Summary Of the Consolidated Appropriations Act of 2016

12/18/2015

Background

Similar to recent years, the House and Senate were unable to agree on any appropriations bills before the 2016 federal fiscal year began on Oct. 1. To avoid a government shutdown, Congress passed a 10-week stopgap measure at the end of September that kept the government operating until Dec. 11, which was later extended. In late October, Congress and the administration reached an agreement which increased statutory budget caps for FYs 2016 and 2017. With a budgetary framework in place, Congress turned its attention to reaching a bipartisan agreement to finalize appropriations measures. 

So What’s in the Deal?

In the early hours of Wednesday, Dec. 16, congressional leaders released a FY 2016 omnibus spending bill that funds the federal government for the remainder of the fiscal year. Weighing in at more than 2,000 pages, the Consolidated Appropriations Act of 2016 (H.R. 2026) completes the appropriations process, providing new guidance and line-by-line funding levels for federal grants and programs.

The deal abides by the Bipartisan Budget Act enacted on Nov. 2, which adjusted total discretionary spending for FYs 2016 and 2017. This includes a $50 billion increase for the current fiscal year, split evenly between defense and nondefense spending. The FY 2016 budget totals $1.15 trillion, a 5 percent bump from FY 2015. Defense and nondefense discretionary spending are set at $548 billion and $518 billion, respectively.  

What’s Next?

Before adjourning for the holiday recess, the House and Senate passed the omnibus appropriations bill and the tax extenders package (see below) on Dec. 18 by votes of 316-113 and 65-33. It now awaits the president’s signature, with the administration having already signaled its support. The attention of federal appropriators will turn to the FY 2017 budget early next year. Speaker Paul Ryan (R-Wis.) and Senate Minority Leader Harry Reid (D-Nev.) are said to have an “understanding” on next year’s appropriations bills, and plan on normalizing the appropriations process without the threat of a filibuster.

Anything Else to Know?

As the omnibus agreement is the last significant legislation adopted this year, a number of controversial riders were considered, debated, and in some cases, included, in the final bill. Some of the more notable provisions contained in the omnibus are the removal of the 40-year ban on exporting crude oil and another strengthening visa rules. Riders that were deliberated but not incorporated in the soon to be signed bill include: undoing the Waters of the U.S. rule, assistance for Puerto Rico’s debt crisis, modifying language in Dodd-Frank and a provision halting Syrian refugees from gaining entry into the United States.

Spending Levels in the Consolidated Appropriations Act of 2016 (in billions)

 

FY 2016 omnibus

FY 2015 enacted

% increase

Agriculture

$21.75

$20.8

4.4%

Commerce-Justice-Science

$55.7

$50.1

11.2%

Defense

$514.1*

$490.2

4.9%

Energy-Water

$37.2

$34.2

8.8%

Financial Services

$23.2

$21.5

7.9%

Homeland Security

$41.1

$39.8

3.3%

Interior-Environment

$32.2

$30.5

5.6%

Labor-HHS-Education

$162.1

$156.7

3.4%

Legislative Branch

$4.4

$4.3

1.5%

Military Construction-VA

$80.0*

$72.2

10.8%

State-Foreign Operations

$52.7

$49.3

6.6%

Transportation-HUD

$57.6

$53.8

7.1%

* does not include additional funding for Overseas Contingency Operations

The Federal Funds Information for States (FFIS) has provided a comparison of FY 2016 discretionary and mandatory funding for select state-federal programs.

Protecting Americans From Tax Hikes Act of 2015 | Legislation Addressing Tax Extenders)

Running on a separate but parallel track to the omnibus was a tax package that addresses the annual question on “tax extenders.” Tax extenders refer to a package of more than 50 tax provisions that have historically received extensions each year, most of which have survived in limbo for the past decade. Targeted for both individuals and businesses, most tax extenders were designed to be temporary, provide a short-term efficiency, equity or simplicity to the federal tax code. But unlike in previous years, this version provides certainty for many of the tax provisions. A majority of the extenders were made permanent or received five-year extensions, with all other tax extenders receiving a two-year extension.

A significant provision for states is the deduction of state and local sales taxes. The deal struck between congressional leaders makes this provision permanent, which ensures federal neutrality on state tax structures. Other tax extenders that are now permanent fixtures in the federal tax code include: the research and experimentation tax credit, enhanced child tax and earned income tax credits, and increased levels of small business expensing.

The tax package, totaling $680 billion over 10 years, also adjusts two tax provisions affiliated with the Affordable Care Act, postponing the medical device tax for the next two years and delaying the “Cadillac tax” on high-cost employer-provided health plans until 2020.