With Congress wrapping up their fiscal year (FY) 2017 bill just last month, it is unclear how quickly they will be able to focus on funding for FY 2018. Much attention has been on other legislative priorities up to this point, and the pace at which Congress can address those priorities will likely impact their ability to pull together funding bills for FY 2018.

In the weeks ahead it appears that a significant amount of time and political capital will continue to be spent on health care reform. This summer, Congress will also have to address the potentially contentious topic of raising the debt limit. Tax reform continues remains a priority for the White House, as well as the House and Senate Majority. If Congress continues to devote so much time and effort to these items, then it is unlikely that significant floor time will be available to move numerous funding bills through regular order by October 1.  

Will Appropriators Move Forward Without a 2018 Budget?

The continued push for health care reform also creates some procedural hurdles. Congress plans to use a process known as reconciliation to address health care and tax reform. Simply put, reconciliation is a budgetary measure that allows Congress to pass certain bills with a simple majority vote. The Senate cannot filibuster a reconciliation bill; thus, it is considered to be easiest path toward passing broad-scale reforms to health care and tax.

Congress has not yet passed a 2018 budget because they plan to use the reconciliation process to pass health care and tax reform. Reconciliation can only take place once per budgetary cycle, and tax and health care reform cannot be accomplished under the same reconciliation bill. Passing a 2018 budget would scuttle those plans as it would nullify the health care reconciliation instructions from the 2017 budget.

Without a FY 2018 budget Congress does not have an official top-line funding level for the 2018 appropriations process. However, it appears that Congressional appropriators may opt to simply deem the budgetary caps set by the Budget Control Act of 2011 as the starting point for FY 2018 funding. Doing so would put nondefense discretionary spending at $2.9 billion less than last year. However, appropriators have additional complexities that will lower that nondefense discretionary cap even further. Congress has already enacted an additional $3 billion for veterans’ medical care in 2018. Additionally, appropriators will have to decide how to address certain changes in mandatory programs that have previously been used to increase the availability of discretionary funds. Barring legislative action by Congress to change the spending caps, the starting point for nondefense discretionary funding for FY 2018 will be at least $5.9 billion below the current year.  

Administration’s Budget Includes Significant Cuts for Education

Last month, President Trump released his budget request for FY 2018. This request represents the Administration’s spending and policy priorities. The budget proposes aggressive cuts to higher education and workforce training. Funding was eliminated for Supplemental Educational Opportunity Grants, Title III (A) Strengthening Institutions, and Child Care Access Means Parents in School. State grants under the Workforce Innovation and Opportunity Act saw around a 40 percent cut. Federal Work Study is cut by almost half, and there are millions in proposed cuts to Perkins Career and Technical Education and Adult Basic Education. A full summary of the budget request may be viewed here:  http://bit.ly/2tOccqY. 

There have been rumblings that the House is considering quickly pulling together a large omnibus spending bill for FY 2018 and passing it before August recess. This would not be a bipartisan bill and could incorporate a number of the Administration’s priorities, as well as those of the House Republicans. Even though this bill could not pass the Senate, the legislation would serve as a starting point for negotiating a final bill for 2018. However, there would be challenges to making this plan reality, as appropriators are already months behind in the 2018 process. Additionally, the idea presumes that House Republicans across the spectrum would be able to quickly and uniformly coalesce around a large funding package.

It may also be difficult to use the Administration’s budget request as a starting point for a FY 2018 funding package. The budget request would increase defense spending by $54 billion, far exceeding the caps set by the Budget Control Act of 2011. If Congress wants to revise the caps from the Budget Control Act, then they would be required first to pass legislation to make that change. Any change to the caps would have to pass both chambers of Congress, and would require some degree of bipartisan support. 

Path Ahead Remains Unclear

Much remains unknown or undetermined regarding Congressional priorities and strategy for a FY 2018 funding package. With only three and a half months left in the federal fiscal year, which runs from October 1 through September 30 of each year, it would seem unlikely that Congress could pass an appropriations bill that would shift dramatically from the status quo.

Even if the House is able to move forward with several bills or a package that includes large-scale cuts to education funding, the bill would be difficult if not impossible to pass through the Senate. An omnibus package would need reach a 60-vote threshold, and controversial spending decisions or policy riders would likely derail passage. At some point, bipartisan negotiations will have to take place. The questions that remain are: how far is the divide between negotiators, and how eager will they be to try to pull together a bipartisan package? Since we still don’t have definitive funding levels, those decisions may still be months away.

If the agenda continues to stall, we will likely see either a short- or long-term continuing resolution to keep the government running come October 1. However, opting for a long-term continuing resolution may be complex given the necessity to keep spending under the caps. This would ultimately set up a scenario where there may be potential ‘winners’ and ‘losers’ in programmatic cuts in order to keep the spending bill under mandated caps. Opting for a short-term continuing resolution would seem to be the easiest near-term solution as it would largely punt decisions regarding funding for 2018 into the fall or even winter.

The stage is set for a potentially long and complex year to get federal funding across the finish line. ACCT will continue to update community college leaders as the process unfolds.