Congress is rushing to pass a $1.7 trillion omnibus spending package: What is in and what is out?

Senate appropriators unveiled early Tuesday morning the compromise text of the $1.66 trillion FY23 spending omnibus package that Congress is rushing to pass to avoid a government shutdown Friday and fund the government through September. The 4,155-page "Consolidated Appropriations Act, 2023" is also the last piece of must-pass legislation on the docket of the 117th Congress and includes many policy riders affecting a wide range of industries.

The massive package was filed as a substitute amendment to H.R.2617 and includes a significant boost in defense spending requested by Republicans. It provides the military with $858 billion, an increase of $76 billion or about 10 percent over FY22, and $773 billion for non-defense spending, an increase of $43 billion or about 5.5 percent over FY22. Democrats say non-defense spending is closer to $798 billion when including certain mandatory funding for veterans' health care.

The next hurdle is working out the timeline for the passage of the package by the end of the week. On Tuesday evening, the Senate voted (70-25) to adopt the motion to proceed with the shell bill (H.R. 2617), but still must work out a time agreement and vote on the final passage of the bill. Senate Majority Leader Chuck Schumer (D-NY) wants to accelerate that timing and pass the bill Wednesday. If a time agreement can't be reached, regular order will push final passage to Friday, December 23, the same day the Continuing Resolution (CR) that is currently funding the government would expire.

Until there is a time agreement, any senator can halt the process. Republicans are likely to negotiate some amendment votes in exchange for speeding up the process.   It is being reported that there are up to nine amendments that are being discussed for possible votes.  The impending storm that is forecasted to cripple the Midwest during the holidays is also pressuring lawmakers to act quickly.  Furthermore, it unknown how the announced visit from Ukrainian President Volodymyr Zelensky—who will address a joint session of Congress Wednesday evening—will affect timing but it could possibly delay votes for another day. 

After passage in the upper chamber, the bill will move to the House of Representatives.  If Democrats are on the same page, where action to pass the bill is expected to be quick given their two-vote majority and Democrats ability to vote by proxy.

Below is an overview of some of the policy riders that made it into the spending plan and those that were not included:

What was included:

Ukraine aid: The package provides $45 billion in military and economic aid to Ukraine to repel Russian attacks, exceeding Biden's request for $37 billion. Notably, it was announced that Ukrainian President Volodymyr Zelensky will travel to Washington on Wednesday to address a joint session of Congress.

TikTok ban: The "No TikTok on Government Devices Act" legislation pushed by Sen. Josh Hawley (R- MO) would prohibit the download of the popular app on government devices. The Senate unanimously passed the bill last week. It comes at a time when many states have enacted similar TikTok bans on government devices, reflecting bipartisan concern about the Chinese-owned app and the extent of its reach in the U.S.

Digital Marketplaces: Includes the "INFORM Consumers Act," which would require digital marketplaces like Amazon to verify information from third-party vendors and disclose it to consumers. The bill is considered a watered-down version of the SHOP SAFE Act.

Boeing 737 relief: Includes an agreement to exempt the Boeing 737 MAX 7 and 10 that have not yet entered service from a certification deadline for redesigning cockpit safety systems. Instead, Boeing will be required to retrofit certain safety features as recommended by European and Canadian regulators.

Earlier end to COVID rules: Lawmakers earned savings for other healthcare provisions by including a bipartisan agreement to move up the conclusion of the COVID-era Medicaid policy by three months, concluding in April 2023 instead of July 2023.

Healthcare: The omnibus partially stayed scheduled Medicare physician fee schedule cuts, providing for an update of 2.5 percent in 2023 and 1.25 percent in 2024. The bill also extended the alternative payment model (APM) incentive payment for certain physician and hospital groups for an additional year at a rate of 3.5 percent. The language waives statutory Pay-As-You-Go (PAYGO) cuts to Medicare, and extends by two years many telehealth waivers instituted during the COVID-19 public health emergency (PHE), although the provision falls short of the push by some lawmakers to make the PHE flexibilities permanent. 

ARPA-H part of NIH: The new Advanced Research Projects Agency for Health will be part of the National Institutes of Health (NIH) settling a dispute over whether the agency should be independent.

Election reform: The inclusion of a bipartisan deal to reform the 1887 Electoral Count Act will amend how the Electoral College is processed and certified by Congress, and clarify that the vice president cannot overturn the election results when Congress counts the Electoral College votes.

Retirement savings: The only tax legislation included in the package is a boost to retirement savings in tax-advantaged accounts. It requires automatic enrollment in workplace savings plans, expands a tax credit for low-income savers, allows more catch-up contributions for workers nearing retirement, and includes other provisions to increase retirement savings.

Conservation easements: Another tax provision included in the larger spending bill is a measure aimed at curbing fraudulent tax shelters that result from the abuse of syndicated conservation easements.

FBI HQ compromise: The dispute between the states of Maryland and Virginia over the future location of the FBI headquarters was so contentious that the release of the omnibus text was delayed Monday night. Democratic lawmakers compromised agreeing to direct the federal government to meet with representatives from both states to hear their ideas before making a final decision on the building's location.

Disaster relief: The bill includes $40 billion in funding to assist communities across the country recover from natural disasters, drought, hurricanes, floods, wildfires, and other matters.

Increased security for senators and former speakers: In light of increased threats against sitting members of Congress and the recent attack on House Speaker Nancy Pelosi's husband, $2.5 million is provided for a "residential security system program" for senators. It also directs the Capitol Police to determine whether to extend protective details for former House speakers for a year, possibly longer, after they leave office.

Cosmetics regulations: Lawmakers overhauled the U.S. cosmetics regulations for the first time since the 1930s.

Lobster exemption: Maine lawmakers successfully pushed through a six-year delay of new regulations designed to prevent fishing gear from injuring and killing endangered whales, but would have destroyed the state's lobster industry.

Military athletes can turn pro: Rolls back a provision requiring student athletes from military service academies to perform two years of active duty service before they can receive a waiver to play professional sports.

Increased NLRB funding: Increases funding for the National Labor Relations Board to $299 million. The $25 million increase is the first time legislators raised funding in nearly a decade.

What is not included:

Popular tax provisions weren't included: Although many lawmakers held out hope until the very end, the package does not include many popular tax extenders, including the enhanced Child Tax Credit (CTC), which was a Democratic priority. Also not included are tax provisions that met with widespread support, such as R&D expensing that would allow businesses to write off their research expenses immediately, rather than over a five-year period. Also missing are tax provisions meant to address changes by the "Tax Cuts and Jobs Act" (TCJA), such as undoing the amortization requirement under Section 174, business relief from a higher interest deductibility limit, that moved to 30 percent of earnings before interest and taxes (EBIT) this year, and delaying the 100 percent bonus depreciation phaseout which drops to 80 percent in 2023. No mention is made of raising the 1099-K reporting threshold requirement from $600 and low-income housing development, "last in, first out" (LIFO), and deductions for federal broadband grant recipients.

Pandemic aid: Biden had asked for $9 billion to fight the COVID pandemic and meet emerging needs, but Congress did not add to past funding legislation in the omnibus.

Cannabis banking legislation: The bipartisan "SAFE Banking Act", which would give the cannabis industry increased access to financial services, remains on the cutting room floor due to opposition from Senate Minority Leader Mitch McConnell.

Debt limit: With time running out, Democrats have apparently decided to table the issue of raising the debt limit until the 118th Congress. Republicans, who take control of the House on Jan. 3, will have to address this issue, which is sure to lead to a contentious showdown between the parties.

Energy permitting reforms: Senator Joe Manchin (D-WV) failed in his attempts to attach his package to overhaul permitting policy to expedite energy projects to the National Defense Authorization Act (NDAA) or the annual spending bill

Tech antitrust provisions: McConnell and other high-profile senators objected to the inclusion of the "Open App Markets Act," which passed out of committee. The legislation aims to promote competition and reduce costs for consumers in the app market. Also not included was Sen. Amy Klobuchar's (D-MN) American Innovation and Choice Online Act would make it illegal for large online platforms to engage in a variety of anti-competitive practices.

Support for workers: The "Pregnant Workers Fairness Act," legislation that would expand protections for pregnant workers, was left out of the bill despite strong support from business, civic, and religious groups.

Drug sentencing disparities: A last-ditch effort to include a bipartisan agreement to narrow the sentencing disparities between crack and powder cocaine was excluded after Attorney General Merrick Garland last week directed federal prosecutors to eliminate sentencing disparities through their charging decisions.

Below are links individual committee summaries of the omnibus package. 
•    Topline summary of all 12 bills (link)
•    Agriculture (bill summary)
•    Commerce, Justice, Science, and Related Agencies (bill summary)
•    Defense (bill summary)
•    Energy and Water Development (bill summary)
•    Financial Services and General Government (bill summary)
•    Homeland Security (bill summary)
•    Interior, Environment, and Related Agencies (bill summary)
•    Labor, Health and Human Services, Education, and Related Agencies (bill summary)
•    Legislative Branch (bill summary)
•    Military Construction, Veterans Affairs, and Related Agencies (bill summary)
•    State, Foreign Operations, and Related Programs (bill summary)
•    Transportation, Housing and Urban Development, and Related Agencies (bill summary)



Authored by Shelley Castle.


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