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On Tuesday January 5, 2016 the House is scheduled to reconvene and on January 11 the Senate is also scheduled to come into session beginning the 2nd Session of the 114 Congress.  On January 12 President Obama will deliver his last State of the Union address followed by the release of the FY 2017 Budget on February 1. Key Congressional offices including the House and Senate Budget and Appropriations Committees will receive advance budget material and briefings on Friday January 29. Prior to the State of the Union the Administration, if the past is prologue, will begin to leak selected portions of the FY 2017 Budget to highlight their priorities. Republican leadership will announce the Administrations’ FY 2017 Budget “dead on arrival” perhaps even before it is officially presented. The Budget Committees will start their overview hearings of the FY 2017 Budget early in February; the 12 appropriations subcommittees will also begin their hearings in February and will target mark ups of the individual bills to start in May.  Thus begins the Budget and Appropriations process for FY 2017.


The first major Budget legislation will be on the House floor during the week of January 4 when the House is expected to pass the 2016 Reconciliation bill (Restoring Americans’ Healthcare Freedom Reconciliation Act of 2015, HR 3762) , business left over from last year. The Senate passed this bill on December 3rd by a nearly perfect party line vote of 52-47. The most politically visible part of the legislation is that it bans funds for Planned Parenthood and the Affordable Care Act. The reconciliation process was created by the Budget Act of 1974 as an end of year budget tool to reduce budget totals to help reduce the deficit.  As reconciliation was considered to be an important budget enforcement mechanism it was given by law and Senate rules an expedited process and cannot be filibustered and only needs 51votes to pass the Senate.   The relative ease of passing reconciliation bills has made them magnets for difficult to pass legislation, resulting in this year’s inclusion of funding bans on Planned Parenthood and the Affordable Care Act.  In the last 5 years the House has passed 58 bills to eliminate or significantly modify the Affordable Care Act. This is the first such effort that will actually go to the White House. The President has announced that he will veto the bill. 

Also included in the Reconciliation bill are net deficit reductions of approximately $1 billion as reported by 3 specific committees of jurisdiction in the House and 2 committees of jurisdiction in the Senate. 


The Bipartisan Budget Act of 2016 paved the way for the FY 2017 Appropriations process by establishing the discretionary spending ceiling for FY 2017 at $1.45 trillion, an increase of $30 billion over FY 2016 appropriation totals. This legislation also eliminated the FY 2016 and FY 2017 sequestration cuts and lifted the debt ceiling until 2017 or until after the upcoming Presidential elections.  With these normally contentious issues settled, House and Senate leaders have been optimistic about a return to regular order that would result in debating and passing each of the 12 appropriations bills separately and hopefully before September 30, the end of the fiscal year.  Last year the Senate Democrats led by Senator Reid refused to let any appropriations bills be considered by the full Senate until it was agreed that FY 2016 increases would be shared equally by defense and non-defense programs. Republican leaders agreed to this request very late in the process and consequently, while both the House and Senate Appropriations committees reported all 12 bills and the House actually passed 6 bills, all the bills eventually needed to be consolidated into a $1.15 trillion omnibus bill. For FY 2017 efforts will be made to consider and pass the bills separately (or by regular order) and both House and Senate leaders of both parties have pledged support for the regular order process. This is likely to proceed well unless “poison pill” riders on social and policy issues start to be included making the bills unacceptable to the Democrats.

The FY 2016 Omnibus was passed in the House on December 12 by a vote of 316 to 113; it passed the Senate on the same date by a vote of 65-33.   As with any compromise bill both parties claimed “victory”.  This is true for the Republicans also even though all the environmental, health, abortion and social policy riders sought by the Republicans were dropped in order to secure the Democratic votes needed in the House to pass the bill.  Speaker Ryan was able to get 150 Republicans (up from 79 on the last major budget bill) to vote for the bill and was generally given a pass by his House colleagues for doing the best that was possible. Nevertheless, Speaker Ryan has been sharply criticized by much of the conservative media for “folding” and the impact of this “noise” on the willingness of Republican conservatives to support the compromises needed to maintain regular order remains to be seen.

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