The budget agreement reached between the Majority and Minority Leaders of the Senate is a very comprehensive package addressing many outstanding issues facing the Congress. The Senate is scheduled to vote on the package today and then the House is will call it up. Below is a summary of the major provisions in the bill.Disaster Supplemental: $89.3 billion in fiscal year 2018 is provided to respond to the disasters caused by hurricanes, wildfires and other disasters. Funding is provided throughout the federal government with 11 of the Appropriations Committee’s subcommittees writing portions of the bill. The bill also provides additional $4.9 billion for the Medicaid programs in Puerto Rico and the Virgin Islands. These funds represent a 100 percent federal match for two years.Targeted tax relief is also provided for areas affected by these natural disasters:
Continuing Resolution: The federal government is funded until March 23, 2017 through a continuing resolution (CR). The CR also addresses several “anomalies” where problems arise from straight line funding. This includes funding for the 2020 census, allowance for the Air Force to start construction for the F-35A program, and the ability for the Department of Education to make payments to the guarantee agencies for outstanding student loans, etc.Budget Sequestration: Budget sequestration is turned off for fiscal years 2018 and 2019. However, it is also extended out to fiscal year 2027 to offset the cost of the relief.Budget Caps: Discretionary budget caps for fiscal years 2018 and 2019 are increased. The bill raises the defense cap by $80 billion in fiscal year 2018 and $85 billion in fiscal 2019 and the non-defense cap by $63 in fiscal year 2018 and $68 in fiscal year 2019.The Leaders agreed the additional funding provided by the cap relief to address the following priorities:
Although funding amount for each of these priorities will receive in each fiscal year, the is not language that binds the appropriations committees to fund at these specific levels.The bill also provides for the Chairmen of the House and Senate Budget Committees to make committee allocations to the Appropriations Committee for fiscal year 2019, taking pressure of both bodies to produce a congressional budget resolution conference report. This may also help the fiscal year 2019 appropriation process to run more smoothly.Offsets: The increases in discretionary spending is partially offset by:
Public Debt Limit: The public debt limit is lifted until March 1, 2019.Joint Select Committees: Two new joint select committees are created to address the issues of solvency of multiemployer pension plans and budget and appropriations reforms. Both will be comprised of 16 Members of Congress, equally divided between both chambers and political parties. Legislation written by either joint committee will be reviewed by the committees of jurisdiction, which can vote to approve, disapprove or make no recommendation, but cannot amend the bills. Ther60-vote threshold for consideration of the legislation in the Senate will remain.Tax Provisions: The bill provides for an extension of traditional “tax extenders” that had expired at the end of 2016 and were not dealt with in the Tax Cuts and Jobs Act reform package. Among those included are for mine safety equipment; the production tax credit for certain renewable sources of energy; the 179d energy efficiency provision; the rum tax cover over (for 6 years); and the above-the-line deduction for qualified tuition and related expenses. Additionally, the bill makes several modifications to the Tax Cuts and Jobs Act. Our tax team will have a special addition of Tax Tuesday this afternoon to cover these issues more in-depth.Health Provisions: The Children’s Health Insurance Program (CHIP) is extended for four more years; this provision generates $6 billion in savings. Medicare extenders are included, while several modifications are made to Medicare Parts A and B, and the Medicare Independent Payment Advisory Board (IPAB) is repealed. The bill contains several other health programs:
Agriculture Provisions: Several changes are made to farm programs in anticipation of the difficulty facing a full Farm Bill reauthorization later this year.