative Branch
• Military Construction and Veterans Affairs

 
The seven outstanding FY 2019 bills are:

• Agriculture and Rural Development
• Commerce, Justice, and Science
• Financial Services and General Government
• Homeland Security
• Interior and Environment
• State, Foreign Operations
• Transportation and Housing and Urban Development

 
A conference committee met in September to work on a package that combined four of the seven bills: Agriculture, Financial Services, Interior, and Transportation/HUD. The conference committee made significant progress toward completing this package during August and September, but it was delayed mainly due to legislative riders and other contentious provisions in two of the bills – Financial Services and Interior.
 
By the end of September, as House members left Washington for the mid-term campaign, it appeared that one of two main roadblocks to completion of the four-bill package was a provision in the Financial Services bill that set aside $585 million for a “Fund for America’s Kids and Grandkids.” This Fund, championed by House Chairman Financial Services Chairman Tom Graves (R-GA), would prevent the money from being spent until the Federal Government reached a zero budget deficit or a surplus. Democrats cried foul over the provision, saying that it was a gimmick to reduce spending in the bill below the subcommittee’s budget allocation, thereby cutting nondefense spending below the level agreed to in the Bipartisan Budget Act of 2018. Neither side budged from their positions on this issue.
 
The other roadblock came from House Leadership. Leadership prioritized the completion of another appropriations measure, a two-bill package that included the Defense and Labor-HHS-Education bills, as well as the CR. This measure was on a parallel track with the four-bill package (the conference committees for both held their official public meetings on the same day), but Leadership wanted to ensure that nothing stood in the way of completing the Defense, Labor-HHS-Education, CR package and avoiding a government shutdown. Completion of the four-bill package the same week as the other package became too heavy a lift, especially when President Trump was going back and forth on the whether to veto appropriations bills over his border wall funding request.
 
What will happen next with the seven remaining appropriations bills? Much will depend on the election results and the interest of House and Senate members in proceeding with the bills when they return for the lame-duck session on November 13.
 
The four-bill package has the clearest path to the finish line, although it is not guaranteed. Most of the negotiations have already been completed, and the House and Senate Appropriations Committees very much want to finish the work on this package. If negotiations stall on, for example, the “Fund for America’s Kids and Grandkids” provision in Financial Services, a decision could be made to pull that bill out of the package and proceed with the other three bills. Agriculture and Transportation/HUD are essentially complete, and my sense is that Interior is not far behind.
 
On the other hand, it is quite possible that Leadership will decide to further delay action on appropriations, including the four-bill package, until the border wall fight plays out.
 
The three remaining bills – Commerce-Justice-Science, Homeland Security, and State-Foreign Operations – have a more difficult path to completion. The Homeland Security bill funds the President’s border wall and other immigration enforcement activities. Commerce-Justice-Science could get caught up in debate over the DOJ Special Counsel investigation, as well as immigration issues. State-Foreign Operations includes several contentious issues such as funding restrictions on international family planning programs and funding that could get caught up in the immigration battle. If President Trump follows through on recent statements relating to cutting off foreign aid to El Salvador, Honduras, and Guatemala, that debate will play out on the State-Foreign Operations bill.
 
These three bills have a good chance of being placed in a CR extension that goes into early 2019. There is also a chance that one or more of the bills will be placed in a full-year CR, which would provide level funding through next September 30. CRs that extend funding through the end of the fiscal year are more likely if control over one or both houses of Congress flips due to the mid-term election, as shown by two recent examples.
 
Following the 2010 mid-term election, Republicans won control of the House while Democrats maintained narrow control of the Senate.  The lame-duck Congress passed a CR through March 4, 2011, giving responsibility to the 112th Congress to make final decisions on FY 2011 funding. The 112th Congress ultimately decided to fund 11 of the 12 annual appropriations bills under a full-year CR (a regular annual Defense bill was passed at the same time as the CR).
 
When the House and Senate flipped to Democratic control following the 2006 election, the Republican-controlled, lame-duck 109th Congress kicked final decisions over to the 110th Congress with a CR to mid-February 2007. The Democratic-controlled new Congress passed a full-year CR covering nine of the eleven appropriations bills. Two regular bills – Defense and Homeland Security – had been enacted by the previous Congress (there were only 11 regular appropriations bills in the 109th Congress; the 110th Congress reorganized the Appropriations Committees, resulting in the current 12-bill grouping).
 
Clearly, the path for FY 2019 appropriations will depend on next month’s election results and how Members of Congress react to the results. If Republicans keep both the House and Senate, there is a good chance that most remaining appropriations bills will move by the end of December. The Homeland Security bill, which will be subject to a contentious border wall debate, may not be one of those bills. Under most scenarios, Republicans would need some Democratic support in the Senate to pass border wall funding, and that support is questionable at best. Republicans may choose to include Homeland Security in a CR rather than pass a bill without the President’s wall funding request.
 
If Republicans lose the House, which appears likely based on current polling, lame-duck Republican members may not have the appetite to attempt completion of any appropriations bills. Or, they could move a three-bill or four-bill minibus since negotiations on that package are nearly complete. Regardless of which path they intend to choose, House Republicans will focus first on passing border wall money, and that battle may deplete enthusiasm to get anything else done during the lame-duck session.
 
Another factor influencing appropriations decisions will be the House Leadership elections taking place soon after the House returns. If Democrats perform more poorly than expected in the elections, Democratic leaders such as Nancy Pelosi (D-CA) and Steny Hoyer (D-MD) may see more vigorous challenges to their positions. On the Republican side, there will be new leadership regardless of the election results since Speaker Paul Ryan (R-WI) retires at the end of the current Congress. Majority Leader Kevin McCarthy (R-CA) is positioned to take Ryan’s place, but he is watching his right flank for conservative challenges. McCarthy is taking center stage on the push for wall funding to shore up conservative support. The strategy for completing appropriations bills will likely be caught up in Leadership election politics.
 
Yet another wildcard is President Trump. He will push hard for border wall funding and will be unlikely to throw his support behind completing other unfinished appropriations until that fight is over – and is decided in his favor. If Republicans suffer significant election losses, he may become even more dug in on his positions relating to the wall and other contentious provisions in appropriations bills.
 
Finally, there’s a possibility that we won’t know which party controls Congress until well after Election Day. If the margin of control in the House or the Senate is close, and several seats are subject to recounts or run-off elections, the lame-duck Congress may put appropriations decisions in a holding pattern until the results become clear. Under this scenario, the odds of all remaining bills being included in a lengthy CR extension increase.
 
The bottom line is that there are many forks in the road to completing FY 2019 appropriations bills. The final path will (hopefully) become clearer after the November 6 election.