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US Capitol

Congress Inks Spending Deal That Jettisons Trump Priorities

May 1, 2017
The compromise measure, released early Monday morning, would keep the government open through the end of September.

U.S. House and Senate negotiators reached a bipartisan deal on a $1.1 trillion spending bill that largely tracks with Democratic priorities and rejects most of President Donald Trump’s wish list, including money to begin building a wall along the U.S.-Mexican border.

The compromise measure, released early Monday morning, would keep the government open through the end of September. Under House procedures, a vote could be held as early as Wednesday. 

GOP leaders eager to focus on health-care and tax overhauls bowed to Democratic demands to eliminate hundreds of policy restrictions aimed at curbing regulations, leaving the Trump administration with few victories.

The White House sought funding to begin building the border wall, as well as $18 billion in cuts to domestic agencies, and both demands were rebuffed. The spending deal includes money for Planned Parenthood, despite Republican demands to defund the group over its provision of abortions.

Trump will be able to point to a $15 billion boost for the Pentagon, although $2.5 billion of that money is contingent on the administration delivering a new plan to fight Islamic State. It also falls well short of the $30 billion he had originally requested.

Border Security

Trump will get $1.5 billion for border security, but it can’t be used for the border wall or additional Immigration and Customs Enforcement agents, according to one congressional aide. There are also no new restrictions on money going to so-called sanctuary cities that don’t fully enforce federal immigration laws.

“Reports that the package makes a major down payment towards the president’s security priorities are encouraging,” John Czwartacki, a spokesman for the White House Office of Management and Budget, said in a statement.

Republicans failed to get a number of conservative provisions in the bill, including one that would have blocked the Labor Department’s fiduciary rule limiting financial advice to retirees. Congressional Republicans say spending riders have become a less important tool for the party because the Trump administration is already intent on rolling back regulations they dislike and can take many actions on its own.

Overall, the compromise resembles more of an Obama administration-era budget than a Trump one. The National Institutes of Health, for example, would see a $2 billion boost, reflecting the popularity of medical research among lawmakers. The deal includes $990 million for famine aid, along with a $1.1 billion boost for disaster recovery funds.

“It is a solid bill that reflects our common values and that will help move our nation forward, and I urge its quick approval by the Congress and the White House,” House Appropriations Chairman Rodney Frelinghuysen of New Jersey said in a statement early Monday.

Defense Increase

He said the measure represents a $25 billion increase in national defense funding over current levels, when extra money former President Barack Obama secured in December is included. In addition, he noted provisions including an extension of miners’ health benefits and increases in health research and opioid addiction treatment and prevention.

The Environmental Protection Agency, which Trump has sought to shrink dramatically, would receive a 1% reduction of $81 million in funding and no staff cuts.

The deal also includes steady or slight increases in funding for agencies within the Department of Energy, such the Office of Energy Efficiency and Renewable Energy, which would get a $17 million increase, and the Office of Science, which would get a boost of $42 million compared to fiscal 2016 funding levels, the aide said. The Advanced Research Projects Agency–Energy, which aims to fund experimental energy research and has been targeted for elimination by the Trump administration, would get a $15 million increase.

H-2B Visas, Truckers

The omnibus also includes measures of interest to the business community. One provision allows the secretary of Homeland Security to temporarily increase the cap in H-2B visas for temporary labor through the end of September -- a provision sought by senators in both parties. The provision frees up space by the maximum amount previously allowed for temporary workers returning to the U.S. from other countries.

The budget also includes a rider on trucker hours and increases for the NASA Space Launch System and Orion important to Boeing Co. and Lockheed Martin Corp. It does not, however, change the quorum for the Export-Import Bank needed to approve deals over $10 million, so a major backlog will continue until Trump’s nominees are confirmed.

Of interest to home-builders and the insurance industry, the bill contains provisions clarifying flood mapping under the National Flood Insurance Program.

There’s also a new $100 million fund to counter Russian influence in Europe.

Notably, agencies Trump has sought to eliminate, like the National Endowment for the Arts and the National Endowment for the Humanities and the Appalachian Regional Commission, would get modest increases in funding instead.

National Parks

The deal also includes a 2% increase for national parks, including nearly $40 million in new funding to address deferred maintenance and construction needs, according to the aide.

The legislation would classify power produced by biomass, such as wood, as a carbon-neutral renewable energy source, a change backed by groups such as the American Forest & Paper Association, a trade group that represents companies such as Deltic Timber Corp. and Resolute Forest Products, according to a senior congressional aide. Environmentalists have been opposed to the change.

More than 70 anti-environmental policy riders in the bill were defeated, the aide said.

The deal would provide a permanent, $1.3 billion extension of health-care benefits for coal miners. It would be offset by a boost in customs fees. The provision was backed by coal-state lawmakers in both chambers.

The bill contains language that would prevent the Justice Department from restricting the dispensing of medical marijuana in states where it has been legalized. It also contains $323 million for the construction of a new headquarters for the Federal Bureau of Investigation.

The package would provide $68 million extra in local law enforcement funds to reimburse New York City and other localities for protecting Trump.

Democrats’ Praise

“This agreement is a good agreement for the American people, and takes the threat of a government shutdown off the table,” Senate Minority Leader Chuck Schumer said Sunday night in a statement. “The bill ensures taxpayer dollars aren’t used to fund an ineffective border wall, excludes poison pill riders, and increases investments in programs that the middle-class relies on, like medical research, education, and infrastructure.”

House Minority Leader Nancy Pelosi also praised the deal, saying that Democrats won the removal of about 160 partisan riders. “The bill also increases funding for wildfire and federal highway emergency relief, and for Puerto Rico’s underfunded Medicaid program," she said in a statement. Under the tentative deal, the island would get some relief with $295 million in unspent money for territories for a limited time, said a congressional aide.

Democrats were pushing for an infusion of at least $600 million, so there could be more fights ahead.

Vote This Week

The bipartisan deal -- reached by appropriators in both chambers in coordination with party leaders -- would avert a government shutdown when a one-week stop-gap funding bill expires Friday. It would fund the government through Sept. 30, the end of the fiscal year.

The House Rules Committee has scheduled a hearing for 3 p.m. Tuesday to consider advancing bill, including setting procedures for a floor vote.

Agreement on the omnibus bill has been delayed by fights over a number of policy areas; Trump’s dropping of his demand last week for inclusion of money to begin work on wall along the U.S.-Mexico border was the most important breakthrough.

While Republicans control the House, Senate and the White House, congressional Democrats held some leverage in the talks because their votes will be needed in the Senate, and likely the House, for passage of the bill.

The Senate needs 60 votes to advance legislation, meaning the 52 Republicans will need help from at least eight Democrats.

In the House, passing a spending bill for the remainder of fiscal 2017 was always going to be a challenge. A solid bloc of fiscal conservatives regularly oppose big spending bills, and House Republicans have had to rely on some Democratic votes consistently since taking over the majority in 2011. Sixteen House Republicans on Friday voted against the one-week extension of current spending that kept government open.

Delayed Action

The spending bill package would finish the job of appropriating agency spending seven months after the fiscal year began. The drawn-out fight could have been avoided in December had the incoming administration not instructed Congress to hold off on passing a bipartisan spending measure in order to give it a chance to weigh in.

Beyond the border wall, obstacles to an agreement included White House resistance to demands from Democrats to guarantee the payment of billions in cost-sharing payments used under Obamacare to offset health-care premiums for low-income people.

A stronger chance for a government shutdown could come in October. Trump has sought $54 billion in defense increases paired with $54 billion in domestic cuts. Republican leaders may be less willing to bow to Democrats without the excuse of being more than halfway through the fiscal year.

Congress and the president will also need to agree on a debt ceiling increase in the fall, and White House budget director Mick Mulvaney has said he wants to use the debt ceiling to impose new spending restraints.

By Billy House, Erik Wasson and Laura Litvan

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Licensed content from Bloomberg, copyright 2016.

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