July Washington D.C. Preview

The House Appropriations Committee approved all 12 fiscal 2023 spending bills in the last two weeks of June, sending the measures to the House floor later this month. In this edition of the CEO Report, Pro policy teams break down what’s ahead in government spending.

— House appropriators are proposing a boost of more than 13 percent in education spending, but it falls short in key areas of Biden’s original budget request.   — The $27.5 billion discretionary spending package for the Agriculture Department and Food and Drug Administration goes big on programs for child nutrition and conservation.   — The Department of Labor is on track to receive a $1.8 billion funding boost above fiscal 2022 figures for agencies such as the Employment and Training Administration and OSHA.

AGRICULTURE Ag appropriations bill spends big on child nutrition, conservation: House appropriators approved a $27.5 billion discretionary spending package for the Agriculture Department and Food and Drug Administration — spending big on programs for child nutrition and conservation.   That’s a $2 billion increase from last year but falls slightly short of the White House’s request. In total, the package has a price tag of $195 billion — that includes mandatory spending on top of the discretionary funds.   The package funds the Special Supplemental Nutrition Program for Women, Infants and Children at $6 billion, and provides $28 billion for Child Nutrition Programs — which the committee says will provide about 5.6 billion school lunches and snacks.   It also includes over $1 billion for conservation operations, $560 million for rural broadband and $1.8 billion for the international assistance Food for Peace program.   The Supplemental Nutrition Assistance Program saw a significant cut from last year, providing more than $111 billion, a decrease from last year’s $140 billion appropriation. The figure also significantly undercuts the White House request of $138 billion. However, appropriators approved a $3 billion contingency fund and language for a “such sums” to be rolled out in the last quarter of 2023, should the funding fall short.   Next steps: House Democrats are hoping to consider most of the 12 annual funding bills on the floor in July. — Garrett Downs

EDUCATION Education spending on track for a boost: The U.S. education system is in line for a notable boost in federal spending. It just might not be as much as the White House wanted.   House Democrats have released a plan to increase education spending by more than 13 percent compared to current levels. The fiscal 2023 Labor-HHS-Education funding bill would provide $86.7 billion in discretionary funding for the Education Department, a $10.3 billion increase compared to the current year.   The total price is about $1.6 billion short of Biden’s original department budget request. House Democrats’ plan excludes some of the major increases to mandatory spending that the Biden administration had proposed as part of its goals to double the Pell Grant and triple funding to low-income school districts.   Low-income K-12 school districts would see $20.5 billion in funding, a $3 billion boost from the current level. The House spending plan also calls for increasing the maximum Pell Grant award, which the lowest-income college students receive, by $500 to total $7,395 for the 2023-24 school year.   Other tensions will unfold on this bill later this summer. Appropriators want to cut tens of millions of dollars from the government’s charter school grant program – setting up another potential Biden budget rejection as the Education Department finalizes a separate regulatory proposal to adjust how charters apply for that money, and restrict for-profit charter operators’ access to it. The bill would also expand federal student aid to undocumented students who are shielded from deportation by the Obama-era Deferred Action for Childhood Arrivals program or the Temporary Protected Status program. — Juan Perez Jr

TAX Give them the money: No big surprise here — a Congress controlled by Democrats wants to give the IRS a funding boost.   House appropriators approved a spending bill on June 24 that would increase the agency’s funding level by an even $1 billion, from $12.6 billion to $13.6 billion.   It’s quite possible, even likely, that the IRS doesn’t end up with that much funding if and when Congress strikes a bipartisan government funding deal. But the House spending bill does underscore how much of a priority a well-funded IRS is for Democrats.   Lawmakers gave the IRS a funding increase of $675 million for the current fiscal year, which amounted to its largest spending boost in two decades.   And that’s far from the only help that Democrats want to offer the IRS. Biden’s Build Back Better agenda had proposed giving tens of billions of dollars in new funding for the agency, largely to help the service increase its audit capabilities and squeeze more taxes out of wealthy people.   Those extra revenues could help pay for initiatives in areas like climate and health care, and some version of that proposal could survive if Democrats can agree to a slimmed-down fiscal measure.   In the meantime, House appropriators are pushing to funnel more money into tax enforcement themselves, as well as more funding for taxpayer services. The IRS historically has been bad about answering taxpayer calls during the filing season, but the agency’s ability to pick up the phone has reached record-low levels the last couple years.   It’s also quite possible, even likely, that appropriators won’t be quite as aggressive in giving the IRS new funding if Republicans pick up one or both chambers this fall.   But Democrats are also trying to prod the IRS to do a better job of showing what they’re doing with the extra money. The House committee report on the current funding bill that covers the IRS nudges the agency to show that it’s making progress in updating its notoriously behind-the-times technology and to provide guidance in key policy areas, like in the area of taxing cryptocurrencies. — Bernie Becker

CYBERSECURITY House lawmakers are pushing a significant increase for the government’s cybersecurity initiatives. Their homeland security appropriations bill proposes $2.9 billion for DHS’ Cybersecurity and Infrastructure Security Agency, which is $334 million higher than last year’s figure and $417 million higher than the Biden administration’s request for this year. The funding would include $45 million to help CISA implement a sweeping new cyber incident reporting mandate, with lawmakers directing CISA to report back within 60 days on whether it needs additional funds to enact the program. The House panel also proposed giving CISA more than the Biden administration requested for activities ranging from digital threat hunting to cyber education to threat intelligence services.   The Commerce-Justice-Science bill, which the committee passed on June 28, also boosts key cyber budgets. Lawmakers gave NIST $103 million for cybersecurity research, an $18 million increase over the previous year, and directed NIST to increase spending on its cyber education initiative by $5 million. They also provided the National Science Foundation with $74 million for its cybersecurity scholarship program, an $11 million increase.   In the financial services and general government bill, the House panel provided $22 million for the new Office of the National Cyber Director, which would be its first regular appropriations. The office, led by Director Chris Inglis, has been growing rapidly using funds included in the bipartisan infrastructure law. — Eric Geller

TECHNOLOGY A win for tv and radio broadcasters: House appropriators secured language in Federal Communications Commission funding that would provide legal reassurances to TV and radio broadcasters airing cannabis and CBD-related advertising. That’s a longtime priority for many of these broadcast companies, which hired lobbyists to focus on securing such language more than a year ago.   A push for parity: Broadcasters say they want the same treatment as other entities like newspapers, cable operators and satellite TV companies, which can freely air such cannabis ads. Although many states have relaxed restrictions around cannabis, it remains illegal on the federal level.   Some GOP discontent: During the full committee markup, Rep. Andy Harris (R-Md.) complained that the approps rider — which simply prevents the telecom agency from meddling with broadcast licenses for airing such ads — is too permissive. His attempt to impose health-related safeguards ultimately fell short, but the concerns could return as the appropriations legislation reaches the House floor this July. — John Hendel

ENERGY Make or break time for Democrats on climate: Democrats are facing their last possible window to pass a party-line clean energy and social spending package ahead of the August recess and midterm elections this fall.   The Supreme Court’s ruling Thursday restricting the executive branch’s ability to regulate carbon emissions warming the planet could reinvigorate Democratic efforts to pass a bill in July that would devote hundreds of billions of dollars for clean energy and electric vehicle tax incentives.   Momentum had already been picking up in recent weeks as Senate Majority Leader Chuck Schumer and Sen. Joe Manchin (D-W.Va.) have been holding quiet negotiating sessions to craft a compromise spending package.   Manchin killed Democrats’ attempt to pass the entirety of their broader Build Back Better agenda in December due to concerns it would worsen inflation. So, any compromise package would be narrower in scope and lower in cost — likely in the $1 trillion range — which could leave less spending for climate measures than the $550 billion originally envisioned.   But Democrats are desperate for a legislative win ahead of the midterms. And passing a reconciliation bill represents the party's only remaining shot at significant climate action if Republicans take control of at least one chamber of Congress as expected. — Josh Siegel

TRADE Trade agencies get funding boost in appropriations bill: House appropriators boosted funding for three critical trade agencies — the Office of the United States Trade Representative, International Trade Commission and International Trade Administration — as part of a nearly $86 billion spending bill.   The three agencies would receive a collective $76.2 million increase in funding under the House bill. Trade-related funding falls under the larger State-Foreign Operations appropriations bill.   USTR was allocated $60 million this year with an additional $15 million trade enforcement trust fund. $124,000 of that money is available for official reception and representation expenses. Their funding saw an increase of $4 million from last fiscal year.   The ITA, which enforces U.S. trade laws and engages in trade promotion activities, received $629.8 million meant to help create domestic jobs by expanding exports and fighting unfair trade practices. Within that funding, at least $16.4 million is earmarked for China anti-dumping cases and countervailing duty enforcement and compliance activities, while $3 million is set aside for a pilot fellowship program for minority students. Their overall funding saw an increase of $59.8 million.   The USITC, a quasi-judicial body that investigates injurious import proceedings and provides analysis on trade and tariffs, received $122.4 million, or a $12.4 million increase.   House Democrats will try to consider most of the annual funding bills next month, but both Senate and House appropriators are still working to come to an agreement on the next fiscal year’s funding, so proposed spending levels may look different in a final measure. — Marissa Martinez

HEALTH CARE Telehealth addiction regs after the pandemic: Thousands of patients who turn to online help for opioid addiction could soon lose access to services that rapidly expanded during the pandemic — even as opioid deaths reach record levels.   New startups boomed when regulations eased in 2020, allowing patients to see medical practitioners from their homes and skip the in-person visits normally required to get a prescription for buprenorphine, a drug used to treat opioid dependence. Even with doctors’ offices reopening, many patients prefer to seek care virtually rather than in-person treatment for a stigmatized disease. Recent studies show prescribing buprenorphine via telemedicine is at least as effective, and sometimes more effective, than prescribing in person in keeping patients on the medication.   But the federal regulations that have allowed practitioners the flexibility to prescribe buprenorphine after an audio or video appointment — and to patients outside their state — are due to expire along with the Covid-19 public health emergency as soon as October. Meanwhile, the Drug Enforcement Agency has sought to clamp down on buprenorphine’s misuse, but it has already missed deadlines to facilitate virtual access.   Telehealth abortion rules post-Roe decision: Now that the Supreme Court overturned Roe v. Wade , telehealth abortion will play a key role particularly in states where the procedure is restricted or banned.   The ruling creates a patchwork legal system across the country. Many people are expected to travel from states where the procedure is prohibited to ones where virtual visits from their cars or the delivery of abortion medication is legal. The court’s ruling is expected to open an expansive new legal frontier over telemedicine’s role in a fight that, despite the ruling, is far from settled.   Before the court’s ruling overturning Roe , 19 states had already banned the use of telehealth for abortion, according to the Guttmacher Institute, a research organization that supports abortion rights. More could do so with Roe’s fall, but it’s more likely they’ll just ban abortion altogether instead of restricting telemedicine abortion, Greer Donley, a law professor at the University of Pittsburgh, told POLITICO. If states ban or restrict abortion, telemedicine abortion would also be prohibited. — Krista Mahr and Ben Leonard