Hill faces midnight deadline as budget details surface

Source: George Cahlink and Geof Koss, E&E News reporters • Posted: Thursday, February 8, 2018

Congress will race against the clock today to back a massive, bipartisan budget deal ahead of a midnight deadline to keep government funded and agencies open tomorrow.

The agreement, announced by Senate Republican and Democratic leaders yesterday, extends current funding levels through March 23, buying enough time for Congress to write a final, fiscal 2018 omnibus spending package to the new levels.

Senate Majority Leader Mitch McConnell (R-Ky.) moved forward with taking up the measure, including setting a procedural vote later this morning.

The pact couples hundreds of billions of dollars in new spending with tax, fiscal and other policy changes. The accord, as outlined by Senate Republicans, would propose $80 billion in new defense spending for fiscal 2018 and $85 billion in fiscal 2019. Domestic spending would rise $63 billion in fiscal 2018 and $68 billion in fiscal 2019.

As expected, the deal includes a package of tax extenders. The bill would extend and modify the nuclear production tax credit and the 45Q carbon capture and sequestration break.

It would also add a host of “orphaned” renewables sources to the extension and phaseout schedule agreed to in a previous deal. Other tax provisions would:

  • Extend the credit for nonbusiness energy property through the end of 2017.
  • Extend and modify the the credit for residential energy property through 2021.
  • Extend through the end of 2017 the credit for new fuel-cell motor vehicles.
  • Extend through 2017 the alternative fuel vehicle refueling property break.
  • Extend the credit for two-wheeled, plug-in electric vehicles though Jan. 1, 2018.
  • Extend the second generation biofuel producer credit through Jan. 1, 2018.
  • Extend the biodiesel and renewable diesel breaks through the end of 2017.
  • Extend the oil spill liability trust fund financing rate through the end of 2018.

The text includes $90 billion in emergency disaster assistance for Florida, Texas, California, Puerto Rico and the U.S. Virgin Islands that were hard hit last fall by hurricanes and wildfires. That amount is nearly $10 billion more than the House-backed plan.

Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said yesterday she knew little about the infrastructure provisions but predicted there would be intense competition for the dollars.

“We’ve got to elbow our way through the broadband and everybody’s else’s infrastructure,” she said of the broad scope of projects listed.

One of Murkowski’s top concerns, the agreement would allow the sale and use of up to $350 million from the Strategic Petroleum Reserve to help pay for its modernization.

Other provisions in the disaster section include:

  • $17.4 billion for the Army Corps of Engineers, including for flood control and coastal emergencies.
  • $21.7 million for the Department of Energy, including for electric grid assistance.
  • $23.6 billion to the Federal Emergency Management Agency.
  • $515.6 million for the Department of the Interior, $63.2 million for U.S. EPA and $119.7 million for the Forest Service.
  • $400 million for NOAA.

The deal additionally would defuse a potential fight over the debt limit by extending it through March 1, 2019.

It also creates two bipartisan select congressional committees to make recommendations on budget reform and offer a legislative fix for financially ailing union pension programs (see related story).

Conservative gripes

The Senate is expected to act first on the bill by stripping out the text of a House-passed defense spending bill with the text of the far broader budget deal and passing it with bipartisan backing.

It should head to the House by late tomorrow afternoon or evening, where the liberal and far-right wings of both parties have yet to embrace it.

It’s not clear if congressional leaders have a backup plan for keeping the government running if the accord fails or is delayed.

One option could be to move another, short-term spending bill of a few days or a week to allow time to get the larger funding legislation passed without forcing a shutdown.

House Minority Leader Nancy Pelosi (D-Calif.) said she backed the deal’s spending provisions but said she would not support it until she won commitments from GOP leaders to consider a separate immigration policy bill.

She spent an unprecedented eight-plus hours on the floor yesterday making a marathon speech calling for action on immigration.

Pelosi said the House Democratic caucus would be united behind her in opposing the bill. It’s not clear if any Democrats might defect, although 17 House Democrats broke with the party earlier this week to back a Pentagon-only funding plan.

House conservatives, meanwhile, also said they would reject the deal that they say adds far too much money to the federal deficit and reverses years of Republicans holding the line on spending.

“Republicans control government and are going to allow an increase of a trillion dollars, second only in the past decade to the Obama spending stimulus boondoggle? And run a $1 trillion deficit? It makes no sense,” said Rep. Jim Jordan (R-Ohio), a founder of the House Freedom Caucus.

The House Freedom Caucus, made up of 32 of the chamber’s most conservative members, voted yesterday to oppose the deal likely as a block. If they stay united and no Democrats back the deal, they could sink the package in the chamber, where the GOP has a 24-seat majority.

The deal also drew opposition from outside conservative groups, including Americans for Prosperity and Freedom Partners, both part of the billionaire Koch brothers’ political network.

“With this proposal, the Senate has opened the floodgates to massive increases in government spending and corporate welfare for powerful and well-connected special interests,” the groups wrote yesterday to congressional leaders. “Coming on the heels of historic tax reform that offered hope to hardworking Americans, the so-called bipartisan budget agreement is a travesty.”

House Republican leaders, however, were betting they would attract most of the rest of their party who favor more military spending or come from districts hard hit by natural disasters.

They also believe they could pick up a handful of more moderate Democratic voters from swing districts who would not want to vote against Pentagon spending or disaster aid.

GOP leaders sought to paint the budget deal as a way to provide an infusion of funding for the military without having to offer an equal increase for domestic agencies.

“We are breaking Democrats’ Obama-era insistence that funding for our military be tied to increases in non-defense spending. These are enormous strides for our national security,” Speaker Paul Ryan (R-Wis.) said.

Senate Minority Leader Chuck Schumer (D-N.Y.) called the deal a “breakthrough” after months of partisanship. He said Democrats had successfully won increases for both the military and host of programs vital to the middle class.

President Trump also weighed in yesterday, urging Congress to back the funding to show its support for the troops.

Click here for legislative text of the deal.

Click here for a summary.

Click here for a summary of the disaster relief portion.