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This Week in Appropriations: Senate Approves Energy Spending; House Begins Defense R&D

Senate appropriations got moving again after a controversial Iran-related amendment to the stalled energy bill was defeated.

This week, the full Senate finally approved the FY 2017 Energy and Water spending bill following weeks of dispute over an Iran-related policy rider. The energy bill’s passage also let the Senate then pivot to consideration of the Transportation and Military Construction appropriations bills, which will receive further votes next week. Meanwhile, House appropriators moved forward on a Department of Defense spending bill that takes the controversial step of diverting war funding to other purposes. Debates also continue over emergency Zika funding and the House budget resolution.

FY 2017 Energy and Water Appropriations
House Status (H.R. 5055): Through Committee 4/19 | Senate Status (S. 2804): Through Senate 5/12
Funding Tables: DOE R&D | Energy Programs | Office of Science and NNSA

On Thursday, the Senate approved the Energy and Water bill by an overwhelming 90-8 vote. The bill had previously been blocked by Senate Democrats due to a proposed amendment from Sen. Tom Cotton (R-AR), which would have prohibited the United States from purchasing heavy water from Iran. The amendment had drawn a veto threat from the White House. But on Wednesday, the Cotton amendment was subject to its own vote, and subsequently failed to achieve an agreed-upon 60 votes. The amendment’s failure then cleared the way for final bill approval Thursday. The successful vote represents the earliest Senate approval of an appropriations measure in decades.

As previously reported, the bill provides only a small 1.0 percent increase for the Department of Energy (DOE) Office of Science, compared with the 4.2 percent increase requested by the Administration, and flat-funds most applied technology offices. The bill recommends the U.S. withdraw from ITER, the controversial international fusion energy project, and would redirect the $125 million slated for ITER to other Office of Science activities (see above graph). The Administration’s request for major funding increases for low-carbon technology under the Mission Innovation Initiative would not be achieved in the Senate-approved bill, while its House counterpart would go even further in the other direction (see below graph).

DOE R&D program funding levels saw only limited changes during floor amendments, which were considered beginning April 20.  A few relevant highlights include:
  • An amendment by Sen. Jeff Merkley (D-OR) to increase funding for the DOE Wind Energy program by $15.4 million, to $95.4 million total. The amendment did not change overall funding for the Office of Energy Efficiency and Renewable Energy, within which the wind program resides, and did not specify which programs would have to lose funding to offset the wind increase.
  • An amendment from Sen. Jack Reed (D-RI) to move $6 million from DOE’s Building Technologies program to the Weatherization Assistance program.
  • During the first week of floor consideration, Senators approved an amendment from Sen. Brian Schatz (D-HI) to provide an extra $32.3 million for the Advanced Research Projects Agency-Energy (ARPA-E), raising the agency’s total Senate funding to $325 million, good for an 11.7 percent increase in FY 2017. House appropriators so far have only provided a 5.1 percent increase.

The House version of the Energy and Water bill was approved by the House Appropriations Committee on April 19. Without a budget resolution, House appropriations bills cannot be brought to the floor before May 15.

FY 2017 Defense Appropriations
House Status: Through Subcommittee 5/11 | Senate Status: Not yet introduced

On Wednesday evening the House Appropriations Subcommittee for Defense approved the FY 2017 Defense Appropriations bill on a voice vote (see subcommittee summary). The bill provides $70.8 billion for Department of Defense (DOD) Research, Development, Test, and Evaluation (RDT&E) funding in FY 2017 from all sources, representing a 2.2 percent increase from FY 2016 levels but 1.9 percent below the request. Among the military branches, Air Force would receive a 7.7 percent increase; Army, a 6.1 percent increase; Navy, a 6.7 percent reduction; and Defense Agencies (which include DARPA, the Missile Defense Agency, and other agencies) would receive a 1.9 percent reduction.

The bill takes the controversial step of using war funding – dubbed Overseas Contingency Operations funding or OCO funding – to pay for base-budget activities at DOD while getting around the current caps on discretionary spending. Under last fall’s budget agreement, OCO funding, which is not subject to the spending caps, would reach about $75 billion in FY 2017. House appropriators have granted this amount, but about $16 billion would be redirected to non-OCO uses, including some RDT&E funding. War funding would thus run out in April of next year, requiring the next President and Congress to grapple with the shortfall. The move reflects a similar step proposed by the House Armed Services Committee in its latest National Defense Authorization Act, which awaits House floor consideration. The proposal to shift funding has brought forth criticism from the White House and Congressional Democrats.

The full House Appropriations Committee will consider the bill next week; additional detail will be provided in next week’s update.

Zika Funding
The Senate appears to be honing in on a deal on emergency Zika funding, though the prospects are still uncertain. Three plans will be on the docket as amendments to other spending bills next week, including a $1.1 billion bipartisan compromise achieved by Senators Roy Blunt (D-MO) and Patty Murray (R-WA). The Administration has requested $1.9 billion in supplemental spending for Zika, but Republican appropriators have balked over the size of the request and insufficient detail in the plan. In response, Republican appropriators have urged the Administration to instead utilize billions of previously-approved but still-unspent budget authority left over from the Ebola spending appropriated for FY 2015. The Administration has in fact begun using this funding, but still insists additional funding is necessary. Even if the Senate approves a deal, it will still have to go through the House.

House Budget Resolution
The House also appears to be nearing a deal on federal spending and the budget resolution. Under last fall's budget deal, base discretionary spending, which contains virtually all R&D programs, should rise to $1.07 trillion in FY 2017. While Democrats and many Republicans support this agreement, conservative House Republicans have insisted on returning to a lower pre-deal spending cap, $30 billion less than the agreed-upon level. Under the potential deal emerging this week, the $30 billion could instead be cut from other mandatory spending, leaving the current discretionary caps in place in the budget resolution (see this explainer to understand how the budget resolution fits into the overall budget process).

Quote of the Week

“I have to tell you, I’m a little bit skeptical when anyone comes and says ‘It’s an emergency, I need $2 billion, and I’ll tell you what it’s for later.’” – Sen. James Lankford (R-OK), on the Zika funding request.

Cover image credit: Department of Energy