FY2017 Omnibus - TCS Analysis | Taxpayers for Common Sense

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FY2017 Omnibus - TCS Analysis

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May 01, 2017
Programs: Budget & Tax


With 20 years of experience, TCS staff will be combing through the FY2017 Omnibus spending plan and posting our observations and analyses on this page in a continuously updated blog.


 

May 3, 2017

 

 

May 1, 2017

 

 


Stay tuned for live developments as we comb through the details of the FY2017 Omnibus. 


May 3rd 5:20pm

New Increases for Nuclear Energy Programs
 

If the Omnibus passes, the Department of Energy (DOE) will spend more than $1 billion on its nuclear energy program in FY 2017, reaching a threshold not seen in recent history, and perhaps, ever. As we noted when President Obama’s FY 2017 budget request was released, DOE’s spending on nuclear energy technology development has been climbing ever higher for years. The FY 2017 Omnibus continues the trend by allocating $1.02 billion for the program. That amount, if enacted, would be almost 20% more than DOE spent five years ago, and would mean the nuclear energy budget has grown at roughly four times the pace of inflation in that period. The question is: why?

Looking at the relative growth of the line items under the “Nuclear Energy” umbrella, the reason for the overall increase is not clear. In addition to funding for activities at the Idaho National Laboratory, the big winner has been the Nuclear Energy Enabling Technologies (NEET) program, which has a proposed FY 2017 budget more than 150% of what it was in FY 2012.

The outsized increase for NEET is particularly surprising because in the last two years, the DOE has requested less for the program than Congress has been willing to provide (a rarity across the government), even as DOE’s requested Nuclear Energy budget increased overall. In its FY 2017 budget justification, the DOE noted that it had spent the excess $20 million it received but hadn’t requested in FY16 and, once again, didn’t need as much for the upcoming year. And yet, the omnibus would increase NEET’s funding by $3 million over last year to $115 million this year. For NEET at least, Congress seems to be appropriating on auto-pilot.

The other noteworthy plus-up in the nuclear energy budget is the additional $32.5 million for the Small Modular Reactor (SMR) Licensing Technology Program. SMRs, in theory, are mass-producible reactors that generate less than 300 MWe, compared to traditional reactors that produce around 1,000 MWe.

The SMR Licensing and Technology Program has been funded since FY 2012, but the increased support for it in the omnibus seems particularly unjustified. The bill would provide $25 million for the “first award” given out by the program in 2013. That award of more than $200 million was given to a Babcock & Wilcox (B&W) subsidiary for their mPower SMR design in conjunction with the Tennessee Valley Authority (TVA), who would begin planning to build the mPower in the future. Despite the award, B&W decided to stop funding mPower in 2014. The $25 million, therefore, would go to TVA, who is in the midst of applying for a license to build an SMR, even though the one for which the award was originally given is obsolete.


May 3rd 4:45pm

Protectionism Preserved In Omnibus Appropriations Bill

 

We are continuing the hard slog through the more than 2900 pages that comprise the Omnibus Appropriations bill for FY17.

W-a-a-a-a-y at the end of the Pentagon’s portion of the report is something called “General Provisions”. Blandly named, this section always has some juicy tidbits for budget watchdogs like us to gnaw. This is where the much-maligned program forcing the Pentagon to ship coal from Pennsylvania to Germany resided for more than 40 years. Every year. But not last year or this year! Score one for common sense!

We always take great interest in reading the General Provisions and pointing out the wasteful policies that are perpetuated therein year after painful year. This is where a number of other protectionist provisions can still be found. And FY17 is no different. The omnibus continues wasteful, protectionist policies to require the Pentagon to buy the following items from exclusively American sources:

  1. A certain class of anchor and mooring chain,
  2. Ball bearings, and
  3. American flags

We’ve said it many times before and we’ll say it again now, the Pentagon should set fair requirements for the items they need to purchase. They should enumerate those requirements when they put the item out for bid and they should purchase a product that meets those requirements at the best price. Even if it’s made outside the United States. Our folks in uniform deserve the best equipment and sometimes that’s made somewhere else.

The Pentagon budget should never be used as a jobs program. 

 

May 3rd, 10:00am

More Money for Fossil Fuel R&D Program

 

This year, the Department of Energy’s (DOE’s) Fossil Energy Research & Development (R&D) program will receive $668 million, according to the Omnibus. That’s $36 million more than last year and $68 million more than requested. As you’ll see from years past, this continues a pretty marked trend of creating a large “plus-up” for fossil energy R&D. The result of all these plus-ups is that this budget line in the Omnibus is now 20 percent more than three years ago, and 25 percent more than five years ago.

Funding Line

FY15 Request

FY15 Cromnibus

FY16 Request

FY16 Omnibus

FY17 Request

FY17 Omnibus

Compared to Request

Fossil Energy R&D

475,500 

571,000 

560,000 

632,000 

600,000 

668,000 

+ 68,000

 

That naturally raises the question, where is all the new money going? The Fossil Energy R&D program predominantly funds coal technology development – a subsidy for the coal industry – and the increases have largely been allotted to the different facets of that work, some more than others.

This year, the bump in funding is mostly attributable to the proposed addition of $50 million to the pot for, “two large-scale pilots which focus on transformational coal technologies…” The bill’s companion explanatory statement goes on to list which technologies qualify as “transformational,” and it includes, “pressurized oxygen combustion and chemical looping, and improvements in carbon capture systems technology.” That’s a roundabout way of saying the money will go toward helping carbon capture and sequestration (CCS) projects – the first two on the list both facilitate carbon capture.

The $50 million add-on is both unsurprising and outrageous. For almost two decades, the DOE and lawmakers have been pushing the idea of CCS. After spending billions of taxpayer dollars, they have little to show for it.

In fact, to learn why spending money on CCS is such a bad idea, lawmakers need only look 16 pages further down in the bill. In section 308 of Division D, the omnibus rescinds $240 million that was previously allocated to…CCS demonstration projects! That money and other hundreds of millions of dollars were allocated for what was called the Clean Coal Power Initiative (CCPI), which was intended to “initiate demonstration of advanced coal-based power generation technologies.” Sound familiar?

A number of the CCPI projects failed, and when they did, DOE’s Fossil Energy office determined that “the optimal approach” would be to take back the money allocated to those projects and put it to other uses. Unfortunately for taxpayers, the DOE can’t take back all of the money it has wasted on CCS.

Proposing $50 million in new funds for CCS projects in the same bill as rescinding $240 million from CCS projects that failed? That sounds like irony, or a bad joke. At the very least it’s not good policymaking.


May 1st, 4:40pm

 

Pentagon Contractors get May Baskets Full of Ca$h

 

It’s a hardy perennial here in Washington DC. Whenever there is a huge appropriations bill that includes Pentagon spending, you can be certain there will be plenty of money tucked into that bill for things the Pentagon never asked for in the first place.

This chart represents the programs that Congress insisted on funding, even when the Pentagon didn’t ask for them. Consider that the combined Fiscal Year 2017 Pentagon budget request for the “base” budget and the Overseas Contingency Operations budget was a whopping $583 billion. Even in a massive budget request – made almost fifteen months ago now – the Pentagon didn’t think it needed these programs. It’s not like the Obama Administration was asking the Pentagon to scrape by on a limited budget; $583 billion is robust by anyone’s measure.

But the Congress just can’t help itself. And so Members added more money for F-35s as well as more for the Navy’s F/A-18 Super Hornet. And while we have often said the Super Hornet is an affordable alternative that can bridge the gap to the future of unmanned drones, the only way you can call it more affordable is if you simultaneously stop buying the massively expensive F-35.

There’s also a massive $1.7 billion plug for another LPD-17 the Navy never requested. And don’t get us started on the ridiculous $750 million for the so-called National Guard and Reserve Equipment Fund which is just a backdoor form of earmarking.

So on this May Day, Pentagon contractors all over the Washington region opened their front doors to find May Baskets of cash, courtesy of their friendly Members of Congress, just waiting to be plucked.

 


May 1st, 3:30pm

Dairy and Cotton Bleat for More Subsidies

 

In the explanatory text for Division A – Agriculture, Rural Development, FDA, and Related Agencies, special interests representing agribusinesses producing cotton and dairy once again make the case for Congress to increase spending on their particular businesses. The text mandates that within 60 days the newly installed Secretary of Agriculture “issue a report detailing administrative options for financial relief and recommended legislative actions to provide the cotton industry with a viable safety net.” In addition, when discussing the dairy sector, the committee states “[t]he Secretary is encouraged to use all available methods and authorities, including the use of the Commodity Credit Corporation Charter Act, to provide immediate assistance to these producers until such time as a revised safety net program can be provided.”

This is Congressional-speak for do all you can administratively to shovel us more cash until we pass a farm bill that legislatively forces taxpayers to give us even more cash.

Backers of the 2014 farm bill were able to get the trillion-dollar bill across the finish line in large part because they promised new programs subsidizing the incomes of agribusiness would be less costly than those in effect at the time. Now three years into the farm bill, these “cheaper” commodity income subsidy programs are vastly over budget. That is for every commodity other than cotton or dairy, two programs that, because prices and yields are higher than anticipated and costs of production are lower, are actually less costly than anticipated. But in the up-is-down world that is Washington, the Agriculture Committees view programs $24 billion over budget as success stories and other programs coming in cheaper than anticipated as failures in need of emergency fixes.

Thankfully income subsidies for agricultural businesses, like other income entitlement programs, are not subject to annual appropriations but paid out automatically. So appropriators can’t directly mandate more dollars be directed to producers of specific products. The administration does, however, have broad authority to use Depression-era laws to buy-up “surplus” food products and take other measures to try and pad the bottom lines of select agricultural businesses. They’ve done it repeatedly in the case of literal government cheese. And there’s calls for doing it for cotton.

Taxpayers can afford to provide a financial safety net for agricultural businesses that is cost-effective, transparent, holds all parties accountable and is responsive to current needs. Taxpayers cannot afford for special interests to use every trick in the book to harvest more cash from taxpayers. Hopefully freshly-appointed Secretary Sonny Perdue will remember this when looking at his “administrative options.”   


May 1st, 2:55pm

Department of Interior Budget

 

Overall, the Department of the Interior gets a small bump from last year, with the biggest increases going to the National Park Service and the Bureau of Indian Affairs. The topline amount for DOI is roughly the same as what the White House had originally requested, though the spending is distributed somewhat differently.

Interior and Environment Appropriations for FY2016

     

($, in millions)¹

             

Budget Line

FY16 Amount

FY17 President Request

FY17 Amount

FY17 Compared to FY16

%

FY17 Compared to President Request

%

DOI²

12,016

12,242

12,252

+ 235

2%

+ 10

0%

NPS

2,851

3,101

2,932

+ 81

3%

- 170

-5%

BIA

2,796

2,934

2,860

+ 64

2%

- 74

-3%

FWS

1,508

1,563

1,520

+ 11

1%

- 43

-3%

BLM²

1,237

1,245

1,252

+ 16

1%

+ 7

1%

USGS

1,062

1,169

1,085

+ 23

2%

- 84

-7%

OSMRE³

241

158

253

+ 13

5%

+ 95

60%

BSEE³

88

96

83

- 5

-6%

- 13

-14%

BOEM³

74

80

75

+ 0

1%

- 6

-7%

¹Totals include both discretionary and mandatory funding, net of rescissions

     

²Figures represent only amounts appropriated in this bill, not the total amount appropriated for each agency. For e.g., DOI receives significant appropriations from the separate Energy & Water appropriations bill every year

³Amounts for these agencies are net appropriations made by the bill, reflecting the deduction of offsetting receipts

 

May 1st, 1:00pm

Cracking Open Cyberspace Spending

 

At TCS we’re working to produce a database of unclassified cyber spending across the federal government. This has been a massive and complicated undertaking in part because cyber spending tends to be tucked into larger information technology budget lines. Because there is no clarity offered for exactly how much of a specific budget line is direct cyber spending, our database will overstate spending in some cases. This has been a frustrating blind spot for us as we work on this project.

So it is with some comfort that we find the following language in the section of the Omnibus Appropriations bill for Fiscal Year 2017 that describes Pentagon spending:

“The agreement fully funds the fiscal year 2017 base budget requirement of $6,734,000,000 for the Army, Navy, Marine Corps, Air Force, and the defense agencies cyberspace activities, an increase of $992,000,000 over the fiscal year 2016 enacted level.

“While the Service and defense-wide budget justification material, as well as the Department of Defense classified cyberspace activities information technology investments budget justification materials, provide some level of detail, much of the funding is encompassed within larger programs and funding lines, which limits visibility and congressional oversight of requested funding for cyberspace activities specifically.”

We couldn’t have said it better ourselves. The Pentagon spending portion of the Omnibus goes on to say:

“Beginning in fiscal year 2018, the Department of Defense Chief Information Officer is directed to modify the cyberspace activities exhibit in order to provide increased visibility and clarity into the cyberspace activities funding requirements and changes to funding requirements from the previous fiscal year enacted levels…”

We suppose it’s comforting to know that it isn’t just our crack budget analysts at TCS who are having trouble winkling out exactly how much of each funding line is devoted to cyber spending. Even the United States Congress can’t get the level of detail they request.  Our only suggestion is that the level of clarity the Congress is requesting in the Pentagon budget request should apply across all unclassified federal spending on cyber activities. 


May 1st, 11:45am

Real Money for a Virtual Border Wall

 

The portion of the Fiscal Year 2017 omnibus appropriation for the Department of Homeland Security includes an additional $1.52 billion for “enhanced border security.” DHS is directed to have “obligation plans” for this massive plug of cash within 45 days.

Of this $1.5 billion, the bill language enumerates $487.1 million in “Border Security Assets and Infrastructure.” The President’s original demand for a down payment for a physical wall on the entire border was delayed. So this roughly half a billion dollars will, instead, be spent on technology to approximate a “virtual wall.” Remember SBInet? It was an unworkable idea when it was scrapped in 2011, and yet here we go again. Half a billion of your tax dollars will be speculatively spent to see if we can make this work this time.

Among the specific expenditures:

  • $20 million on “tactical communications”
  • $10 million on National Targeting Center Enhancements
  • $39.8 million on Port of Entry Technology Enhancements
  • $18.1 million on a Tethered Aerostat Radar System
  • $3.3 million unspecified spending for the Office of Infrastructure and Technology
  • $37 million Remote Video Surveillance Systems
  • $11.5 million for Mobile Video Surveillance Systems
  • $20 million for Additional RVSS and MVSS in the Rio Grande Valley

If all this sounds familiar to careful readers of TCS budget analysis, that’s because these technologies were on an old Customs and Border Protection wish list from several years ago. We didn’t believe SBInet would work and we have our doubts about throwing more tax dollars at more technology on the border. And rushing the delivery of plans to spend this much money is an invitation to waste.


May 1st, 11:30am

Statement by TCS President Ryan Alexander on the FY2017 Full-Year Omnibus

 

Finally, 212 days into the fiscal year, Congress appears set on a deal to fund government for 2017. The delay, however, does not appear to be the result of a rigorous debate on prioritizing federal investments. Nor does it appear to be about keeping spending within the legally binding budget caps Congress and the President have continually agreed to on a bipartisan basis since 2011. Instead Congress claims to adhere to the $1.07 trillion discretionary spending cap, while practicing budgetary infidelity with more than $100 billion in off-budget spending. Rather than continue paying lip service to growing deficits and our nearly $20 trillion national debt, Congress must buckle down and right size defense and non-defense discretionary spending, tackle comprehensive tax reform, and deal with the challenges presented by Medicare and Social Security.

All told the bill and explanatory text total 3000 pages, that’s a lot for policymakers to speed read in the next couple days. The bill doesn’t include the sugar pill border wall, but does include $1.5 billion dollars for additional border security measures, two-thirds of which is undefined. Seven months into the fiscal year, it’s past time to turn the page on fiscal year 2017 and begin the fiscal year 2018 budget cycle so we don’t have another budgetary train wreck on October 1st


May 1st, 10:55am

The Omnibus spending plan funding the government until September is live

 

At the stroke of midnight, or 12:49 am according to the time stamp, the House Appropriations Committee finalized text of a $1.163 trillion spending bill covering government programs through the end of September. Totaling more than 1600 pages of legislative language with close to 1400 additional pages of explanatory text, it’s going to require a quick turnaround for anybody looking to uncover just where the money is being spent.

We’re already 212 days into fiscal year 2017 and Congress should be well into the appropriations process for Fiscal Year 2018, so it’s expected the House will vote on this legislation on Wednesday May 3. 

Taxpayers for Common Sense will be going through the bill line-by-line and posting our analysis at this link. Initial bill language and explanatory notes released by the House Committee on Appropriations is below: 

House amendment to Senate amendments to H.R. 244 (Rules Committee Print 115-16, showing the text of the Consolidated Appropriations Act, 2017.) 

 


 


May 3st, 10:00am




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