December 8, 2016

Faced with a December 9 deadline to pass a new budget bill, Republican leaders in the House and Senate were scrambling this week to cobble together a short-term spending measure designed to keep the federal government operating at current levels through next spring.  While congressional Democrats and President Obama were steadfast in their calls for Congress to pass a budget through the entirety of fiscal year 2017, GOP leaders announced shortly after the elections that they would acquiescence to the incoming Trump administration and push a short-term funding bill.  The move is designed to give the Trump White House more say over how the government will spend federal dollars in the final months of the current fiscal year.

As the Legislative Bulletin went to press, the House approved a continuing resolution (CR) that would extend funding for most federal agencies through April 28th, 2017.  Cleared on a 326 to 96 vote, the measure now heads to the Senate, where several extraneous issues are threatening to derail the bill.  For one, Senator Joe Manchin (D-WV) has indicated he may delay action on the legislation unless Congress includes a long-term fix to protect certain health and pension benefits of retired coal miners.  As currently written, the bill would only extend these benefits through the length of the CR.  If Manchin refuses to back down, the Senate could remain in session over the weekend and possibly into Monday.  Even with the last-minute controversy over the health benefits issue and other matters, the CR is expected to clear the upper chamber.

As it stands, the spending measure contains several policy and funding anomalies to help the federal government deal with a number of urgent needs.  Among other things, the bill includes $4.1 billion in emergency disaster assistance to address damage from floods in Louisiana, West Virginia, Texas, and other areas.  The legislation also would designate $170 million for the city of Flint, Michigan, to address the lead contamination in its water supply.  It should be noted that the authorization for the Flint funding is dependent on passage of a separate water resources bill (see below).

With regard to federal highway and transit spending, the CR does not include the increased funding levels that were authorized as part of the latest five-year surface transportation law, known as the FAST Act.  Under the terms of the CR, these programs will instead operate on autopilot through April.  It is expected that lawmakers will provide full fiscal year 2017 funding for FAST Act programs once a final budget is approved next spring.

The CR also includes language aimed at easing Senate confirmation of retired Marine Corps General James Mattis, who President-elect Trump recently nominated to serve as defense secretary.  Current law requires that the secretary be retired from the military for a period of seven years.  General Mattis retired in 2013 and would therefore require a waiver to be considered for the post.

Aside from the fiscal year 2017 budget deliberations, the other major debate on Capitol Hill this week centered on California water policy.  On Monday, congressional leaders released the details of a hybrid bill (S 612) that combines a major Water Resources Development Act (WRDA) reauthorization and a California drought package.

Negotiated by Senator Dianne Feinstein (D-CA) and Majority Leader Kevin McCarthy (R-CA), the California drought provisions are designed to allow the Departments of Interior and Commerce to maximize the amount of Central Valley Project water that can be pumped to agricultural, municipal, and industrial water users.  Under the bill, the Departments would be provided with a certain degree of operational flexibility, the authority for which would expire after five years.

Described by Senator Feinstein as the best possible legislative option for dealing with the ongoing drought, many provisions of the bill largely track legislation (S 2533) that was proposed by the senator earlier this year.  According to Feinstein, the bill adheres to the Endangered Species Act (ESA) and relevant biological opinions for imperiled fish species and is consistent with State water law.

In terms of funding, S 612 would authorize $558 million for a variety of water supply projects, including water storage, desalination, and recycling projects, as well as funding for recycling, reuse, and wildlife protection programs.

It should be noted that Senator Barbara Boxer (D-CA), along with a number of Democratic House members, have charged that the drought language represents a poison pill that would roll back protections under the ESA and result in the loss of thousands of fishery jobs.  Accordingly, Boxer has threatened to use every tool at her disposal to delay action on the bill until the provisions are removed. 

While Senator Boxer has received some level of support from members within her caucus, it is unclear if Senate opponents of the drought provisions have enough votes to sustain a potential filibuster.   For their part, key Republicans in the upper chamber have signaled that they have the necessary support to pass the bill.

Finally, while the White House has indicated that the Obama administration has concerns with the California water provisions, they have signaled that the president’s advisors are looking at the legislative package in its totality.  The aforementioned statement may suggest that the administration will ultimately embrace the broader bill.