Update from Washington, D.C.
Senate Republicans Ready COVID-19 Relief Bill; FY 2021 Appropriations Measures Advance in the House
July 23, 2020
After a two-week recess, the House and Senate officially reconvened on July 20 for congressional business. With a limited number of legislative days remaining before the start of the month-long August break, leaders in both chambers have set an ambitious agenda, which includes a fifth COVID-19 relief package. Throughout the week, White House officials have been huddling with Senate Republicans to discuss the contours of the forthcoming legislation, and, as of this writing, the two sides appear to have reached an agreement in principle.
While the text of the legislation is still being finalized, the GOP proposal – which is expected to total $1 trillion in federal spending – is likely to include a second round of stimulus checks, funding for testing and school reopening, liability protections for businesses that reopen, and another round of Paycheck Protection Program funding for small businesses. However, early indications are that the package will not include fiscal relief for state and local governments, though it would provide some additional flexibility on the use of CARES Act funding.
The legislation also is not expected to continue the expanded $600 per-week unemployment insurance benefit, which is set to expire next week. Instead, the current benefit would be replaced with a roughly 70 percent match of a worker’s wages before they were laid off, which would continue through the end of the calendar year. The underlying package is unlikely to include a payroll tax cut, which was one of President Trump’s top priorities.
Across Capitol Hill, the House has already approved its fifth COVID-19-relief bill, a $3 trillion package known as the HEROES Act (HR 6800). Of particular importance to California’s counties, HR 6800 includes $915 billion in direct federal aid to states and local governments. Specifically, the measure would provide: $500 billion to states; $187.5 billion to counties; $187.5 billion to cities; $20 billion to tribal governments; and, $20 billion to territories. In addition, the funds could be used to cover costs or replace foregone revenues stemming from the COVID-19 public health emergency or its negative economic impacts.
Looking ahead, leaders for both parties have indicated that they hope to get a package through Congress before the start of the August recess. However, given the differences between the House-passed bill and the emerging Senate proposal, that deadline may very well slip.
House Clears Great American Outdoors Act
On July 23, the House voted 310-107 to approve legislation – the Great American Outdoors Act (HR 1957) – that would shift the Land and Water Conservation Fund (LWCF) from a discretionary program to the mandatory side of the federal ledger. The LWCF, which is funded by a portion of offshore oil and gas leasing revenue, supports the protection of public lands and waters, including national parks, federal forest lands, wildlife refuges, and recreation areas. While the program is authorized at $900 million annually, Congress has rarely provided the full funding amount. For example, in fiscal year 2020, Congress appropriated $495 million for LWCF. Pursuant to the legislation, which now awaits the president’s signature, the LWCF would no longer be subject to the annual appropriations process and would be guaranteed $900 million annually.
In addition, HR 1957 would create a new account – the National Parks and Public Lands Legacy Restoration Fund – to address the deferred maintenance backlog on public lands, which National Park Service officials estimate at over $20 billion. The new fund, which would be maintained by a portion of currently uncommitted energy development lease payments and related revenue, would be capped at $1.9 billion per year and would go toward priority projects across federal land agencies.
Pursuant to the legislation, agencies would have to submit to Congress a list of shovel-ready deferred maintenance projects within 90 days of the bill’s enactment. A new list would have to accompany the president’s annual budget request to Congress until all amounts in the fund have been expended. Congress, through the appropriations process, could establish alternate allocations. However, in the absence of congressional action, the executive branch would have the authority to fund the projects it deems worthy.
House Set to Consider First Minibus Appropriations Package
Today, the House will begin consideration of its first fiscal year 2021 appropriations package, a four-bill minibus that combines the Agriculture, Interior-Environment, Military Construction-Veterans Affairs, and State-Foreign Operations spending measures. The legislation is expected to pass along traditional party lines before the end of the week. The chamber is slated to consider a seven-bill spending package next week.
Meanwhile, Senate appropriators have no immediate plans to begin their markups. At this stage, it’s increasingly likely that a Continuing Resolution (CR) will be needed before current funding for federal departments and agencies expires on September 30. In fact, Senate Appropriations Chairman Richard Shelby (R-AL) has acknowledged that a CR extending funding into late November or early December is almost a certainty. Moreover, depending on the outcome of the upcoming elections, there could be a desire to punt the appropriations process into January or later. In a worst case scenario, the aforementioned partisan disputes could force another federal government shutdown, though this appears less than likely given the impending elections.
The FY 2021 Agriculture-Rural Development title of the aforementioned House bill would provide nearly $24 billion in discretionary funding for programs within the purview of the U.S. Department of Agriculture (USDA), the Food and Drug Administration, and related agencies. The proposed spending level represents an increase of $487 million above the fiscal year 2020 enacted level. In total, the bill allows for $153 billion in both discretionary and mandatory funding, which is $331 million above current spending levels.
The bill also includes legislative language that would block two recent USDA rules regarding the SNAP program, including a rule that would restrict the ability of states to request and receive waivers to provide SNAP/CalFresh benefits to single individuals in high unemployment areas for more than 90 days in any three-year period. House appropriators also included language in the bill that encourages USDA to withdraw its Broad-Based Categorical Eligibility rule (BBCE), which would eliminate the long-standing use of categorical eligibility to streamline the process for determining eligibility for SNAP/CalFresh.
In addition, the committee report that accompanies the spending legislation acknowledges the difficulty farmers have faced in trying to control the legal tetrahydrocannabinol (THC) content of their hemp. In an attempt to gather additional information on the extent of the problem, the measure directs USDA to provide a report detailing the number of acres of hemp that have been destroyed for exceeding the legal limit, the number of producers found to have been negligent, and the total number of producers whose hemp has been tested for THC. In addition, the committee report encourages USDA to ensure that industrial hemp is eligible for all competitive Rural Development grant programs.
The FY 2021 Interior-Environment spending bill would provide nearly $36.8 billion for programs administered by the Department of the Interior (excluding the Bureau of Reclamation), the U.S. Forest Service, the Environmental Protection Agency (EPA), and a number of related agencies. The proposed spending represents an increase of $771 million above FY 2020 levels and $5.1 billion more than the president’s budget request. It should be noted that the measure includes $15 billion in emergency supplemental appropriations with most of that total designated for EPA’s State and Tribal Assistance Grants (STAG) account. The bill also includes an additional $2.35 billion provided under the fire suppression cap adjustment to accommodate emergency wildfire operations.
Of interest to a number of public lands counties, the legislation would provide full funding for the Payments-in-Lieu-of-Taxes (PILT) program. According to the committee report, the amount provided in FY 2021 would be $515 million, $15 million more than in FY 2020.
The bill also provides more than $5.7 billion for wildfire management and suppression activities. It should be noted that this figure includes a $2.35 billion budget cap adjustment – created by the FY 2018 omnibus spending law (PL 115-141) – that would provide additional spending authority to meet suppression costs that exceed the 10-year average. The total funding is approximately $174 million above the FY 2020 enacted level.
Finally, the bill would prohibit funding to conduct or authorize any offshore oil and gas preleasing, leasing, or exploration permitting for areas that weren’t included in the Obama administration’s final leasing plan for 2017 to 2022. The impetus for the language is a recent media report indicating that the Trump administration may be developing plans to expand offshore drilling opportunities sometime after the November elections. Earlier this month, 31 members of the California congressional delegation sent a letter to Interior Secretary David Bernhardt expressing strong opposition to any new oil and gas leasing off the coast of California. A copy of the letter can be accessed here.