It may be a quiet Congressional recess in most places around the nation’s capital, but work continues in some circles on the fiscal 2020 appropriations process, focusing on three areas: drafting an initial stopgap continuing resolution, making most of the hard choices on the Senate appropriations bills, and giving initial thought to how to downsize some of the House appropriations bills.

Continuing resolution. Fiscal year 2019 ends at midnight on September 30, but since that day falls on the Monday of Rosh Hashanah in 2019 (meaning Congress won’t be in session and voting that Monday), then from Congress’s point of view, the deadline for putting some kind of stopgap appropriations legislation for FY 2020 in place is the close of business on Friday, September 27. Members of Congress won’t be coming back to D.C. from vacation recess until late on Monday, September 9. While a few big decisions about what will and won’t be included in the inevitable stopgap continuing resolution (CR) will have to be made by Congressional leaders that week, the smaller decisions, and the drafting and framing work, will have to be done by Appropriations Committee staff during the recess.

Even a “clean” CR (one that is supposed to be devoid of any changes in policy or funding levels) always has to have a few “anomalies” to reflect facts on the ground that may have changed since the last appropriations law, where a program requires more money than the prior year, early on, just to maintain the same level of service as the prior year. And other extensions and expiring provisions often are rolled into a CR so Congress only has to pass one big bill in the days leading up to September 30.

The White House Office of Management and Budget takes the lead in this regard every August and sends to the appropriators a list of requested “anomalies” that the Administration feels should be included in the CR. For example, here is the FY 2016 OMB list, here is the FY 2017 OMB list (which included an Amtrak proviso), and this article discussed the requested FY18 anomalies. Not all of the requested anomalies pass muster with the House Appropriations Committee staff (the House staff does most of the work preparing the initial CR), and sometimes the appropriators add their own.

One unrelated “must pass by September 30” item likely to ride on the CR if it doesn’t get passed on its own is an extension of federal flood insurance programs (scheduled to expire on September 30).

Transportation advocates want two specific provisos to be included in a continuing resolution:

• Canceling the July 2020 highway rescission. The bipartisan budget deal negotiated last month would have been a good place to repeal section 1438 of the FAST Act, which will rescind $7.569 billion in highway formula contract authority on July 1, 2020. But that did not happen, and now state DOTs and the highway construction alliance are even more desperate to find a legislative vehicle to repeal the rescission. A must-pass bill like the CR is a likely candidate, but canceling a $7.6 billion spending cut that is currently scheduled by law is the same thing as increasing spending by $7.6 billion (from a budget scorekeeping point of view). There would be Budget Act and other points of order against including the rescission cancelation in the CR, but the real problem is that the appropriators have been reluctant to get involved – it’s not a problem they created, and fixing it would add $7.6 billion to their budget totals (at least in the short term), not the budget totals of the transportation policy committees, who did create the problem.
• Suspending the Rostenkowski Test. The Mass Transit Account of the Highway Trust Fund failed its statutory solvency test earlier this year (named after former Ways and Means chairman Dan Rostenkowski (D-IL) who authored the provision creating the Account). The Treasury Department predicted that the FY 2020 mass transit contract authority apportionments would cause total unfunded contract authority (new apportionments and old unexpended apportionments, minus cash balances in the Account) to hit $27 billion, which would be $1.2 billion more than the $26 billion the Transit Account is expected to receive in tax receipts over the four year FY 2020-2023 period. As detailed here, this will cause FY 2020 transit apportionments to be automatically cut by about 12 percent. The House Appropriations Committee has already taken care of this in the FY 2020 Transportation-HUD bill (see sec. 164(1) of Division D of H.R. 3o55 as passed by the House), but the regular appropriations bill may not be enacted into law for quite some time. Apportionments are supposed to be made on October 1 (which would make inclusion in a CR mandatory), but the appropriations process has broken down so much that apportionments now don’t go out until four or five months into the fiscal year. Nevertheless, given how unpredictable the full-year process has become, if you’re going to suspend the Rostenkowski Test, sooner is better than later.

Senate bill drafting. All year, Senate Appropriations Committee chairman Richard Shelby (R-AL) has held back from letting his subcommittees draft their FY 2020 bills, waiting for an agreement with President Trump and House Democrats on the overall spending totals. Now that the agreement has been reached, and signed into law on August 2, Shelby has reportedly given his subcommittee chairman their tentative spending totals for the 12 general appropriations bills (called the “302(b) allocations” for the section of the Budget Act that requires them). As a result, the Senate subcommittee staffs now get to spend much of the recess making the hard decisions on which programs to favor (and which to freeze or possibly cut) with the money, in anticipation of a number of bill markups starting when the Senate returns the week after Labor Day.

The budget caps under the new deal are $44 billion higher than the FY 2019 caps, and allow $19.5 billion in increases in the defense category and $24.5 billion in increases in the non-defense category.

However, those increases are never distributed evenly, and if Shelby did indeed set aside $5 billion of the non-defense increase for border enforcement, as has been rumored, then that would leave less left over for the other non-defense bills.

House bill downsizing. While Shelby made his panel wait to write their bills, his house counterpart, Nita Lowey (D-NY) had her committee draft bills to optimistic spending totals that assumed budget caps that were $7 billion higher than the caps that wound up being enacted into law last month. So her staff now has to start thinking about where to cut their bills for the inevitable reconciliation with the Senate which now has to conform to the new spending caps. And since Lowey’s plan assumed a different defense/non-defense split than wound up being enacted into law, her bills will actually get a defense increase and have to eat a collective $11.5 billion non-defense cut.

However, two House bills stand out for downsizing because their spending totals now exceed those under the plan originally set by Lowey. In the original House plan, a one-time exemption from the budget caps for the 2020 Census would have been created, at $7.5 billion, so that money in the House bill was not counted towards the spending caps. The final budget deal did create a one-time Census exemption, but it’s only $2.5 billion, not $5.0 billion, so the Commerce-Justice-Science bill (which includes the Census funding) is now $5 billion above its own budget ceiling. And during the full Appropriations Committee markup of the draft Homeland Security bill, Rep. David Price (D-NC) offered an amendment to prevent the Trump Administration from implementing a number of new or proposed policies for dealing with aliens and migrants. The amendment passed, but after it passed, the Congressional Budget Office determined that some of the new policies would save federal taxpayers some money, so canceling those new policies via legislation would be the same thing as passing new legislation with $3.1 billion in new spending. So the Homeland Security appropriations bill is now $3.1 billion over the funding total originally given it by Lowey. Those two bills will likely be the initial focus for downsizing to meet the new spending caps.