Guest Post: Federal Update, January 2018 – the Challenge Ahead

Back • January 29, 2018 • Uncategorized

This article is a guest post by Deborah Stein, the Network Director of the Partnership for America's Children. It provides some much-needed context to the challenges Congress faces up until the end of the year, and how they can impact children and families in Connecticut. 

This update sets forth much of what we expect for the year ahead.

Before we get to specifics, I want to note that there is an interesting development in the Senate: a new moderate bipartisan group, the Common Sense Coalition, has emerged that helped negotiate the end to the shutdown and is now tackling immigration legislation. It's growing by the moment, with 39 participants. Whether it will last and how much difference this might make is not at all clear, but it's definitely worth watching.

If you are having trouble imagining how 39 Senators can actually talk together, the answer is, Senator Collins introduced them to her Native American talking stick and it mostly worked, until a Republican got overly excited and "forcefully tossed" it to a Democrat, accidentally chipping Sen. Collin's glass elephant. They are now using a ball.

I've organized this by issue area rather than chronology, which I hope will make it easier to follow.

A quick language note: Federal funding is either mandatory (funding that is both authorized and appropriated in one bill, in which case the appropriations are either permanent, such as Medicaid and foster care, or for multi-year periods such as CHIP, TANF, child nutrition, and some child care funding) or discretionary (appropriated every year, such as Head Start, some child care funding, and WIC). Discretionary means in Congress' discretion–not at the discretion of the President. Almost always when people talk about appropriations they are referring to discretionary funding programs for which appropriations are annual.

Wrapping Up Fiscal 2018

Congress still hasn't passed appropriations bills to fund the government through the end of September 2018 (the 2018 Fiscal Year runs from October 1, 2017, through September 30, 2018). While much of the public attention was over the fight about CHIP and the Dreamers, these were tag-on bills. They were important, of course, but they were not the reason we needed another Continuing Resolution (CR).

The reason we even needed a CR to extend government funding is that Congress hasn't been able to set the top line amounts available to appropriators. Under the Budget Control Act of 2011, defense appropriations and nondefense discretionary appropriations (think of it as domestic appropriations) are each subject to an overall cap. If appropriations spending goes over that cap, automatic sequestration cuts kick in across the board for appropriations and a few mandatory funding programs. Learn more here and here.  If the sequestration caps remain in place there will be significant budget cuts compared to FY2017 for which the caps were raised. Since the caps were created by statute, the only way for Congress to appropriate more funds than the caps allow is to pass a bill raising the caps. That means they need 60 votes in the Senate, and that requires at least 9 Democrats (appropriations are not subject to the fast-track reconciliation process).  There is widespread agreement in Congress that the defense cap needs to be raised. Advocates for human needs programs also believe domestic spending must be increased.  Many Republicans want to raise defense without adjusting the domestic spending cap, or by increasing defense far more than domestic spending. The Democrats are arguing that investments in domestic programs are just as important and any increases must maintain parity.  So far they have refused to raise the defense spending cap unless domestic spending is raised equally.

Until the Republicans and Democrats can agree on overall spending caps for defense and domestic spending, they cannot move ahead on individual appropriations bills or an omnibus bill, and we will have more continuing resolutions and possibly more shutdowns.

This is why for child advocates, the big issue for FY 2018 appropriations is to raise the domestic appropriations caps as much as defense. If the overall cap is raised enough, there can be much more spending in all the children's programs that get their funding through annual appropriations, whether that be childcare and HeadStart, or education, or juvenile justice, or workforce training. (Note that most important children's programs, including SNAP, Medicaid, CHIP, the EITC, foster care, child support, and many more, have mandatory funding, not subject to annual appropriations. This means when the government shuts down they are not affected and for the most part they are not subject to sequestration.)

There is some indication that any agreement on the defense and nondefense appropriations caps will be a two-year deal and include FY 2019.

The current CR runs out February 8. Just as CHIP was attached to the last one as a sweetener to vote for the CR, there are several possible packages that might get attached to the next CR. If they have reached an agreement on appropriations caps, it might be a deal to undo the sequester in defense and nondefense spending for Fiscal Years 2018 and 2019, in which case the February 8th CR would then give Congress time to allocate those funds among the many individual programs. Other possible sweeteners include a health extenders package (including funding for the Community Health Centers and possibly even Home Visiting, although that is not clear), and the emergency supplemental disaster funding for Puerto Rico, Florida, and Texas.

Once they reach a deal on the overarching caps, they can finish up FY 2018 appropriations, probably in one giant Omnibus bill. It's not clear how much time it will take to write the Omnibus once the caps are set. On the one hand, it usually takes months. On the other hand,  there has been a lot of negotiation all along. The current expectation is that there will be at least one more CR on February 8th and possibly more.

Fiscal 2019

Let's review the normal budget process: The first step for FY 2019 would be for the President to announce his top priorities in the State of the Union, and then release his budget. Then all the House and Senate members would send their wish lists to the Budget Committees. The House and Senate Budget Committees would develop budget resolutions in March that set the FY 2019 302b allocations (the amount that each Appropriations subcommittee can spend on programs in its jurisdiction) and the plan for mandatory spending changes. The House and Senate would then vote on a final compromise resolution in April.

If the leadership wants to enable fast-track reconciliation legislation to raise or cut taxes or cut entitlement programs, the authority for that process would be created in the Budget Resolution, which only requires 51 votes in the Senate (incidentally, it does not require the President's signature since it's not legislation, just an internal governance document setting forth the procedural rules). If the Budget Resolution has plans for cuts to mandatory spending or tax cuts, but it does not include reconciliation instructions, any legislation implementing those plans must go through regular order, including requiring 60 votes in the Senate, and is effectively dead in the water.

Congress does not have to have a Budget Resolution and in many years has not had one.

Once the Budget Resolution is final, or in May if they do not reach a final budget resolution but have set the top-line spending amounts and the amounts for each bill, the appropriations committees can get to work on FYI 2019 appropriations. 

This year the State of the Union is next Tuesday, January 30, at 9 pm eastern. Other administrations would be leaking plans for major proposal around now. The only leaked proposal so far is for a large infrastructure proposal; there will also be comments about the immigration proposal that was announced n Thursday and will be officially released on Monday.

The President will release his Budget, which should have a lot more detail, on February 12. This is a wish list with no legal authority. The Congress will write its own budget and choose which of the President's priorities to include. If he chooses to fight for some of his priorities, they will likely get included, but last year he wrote his budget mostly from the Heritage Foundation's budget recommendations and it wasn't clear whether the president would actually fight for any of the budget. Since we are still working on FY 2018, it's still not clear which are his priorities, except for the border wall.

Meanwhile, January 31-February 2 is the Republican Retreat. Keep in mind that this is one of the few times where the House and Senate members meet together. At this retreat, they will decide what they want to do in 2018. The big budget debates will be:

  • whether to include reconciliation (fast track) instructions in the budget resolution
  • if so, whether they will be for entitlement cuts aka welfare reform, or another effort to repeal the ACA
  • if it hasn't been resolved, what the appropriations caps should be for FY 2018 and FY 2019.

The Democratic Retreat is the following week.

The other big budget deadline is the end of February, when the debt ceiling will need to be raised. This could be a non-event, or it could be a big fight with conservatives trying to tie it to a Balanced Budget bill or Balanced Budget Amendment.

Immigration, Immigrant Families, DACA and Public Charge

One outcome of the last CR is that it jump-started bipartisan Senate negotiations to find an acceptable deal on the Deferred Action for Childhood Arrivals (DACA) program and border security. If negotiators cannot reach an agreement on immigration by February 8, and if a new CR is passed so the government stays open, Senator McConnell committed to bringing legislation addressing DACA to the Senate floor for what he called a fair and open debate, including an open amendment process. Speaker Ryan has not committed to bringing immigration legislation to the House floor. If the Senate passes legislation, and the President backs it, that might force Speaker Ryan to move a bill in the House. Otherwise, it's not clear whether even a bill passed by the Senate would force the House to act. The House conservatives particularly object to citizenship for Dreamers and to allowing them to then bring in family (messaging note: pro-immigrant advocates call this family unification; anti-immigration advocates call it chain migration).

On Thursday the President offered a proposal for a path to citizenship for Dreamers in return for fully funding the Border Wall. It is too early to see how this proposal will factor into negotiations or whether negotiations will focus narrowly on Dreamers or include a broader immigration plan.

Meanwhile, there are concerns for immigrant families that are already here, including those with documentation and for citizen children in those families.

First, Immigration and Customs Enforcement (ICE) are stepping up their arrests and deportations, and they are including anyone they find in their sweeps, not just people with serious felonies.

Second, as many of you know, some months ago the administration released a draft "Public Charge" executive order that would make it much harder for low-income immigrants to enter the country, and in some cases result in their being deported if they used a wide array of public benefit programs. The administration is now planning to release these proposals as regulations. The proposals are not final, but what we know shows that they would make it harder for immigrants to demonstrate that they would not use public benefits, would allow the government to sue people who sponsored their entry to the country, and in some cases would allow immigrants who are lawfully present in the country to be deported if they use public benefits.

Sadly, this proposal and the increased ICE activity has caused widespread fear among immigrant communities. We are hearing anecdotal information about parents removing their children from benefit programs and even school, to reduce risks of records revealing their immigration status and to avoid the risk that they will lose their legal immigration status if they use the benefits. The Partnership is part of a new national coalition led by NILC and CLASP that will provide information on how states and localities may minimize the impact of the proposed regulations. There is an important call February 2 on this issue; please email us if you missed the notice on the listserve.

This week, national immigrant, public benefit, and data privacy experts are meeting in Chicago to try to figure out a plan for developing best practices for state governments, agencies and advocates on data collection.

The key point for child advocates is that, in the past, we have worked hard to integrate programs so that children enrolled in one program can be easily enrolled in other programs for which they are eligible. This strategy may now put children in immigrant families and their family members at risk. You may want to review this strategy or initiate efforts to change agency data collection practices or develop protections against agency data releases. The goal of the Chicago meeting is to develop a coordinated strategy on document requirements and retention that can provide some useful guidance and tools for your work.

Attacks On Benefits Programs

Both the President and Speaker Ryan are very interested in what they call "entitlement reform" or "welfare reform". Benefit advocates are still trying to find the best messaging; one approach is to call it cuts to basic needs programs.

There are two possible approaches for this; legislative and regulatory.

Speaker Ryan would like to use reconciliation to pass legislative changes to Medicaid, SNAP, and potentially other entitlement programs.  His proposals would probably include block grants, per capita caps, and superwaivers (which would allow states to seek waivers blending several programs and reducing protections for beneficiaries). They might also include drug testing and work requirements.  Majority Leader McConnell has said that he is not interested, presumably because with a bare 51-49 majority he couldn't get it through the Senate. However, he would probably go along with it if he saw a path to success, or if he had to agree to try to make it work because of pressure from his caucus.

The President would also like to use waivers to expand the use of work requirements and probably other punitive measures in Medicaid and other entitlement programs. HHS has just approved a waiver request from Kentucky that includes work requirements. A lawsuit has already been brought challenging the waiver. We can expect more waiver approvals and more lawsuits. On the bright side, the Kansas governor has just announced he will withdraw and review his waiver request.

This is a fight that undoubtedly will happen at the federal and state level throughout the year.

CHIP, Home Visiting, and Community Health Centers

As we all know by now, CHIP has been reauthorized for six years. While advocates are thrilled that it has been reauthorized, they had hoped for ten years. Adding those last four years would actually save the government money compared to current law, because the alternatives of Medicaid and the exchange cost the government more. Thus, there may be opportunities to get those last four years included in a new bill. Advocates would like to see the savings from that extension fund programs such as Home Visiting and Community Health Centers, but there are likely to be proposals to use those savings on other programs.

The Census Is Coming Sooner Than You Think

The Census decennial funding is part of annual appropriations and thus has been level funded like all appropriations. Unfortunately, FY 2018 and FYI 2019 is when the Census Bureau needs to ramp up testing and many other aspects, so the Census is woefully underfunded. In addition, there are other threats to the quality of the Decennial funding, including no candidate for full director and an unqualified deputy director candidate for the department who fails to meet legislative requirements for full director, a possible census question about citizenship that would make immigrants much less likely to fill it out, and a decision not to adopt the improvements on race and ethnicity that were developed under the Obama administration and are believed to make it more likely that people would report their race and ethnicity.

Partnership members in California and Pennsylvania are already part of efforts in those states to conduct Census outreach and expand compliance. (I am sure members in other states are as well.) The Partnership has just joined the national coalition working on outreach and will update members on its activities and resources.

Other Reauthorizations: SNAP, Child Nutrition, TANF

SNAP is up for reauthorization this year as part of the Farm Bill. This poses great risks. Not only will it be competing, as it always does, with agribusiness for allocation of the Farm Bill funding, but this provides an alternate vehicle for some of the "welfare reforms" that Trump and Ryan are seeking. In addition, Senator Cochran, who sits on the Senate Agriculture Committee and has long been one of the SNAP/food stamp Republican champions, has become very frail, is possibly suffering from dementia based on news reports of his confusion, and is rumored to be likely to be stepping down.

Child Nutrition reauthorization (School meals, CACFP, Summer Feeding and WIC), which is separate legislation and is overdue, is stalled. Advocates are not pushing it because of fears that any reauthorization legislation would make destructive changes.

TANF Is also stalled. If Speaker Ryan sees it as a vehicle for his goals for "welfare reform" the House might start reauthorization legislation, but since his real goal is to cut entitlement programs and TANF is no longer an entitlement program, right now that seems unlikely.