Continuing Resolution

Budget & TaxContinuing ResolutionNot just funding Gov, but Beets, OPM, Hemp and Ukraine (and more)

Budget & Tax,  | Analysis
Sep 19, 2019  | 8 min read | Print Article

Last night House Democrats released their plan to keep government funded through November 21st. Not surprisingly, in addition to government funding and temporary extension of various programs, the Democrats want to limit the actions the Trump Administration can take while the Continuing Resolution (CR) will be in effect. Although apparently not when it comes to the administration’s use of FDR’s Commodity Credit Corporation (CCC) to buy itself some political will amongst farmers. Sec. 119 restores the CCC’s $30 billion line of credit allowing the administration to continue showering farming and ranching businesses with subsidies (currently totaling $28 billion). And there’s a bailout for sugar beets (Sec. 116).

Many of these limitations relate to national security activities of the Departments of Defense and State. Although a provision TCS saw in an earlier version has been excised and another dialed back. The earlier version had a lengthy provision that directed that funds be obligated in support of various international assistance programs and that they could not be subject to rescission. That’s gone. Also, a provision (Sec. 124) directing funding go to Ukraine within two months was whittled back to just extending funds. And while a CR typically keeps programs running at the same funding level of the previous year’s appropriations bill, they also specify that “high initial rates” of spending are not allowed.

So, the priorities of the leadership of the House are laid out in this draft CR. We’ll be following where this goes as it is debated on the House floor and then, on to the Senate. We’re pretty sure the priorities of the Republican-led Senate will be far different. Well, except for hemp. (See Sec. 120)

Among items of interest:

Sec. 111
This section provides authority to make payments to states to cover SNAP obligations. USDA will also have authority to send SNAP funds on December 1st, even if there is a government shutdown when this CR expires on November 21. This could help preempt a similar snafu that happened during the last government shutdown when USDA obligated SNAP funds due in February, despite not having authority to do so. That CR authorized USDA to transfer SNAP funds to states through January, but as the shutdown dragged on USDA sent February payments early in January, exceeding their legal authority and violating the Anti-deficiency Act.

Sec. 115
This appears to be a new provision relating to the continuation of Treasury Appropriations Fund Symbols, which may be continued by reducing the rate of operations.

Sec. 116
Retroactively changes the 2019 Emergency Supplemental (H.R. 116-20) enacted on June 6th, to provide “emergency” income subsidies to sugar beet processors for reduced numbers and quality of sugar beets. Carrying water for sugar processors has long been a priority for much of the Committee on Agriculture, none more than House Agriculture Chairman Colin Peterson (D-MN), who’s district produces almost twice as many sugar beets as any other Congressional District (second place is the entirety of North Dakota).

Sec. 117
Waives the requirement that researchers receiving funds under the Specialty Crop Research Initiative match the federal investment. This carveout which will be a windfall for some researchers but lead to fewer projects being funded, first appeared as an amendment to the 2019 supplemental spending bill.

Sec. 119
Enables the Trump Administration to continue buying goodwill amongst farmers affected by the trade war. This section restores the Commodity Credit Corporation’s (CCC) $30 billion line-of-credit with the Treasury. The CCC is a government entity used to finance most of USDA’s payments to farmers for agricultural income subsidies, conservation programs, and some nutrition programs (not SNAP). The Trump Administration has also been using the CCC to cut checks (so far they’ve promised $28 billion) benefiting farming and ranching businesses that lost sales due to President Trump’s trade war. Without this provision the CCC would have hit its spending limit sometime this fall. Now the administration is clear to continue spending and can unleash a third round of subsidies next year.

Sec. 120
An additional $16.5 million provided to USDA to implement the industrial hemp program that Majority Leader McConnell (R-KY) made his top priority in the 2018 Farm Bill.

Sec. 124
This section deals with previous appropriations to assist Ukraine, essentially making the remaining funding available through the end of FY2020. However, a previous version of the CR went further and required that the assistance to Ukraine, “…shall be immediately apportioned as available for immediate obligation…and allotted within 60 days after the enactment of this joint resolution.” The House backed off the more directed language.

Sec. 129
This is new language regarding funding for the Office of Personnel Management (OPM) that is apparently crafted to keep the Administration from abolishing the organization.

Sec. 132
This language requires the Department of Homeland Security to pay whatever is necessary for protective activities of the Secret Service during the 2020 presidential campaign. Presidential candidates often get Secret Service protection even before being nominated if there are credible threats to their person, this would allow work to ramp up without cannibalizing other funding.

Sec. 134
Extends National Flood Insurance Authorization from current Sept 30, 2019 to November 21 and preemptively applies this extension retroactively, if the CR is enacted after Sept 30, 2019. It makes no reforms to the program.

Sec. 141
Extends the Export-Import bank’s authorization from Sept 30, 2019 to November 21, but makes no reforms.

Sec. 143
Regarding the Department of Transportation Transit Administration – Capital Investment Grants. This is a DOT grant program for bus rapid transit and rail (fact sheet). The CR changes the language from requiring funds be “obligated” to “allocated”

2018 Approps: $2,252,508,586 shall be obligated by December 31, 2019

2019 Approps: $2,169,783,950 shall be obligated by December 31, 2020

Sec. 144
This refers to the Mass Transit Account of the Highway Trust Fund. (26 USC 9503) Subsection (e)(4) refers to the process where the Secretary of DOT determines if unfunded authorizations exceed net receipts, there is reapportionment. (There’s a whole process). By saying this doesn’t apply, the CR would prevent any DOT reapportionment (i.e. reduction) of transit funds.