Washington Snapshot

Washington Snapshot: Senate Action on Budget Deal Done; Federal Reserve Cuts Interest Rates

Thursday, August 1, 2019 - 4:20 pm EDT

Note: Last week we said we were taking a break while Congress was in recess, however we decided to send an update due to the Senate deliberations over the budget this week and other important updates. We still encourage you to connect with your representatives while they are on recess and back in their home districts.

In This Week's Snapshot...

Congress IconNews from the Hill

House Education and Labor Chairman Expresses Concern about School Meals Eligibility Impact

More than 500,000 children could lose automatic eligibility for free school meals under the Trump administration's proposed food stamp overhaul. House Education and Labor Chairman Bobby Scott (D-Va.) sent a letter on July 26 to Department of Agriculture Secretary Sonny Purdue asking for verification of the numbers of children impacted, suggesting that when the rule was published in the Federal Register the impact of the estimate was not included in the discussion. He has asked USDA officials to revise the rule to include the impact information and to restart the 60-day comment period.

Senate Action on Budget Deal Done - Finally

The Senate today cleared a two-year $2.7 trillion budget deal that would fend off billions of dollars in looming sequestration cuts and prevent the nation from defaulting on its debt for the next two years.

In a 67-28 vote, the chamber passed the measure, H.R. 3877(116) after Senate leaders and President Donald Trump reached out to wavering GOP lawmakers in a last-minute drive to whip a better showing of Republican support than the party mustered for House passage last week.

Working under the new budget limits, appropriators will spend September trying to craft and pass bipartisan spending bills before federal funding runs out on Sept. 30. But because Congress returns from August recess a week after Labor Day — leaving just 13 workdays before the start of fiscal 2020 — spending leaders in both parties doubt Congress will clear all 12 of the annual funding measures by the deadline.

Appropriations Scramble Can Now Begin

Once the new budget caps become law, the official beginning of the fiscal 2020 appropriations season will begin. The House Chairs Anita Lowey ( D-NY) and Sen. Richard Shelby (R-AL) who run Congress' appropriations panels know their best effort might not be good enough to clear the full dozen funding bills before the new fiscal year begins on October 1.

House appropriators have marked up all their spending bills for the upcoming fiscal year and passed ten already. But here’s the next challenge: the levels they used to write those bills now differs from what the budget deal dictates. House appropriators will now need to account for about $5 billion more in military spending and about $15 billion less for non-defense programs. So back to the drawing board?

BTW: the Senate hasn't rolled out a single fiscal 2020 measure.

Meanwhile in the Senate Appropriations...

Senate Appropriations Chairman Richard Shelby (R-Ala.) says subcommittee chairs will probably get their 302(b) numbers this week or early next. Then the panel will hold its first fiscal 2020 markup on September 12. The next step is unclear, as leaders decide whether it makes sense for the Senate to pass its bills on the floor or head straight to negotiations with House appropriators on deals that could make it through both chambers.

Senate Budget Committee Chair Released Proposals to Fix the Federal Budget Process

This week, the Senate Budget chairman, Sen. Mike Enzi (R-WY) submitted a broad plan to overhaul the federal budget and appropriations process. The four proposals reflect input from both sides of the aisle, the Trump administration and state officials, that address reorientation of the budget planning period, Committee leadership accountability, transparency of estimating methods, and the process for considering budget resolutions.

We wish you well in this endeavor, Senator.

Executive & Regulatory News IconExecutive & Regulatory News

FEMA Issues Evacuation and Shelter-in-Place Guidance

FEMA released Planning Considerations: Evacuation and Shelter-in-Place: Guidance for State, Local, Tribal, and Territorial Partners yesterday. The document draws upon the collective experience of those partners to provide relevant concepts, principals, and guidance as a resource for emergency managers and planners.

Federal Reserve Cuts Interest Rates

The Federal Reserve Board announced a cut in interest rates for the first time in more than a decade, as a slowdown in global growth and the fallout from President Donald Trump's trade wars cloud an otherwise solid U.S. economy.

The Fed lowered rates by one-quarter of a percentage point "in light of the implications of global developments for the economic outlook as well as muted inflation pressures." Inflation has persistently remained below the central bank's 2 percent target, despite unemployment below 4 percent, suggesting there is more room for people to join the labor market and for wages to rise.

Two Fed officials voted against the cut — Kansas City Fed President Esther George and Boston Fed President Eric Rosengren, preferring for the Fed to take no action.

The stock market experienced a steep fall after the announcement on Wednesday.

State Policy IconHappening in the States

Montana Judge Blocks IRS Rules on Nonprofit Donor Disclosure

On July 30, a federal judge in Montana overturned an IRS rule that stopped nonprofit groups from identifying their big donors on their federal disclosure forms. The judge said the IRS did not give proper public notice before instituting the change in the 40-year-old rule. The rule change is thus suspended until the proper public comment is undertaken.

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