June 16, 2017

The House Appropriations Committee this week approved the first of the fiscal 2018 appropriations bills, despite the failure of the House to tell the committee how much money they will be able to spend.

On June 15, the committee approved a draft bill providing $184.8 billion in new budget authority for the Department of Veterans Affairs and for the military construction activities of the Defense Department. $96.0 billion of that money is “mandatory” spending and must be provided lest the federal government be opened up to (successful) lawsuits, so that money is exempt from budget caps. Another $638 million is designated as “overseas contingency operations” money (a work-around of the spending ceilings that was originally for the wars in Afghanistan and Iraq but which has morphed into an overall Pentagon budget supplement) and is also not subject to budget caps.

The remaining $88.2 billion is “discretionary” spending subject to the annual spending caps in the Budget Control Act. About $10.6 billion of that is subject to the annual cap on defense spending and the remaining $77.7 billion is subject to the cap on non-defense spending.

The Appropriations Committee also adopted a report allocating the $88.2 billion in discretionary budget authority to the subcommittee that produced the bill. The report said “Given at this time there is no fiscal year 2018 concurrent resolution on the budget, the Committee, in developing this interim allocation, has been guided by the current law defense and nondefense totals pursuant to the Budget Control Act of 2011 which are enforced through sequestration.”

Presumably, Appropriations chairman Rodney Frelinghuysen (R-NJ) has already given each subcommittee a budget total, but the public won’t know what these totals are until each bill is unveiled (unless the House actually passes a budget resolution or takes other action to give Appropriations a formal total to subdivide). But using the BCA cap levels, the panel’s adoption of the MilCon/VA bill leaves $437.2 billion left over for the rest of the non-defense budget. In 2017, the Transportation-HUD bill used up about $57.4 billion of the non-defense discretionary total, so under a budget freeze, T-HUD would need about 13 percent of the remaining non-defense dollars.

It is hard to draw grand conclusions based on one bill, but the President’s FY18 budget request for discretionary programs had three main components: 1. Significantly cut back on use of the OCO loophole. 2. Increase regular defense spending. 3. Decrease non-defense spending to compensate. The budget also called for a new law adjusting the spending caps consistent with points 2 and 3.

The MilCon/VA bill does increase spending for defense activities from $7.7 billion in 2017 to $9.6 billion in 2018.