November 19, 2019

House Message on H.R.3055 – The Second Continuing Appropriations Act, 2020

NOTEWORTHY

Background: The federal government’s new fiscal year began October 1, but the House and Senate have not yet completed action on the 12 annual funding measures. The government is currently operating under a temporary continuing resolution that expires November 21. Without full-year appropriations or a temporary continuing resolution in place by the deadline, the government will shut down. The House message to accompany H.R.3055 is another short-term continuing resolution that would extend the provisions of the expiring CR until December 20.

 

Floor Situation: The House message to accompany H.R.3055 passed the House on November 19 by a vote of 231-192. The Senate is expected to vote on the measure this week. A House message is privileged: the motion to proceed is not debatable, but 60 votes are required to end debate on the measure, unless a consent agreement is reached. 

Executive Summary: Division A provides temporary appropriations for all federal agencies through December 20, in an amount equal to a prorated proportion of full-year enacted budget authority for 2019. The division includes anomalies that are common to CRs – for example, a funding exception for FEMA’s Disaster Relief Fund to ensure it has the resources to respond to a natural disaster while operating under the CR – as well as one-time anomalies for unique or mission-critical programs like the 2020 census and the CDC’s Ebola response. Division A also reiterates the 3.1% military pay raise scheduled to take effect January 1. The CR does not contain any new restrictions on transfer authorities that would limit funding for construction of the wall on the southern border.

Division B renews the health and human services-related extenders included in the first CR. It also makes technical corrections to the Victims of State Sponsored Terrorism Fund, repeals a $7.6 billion Highway Trust Fund rescission, and extends important intelligence-gathering programs that would otherwise expire after November 21.

OVERVIEW OF THE ISSUE

Continuing resolutions extend funding for the affected federal agencies but at the level and rate of spending equal to the prior appropriation. In general, this includes the continuation of prior year cancellations, rescissions, and funding previously designated in accordance with budget laws for overseas contingency operations, disaster relief, or other emergencies. Congress has enacted one or more CRs in 40 of the last 43 fiscal years (1977-2019).

The temporary funding provided in a CR ensures the government remains open and operational, but the restrictions and uncertainty imposed by a CR can delay or disrupt an agency’s ability to provide services or respond to new circumstances. For this reason, CRs often include anomalies, or deviations from the prior level of spending, which modify the timing, amount, or purpose of the stopgap funds. Anomalies often are used to address the funding needs of essential services or programs that have high rates of spending at the beginning of a fiscal year (e.g., distributions of funds to states or grantees).

Once a CR is enacted, the Office of Management and Budget apportions funds available for obligation to agencies as a percentage of the annualized amount provided in the CR, unless there is an anomaly in place to do otherwise. For an example, see OMB’s apportionment letter to federal agencies from September 2019.

NOTABLE BILL PROVISIONS

Division A – Continuing Appropriations and Anomalies

Extends 2019 appropriations for programs and activities included in the previous continuing resolution through December 20 or until full-year appropriations are enacted, whichever happens first.

Incorporates the following conditions, by reference to the expiring continuing resolution (P.L. 116-59):

  1. Iterates traditional restrictions on funds made available by continuing resolutions. For example, agencies cannot produce items that were not funded in 2019 or initiate any new starts. Agencies can, however, spend at a rate to prevent furloughs.

  2. Declares that amounts extended by the CR and previously designated by Congress in accordance with budget laws for “overseas contingency operations,” disaster relief, or other emergencies carry those same designations under the CR. Rescissions and cancellations of 2019 budget authority are treated similarly unless otherwise stated.

  3. Maintains existing transfer authorities regarding construction of the southern border wall.

Makes the following adjustments to existing anomalies in the expiring continuing resolution:

  1. 2020 census (Section 122 in the expiring CR) – Increases the rate of operations for the Bureau of the Census to $7.2 billion, equivalent to the agency’s 2020 full-year appropriation in the Senate bill.

  2. Indian Health Service (Section 136 in the expiring CR) – Increases the rate of operations for health care services, from $18.4 million to $26.6 million, and for health facilities, from $631,000 to $1.2 million; and

  3. CDC Ebola response (Section 138 in the expiring CR) – Increases the rate of operations for the CDC’s Ebola response program from $20 million to $30 million.

Includes the following new anomalies:

  1. Commodity Assistance Program (new Section 146) – Allows funds to be apportioned at a rate needed to continue serving the Commodity Supplemental Food Program’s current caseload of recipients. This program provides food to low-income seniors.

  2. Military pay raise (new Section 147) – Reiterates the 3.1% pay raise for military personnel provided in Executive Order 13866, which will take effect January 1, 2020.

  3. Payment in lieu of taxes (new Section 148) – Increases the rate of operations for the federal PILT program to $400,000 to cover administrative expenses.

  4. Widow’s benefit (new Section 149) – Provides the statutorily required death benefit to the widow of Rep. Elijah Cummings.  

Temporarily delays the publication of the annual CBO and OMB final sequestration reports – presumably until full-year appropriations for 2020 have been enacted.

Division B – Health and Human Services Extenders and Other Matters

Sections 1101-1602

Extends the authorization of, and funding for, health-related extenders included in the expiring continuing resolution. The extensions uphold Hyde protections, which restrict abortion funding for federal programs providing health services.

Section 1701 – Victims of State-Sponsored Terrorism Fund

The VSSTF provides compensation to certain victims of international state-sponsored terrorism. This section would make technical and clarifying changes to the program:

  1. Allow the special master of the Justice for U.S. Victims of State Sponsored Terrorism Fund to use up to five additional Justice Department personnel (in addition to the current five) in carrying out his duties;

  2. Open the fund to new applications for compensation by victims of the Iran hostage crisis of 1979-81 (in addition to those already eligible);

  3. Direct the special master to divide all available funding for compensation on a 50-50 basis between 9/11-related and non-9/11-related victims of state sponsored terrorism, and subsequently on a pro rata basis to victims within both categories.

  4. Authorize third-round payments to satisfy eligible claims.

  5. Reduce the maximum fees for attorneys representing victims of state sponsored terrorism from 25% to 15%.

Section 1702 – Repeal of Highway Trust Fund rescission

Repeals a $7.6 billion rescission of contract authority for fiscal year 2020 that was in the 2015 surface transportation reauthorization law, known as the FAST Act. Contract authority is a mandatory form of budget authority. This rescission of unobligated contract authority for federal-aid highways was set to happen on July 1, 2020.

Section 1703 – Sunsets

Extends to March 15, 2020, the following FISA-based authorities that are set to expire on December 15, 2019: traditional business records (referred to as “Section 215” records); call detail records; roving surveillance; and the “lone wolf” provision that enables the government to target certain people engaged in international terrorism.

Section 1801 – Budgetary effects

Scorekeeping language that prevents the budgetary effects of Division B from being entered on the Senate and statutory pay-as-you-go scorecards. Specifies that the budgetary effects of Division B are not counted as discretionary spending and hence do not count toward the caps. Further, if end-of-year legislation in calendar year 2019 results in a debit on the statutory PAYGO scorecards for fiscal year 2020, to avoid an immediate mandatory sequester, the balance in 2020 will be recorded in 2021 instead.

ADMINISTRATION POSITION

At the time of publication, a Statement of Administration Policy was not available.

COST

According to CBO, the annualized rate of spending authorized by Division A is $1,349 billion in budget authority:

  1. $1,257 billion in regular (base) spending: $648.5 billion for defense and $608.6 billion for nondefense;

  2. $78.3 billion in OCO-designated spending;

  3. $12.2 billion in disaster-designated spending; and

  4. $1.8 billion in program-integrity spending.

Because the CR is a continuation of 2019 enacted appropriations (with some anomalies), Division A spending is below the amounts allowed or recommended for 2020 in the most recent bipartisan budget agreement.

These estimates of budget authority are approximately $4 billion higher than CBO’s cost estimate for Division A of H.R.4378, the first continuing resolution. CBO explains that this is attributable to: increased 2020 census funding in the current CR ($3.7 billion); technical revisions to CBO’s previous estimate ($250 million); and the addition of $8 million in emergency-designated spending that was mistakenly omitted from CBO’s estimate of H.R.4378.

Division B would increase net direct spending in 2020, the budget year, by approximately $8 billion in budget authority and $415 million in outlays. Over the 10-year budget window, spending would increase by approximately $77 billion in budget authority and $1.1 billion in outlays. These costs are largely attributable to the repeal of the Highway Trust Fund rescission in 2020 and the required budgetary treatment of that rescission in subsequent years.