FY 2019 Budget “Minibuses” – GovWin FMA’s First Take

With just a few weeks before the beginning of the new fiscal year appropriators are busy putting the finishing touches on spending bills that would take the specter of a partial government shutdown off the table. The GovWin Federal Market Analysis (FMA) team is looking at these bills to see what is noteworthy.

“Minibus” Approach

Rather than taking the common legislative approach of recent years of one or more Continuing Resolutions (CR) that take us well into the next fiscal year followed by a government-wide Omnibus for the remainder of the year, leaders in this Congress are moving forward three “minibus” appropriations bills that provide full-year funding for most agencies and sustaining operational funds for others.

The scope and current status of these three bills are below:

• Minibus #1 – HR 5895: Military Construction/VA, Energy, Legislative – Passed Congress, awaiting President’s signature
• Minibus #2 – HR 6157: Defense, Labor, HHS, Education – Passed Conference, awaiting full House/Senate votes; Contains CR funds for DHS, Commerce, Justice, Science, State and Foreign Operations
• Minibus#3 – HR 6147: Interior/Environment, Financial Services, Agriculture, Transportation and HUD – In Conference.

The two bills that have passed final versions through their joint House-Senate Conference Committees contain total appropriations for more than a half-dozen major departments and areas. (See table below.) We will address some relevant funding provisions in these first two bills for the major departments and areas. (Look for a future article when HR 6147 is finalized.)

 

Minibus #1 (HR 5895) – Military Construction/VA, Energy, Legislative

Veterans Affairs

Minibus #1 (HR 5895) provides $208.8B in both discretionary and mandatory funding for VA, an increase of $12.1B above the FY 2018 level. VA discretionary funding totals $86.5B, an increase of $5B above FY 2018, and the highest amount the VA has ever received. Approximately $70.7B of this discretionary total was provided last year via advance funding in the FY 2018 appropriations bill.

Funding highlights include:

• Funds VA medical care at $72.3B, providing for approximately seven million patients to be treated in FY 2019. This total includes $8.6B for mental health care services, $589M for traumatic brain injury treatment and $7.5B in homeless veterans’ treatment, services, housing, and job training.
• Contains a $1.75B increase in additional discretionary funding for the VA MISSION Act to support ongoing health care programs. 
• Provides $1.1B for the new VA electronic health record system.
• Provides $46M above the FY 2018 level for VBA to reduce the disability claims processing backlog. The funding is to be used for hiring additional claims staff, digital scanning of health records, and overtime pay.
• Funds major and minor construction within the VA at $1.8B. In addition, $2B is allotted for infrastructure repair.

Energy

Minibus #1 (HR 5895) provides funds for the Department of Energy’s energy programs, the National Nuclear Security Administration and other environmental cleanup and defense activities.

Funding highlights include:

• Funds the new Cybersecurity, Energy Security and Emergency Response account with $120M for energy sector cybersecurity and emergency response activities.
• Contains $6.5B for the purchase, construction and acquisition of plants and capital equipment to carry out related science activities under the Office of Science.
• Provides $366M to the Advanced Research Projects Agency-Energy, despite the FY 2019 budget request to eliminate the program.
• Supports atomic energy defense activities with $11.1B for the National Nuclear Security Administration.
• Allocates $1.8B for Naval Nuclear Reactors.

Interior (Bureau of Reclamation)

Minibus #1 (HR 5895) allocates $1.6B under its Water provisions to the Department of Interior’s Bureau of Reclamation, an increase of $85M above the FY 2018 enacted level.

Funding highlights include:

• Appropriates $15M for activities carried out under the Central Utah Project Completion Act.
• Provides $1.4B to the Bureau of Reclamation for the restoration of water and other related natural resources.
• Allocates $62M for activities under the Central Valley Project Restoration Fund, $35M for the California Bay-Delta Restoration Fund and $61M for administrative functions at the Bureau of Reclamation.

 

Minibus #2 (HR 6157) – Defense, Labor, HHS, Education

Department of Defense

Minibus #2 (HR 6157) provides $674.4B in total discretionary budget for the Department of Defense (DoD), $606.5B in base funding and $67.9B for Overseas Contingency Operations (OCO). The base budget amount is an increase of $17.1B above the FY 2018 enacted level and aligns with previously passed budget agreements and the FY 2019 National Defense Authorization Act (NDAA).

Funding highlights include:

• Provides $56.1B, $35.6B and $46.8B in base funding for Military Personnel for the Army, Air Force and Navy/Marine Corps respectively.
• Allocates $50.0B, $50.0B, 55.9B, $66.6B in base funding for Operations and Maintenance (O&M) for the Army, Air Force, Navy/Marine Corps and Defense Agencies respectively.
• Apportions $22.0B, $44.4B, $60.7B and $7.7B for Procurement for the Army, Air Force, Navy/Marine Corps and Defense Agencies respectively.
• Allots $11.1B, $41.2B, $18.5B and $25.9B for Research, Development, Test and Evaluation (RDT&E) for the Army, Air Force, Navy/Marine Corps and Defense Agencies respectively.
• Appropriates $27.0B, $17.7B, $7.9B and $9.1B in Oversees Contingency Operations (OCO) funding for the Army, Air Force, Navy/Marine Corps and Defense Agencies respectively.
• Assigns $250M for the Defense Rapid Innovation Program.
• Allocates $1.6B and $15.2M for the Defense Working Capital Fund – base funding and OCO respectively.
• Provides $34.0B and $352.1M for the Defense Health Program – base funding and OCO respectively.

Other DoD Technology-related Provisions

• Supercomputers – No funds may be used to purchase supercomputers which are not manufactured in the U.S. unless the Secretary of Defense certifies it is needed for national security purposes is not available from U.S. manufacturers. (Sec. 8049)
• DoD Cloud – No funds may be used to migrate to the proposed Joint Enterprise Defense Infrastructure (JEDI) or the Defense Enterprise Office Solutions (DEOS) cloud until 90 days after the Secretary submits plans for a budget accounting system for all DoD cloud-related services and migration efforts and submits a detailed description of the DoD’s enterprise cloud strategy addressing implementation, acquisition, innovation and security threat assessment and mitigation. (Sec. 8137)

Labor

Minibus #2 (HR 6157) provides a total of $12.1B in discretionary appropriations for the Department of Labor, $94.3M below the FY 2018 enacted level.

Funding highlights include:

• Provides the Employment Training Administration (ETA) with $9.9B, which includes $2.8B for job training grants, $89.5M for YouthBuild, and $790M in mandatory appropriations for Federal Unemployment Benefits and Allowances.
• Funds the Job Corps at $1.7B, which maintains the same funding as FY 2018.
• Supports the Veterans Employment and Training Service (VETS) with $300M, a $5M increase over FY 2018.

Health and Human Services

Minibus #2 (HR 6157) provides a total of $90.5B for HHS, an increase of $2.3B above last year’s enacted level.

Funding highlights include:

• Provides $39.1B in funding for NIH, an increase of $2B above the FY 2018 enacted level. Funding includes $2.34B for Alzheimer’s disease research, $400M for the Cancer Moonshot research initiative, $429M for the Brain Research through Application of Innovative Neurotechnologies (BRAIN) initiative, and $376M for the All of Us research initiative.
• Funds CDC at $7.9B, a $354M decrease over FY 2018.
• Provides $5.7B to fund SAMHSA, $548M above FY 2018.
• Supports HRSA with $6.8B.
• Provides $23.2B for the Administration for Children and Families (ACF) to support early childhood programs, preschool development grants, and community services block grants.

Education

Minibus #2 (HR 6157) provides $71.5B for the Department of Education, which is $581M above the FY 2018 enacted level.

Funding highlights include:

• Funds IDEA special education grants to states at nearly $12.4B.
• Includes $1.17B for grants that provide flexible funds to states and school districts to expand access, improve school conditions, and increase the use of technology.
• Provides $1.9B for career, technical and adult education programs to ensure that all students have the opportunity to continue to develop their skills after high school and enter into good-paying jobs.

Social Security Administration

Minibus #2 (HR 6157) provides $12.9B for SSA for FY 2019, which is $2M above the FY 2018 enacted level.

Funding highlights include:

• Allocates $45M for information technology modernization, including related hardware and software infrastructure and equipment

Other Technology-related Provisions

• Supply Chain Risk Management – Sustained restrictions on certain foreign-made components and systems. Under General Provisions - Limitation on Telecommunications Equipment Procurement (Sec. 208) no funds may be used to acquire telecommunications equipment produced by Huawei or ZTE, or for a high- or moderate-impact information system (as defined by NIST), without a risk review against NIST criteria and known threat information from the FBI as well as a cyber-risk assessment on component or systems from China, Iran, North Korea or Russia. Moving forward with any such acquisitions also requires a formal risk mitigation strategy, be in the vital national security interest and be reported to Congress.

The third minibus – HR 6147 covers Interior/Environment, Financial Services, Agriculture, Transportation and HUD. As of this writing HR 6147 is in Conference Committee still being reconciled and finalized so that the House and Senate may vote to approve the final appropriations. We are closely watching the progress on this bill and will post our analysis of relevant findings once the final Conference Report is published. Please stay tuned.