What’s in the Omnibus Appropriations Bill for Nonprofits?

 

 Money

No surprise, the Heritage Foundation, through its 501(c)(4) Heritage Action for America arm, has advised Congress to vote no on the omnibus FY2014 appropriations bill likely to be voted on today. FreedomWorks, another hard-right advocacy organization, reminded its allies that it was already on record against the Ryan-Murray budget agreement because it raised federal spending, and therefore would be unlikely to switch to supporting the omnibus appropriations bill that detailed how to spend the extra moneys.

If the “new” Heritage under former Senator Jim DeMint is steadfastly against the omnibus bill, there must be something worthwhile in the details, like providing services to poor people, extending unemployment benefits, or creating jobs, that might be of interest to nonprofits. That is part of the Heritage argument: The omnibus bill offers spending totals higher than the original House-only FY2014 budget—29 percent higher than what the House had offered to fund the departments of Labor, HHS (Health and Human Services), and Education, and 15 percent higher than what the House had proposed for Transportation and HUD (Housing and Urban Development). If that isn’t enough to drive Heritage and FreedomWorks over the edge, Heritage seems virtually apoplectic over allocations for Head Start and Early Head Start, the National Endowment for the Arts and the National Endowment for the Humanities, and, as to be expected, the implementation of the Affordable Care Act.

Yesterday, Congress passed a three-day continuing resolution to keep government open while Congress debates the details of the omnibus appropriations bill, starting right now. Whether or not Senator Harry Reid for the Senate and Speaker John Boehner for the House allow amendments from the floor, the vote will largely hinge on what’s in the omnibus bill as it is. Nonprofits will be mining the 1,582 pages of the Consolidated Appropriations Act of 2014 for nuggets and morsels for several months, hopefully discovering what’s really valuable in this document and not being swayed by the shiny pieces of fool’s gold. If nonprofits were evaluating the appropriations bill to find nonprofit-oriented nuggets, they might look for the following.

Big appropriations headlines

The federal discretionary budget in this bill will total $1.1 trillion for fiscal year 2014, though that extends back to October 1st of 2013 and will expire at the end of September in 2014. The totals spell out to $573 billion for the military (including overseas contingency spending, which camouflages a large number of Pentagon procurement plans) and $525 billion for all discretionary domestic spending. Taking into consideration what are now essentially retroactive expenditures incurred prior to the enactment of this bill, some agencies will find themselves dealing with a very tight final two or three quarters of the fiscal year.

  1. Head Start: In a big win for early childhood education advocates, the Head Start budget jumps by $1.025 billion to $8.6 billion, including $500 million for Early Head Start and $250 million for grants to preschool education programs. With half of the increase going to Early Head Start, mainly for children three years old and younger, this is a victory for Senate appropriations chair Barbara Mikulski, a former social worker and a longtime early childhood advocate. In his last State of the Union message, President Obama had pledged a major effort to step up early childhood education, essentially dismissing critics who believe that studies show that Head Start somehow doesn’t work. The House appropriators specifically denied funding for the president’s proposed “preschool development grants,” preferring to fund an existing program (Head Start, which predates the Obama administration), rather than give the president funding for a new initiative. With at least this item in the appropriations bill for one year, Congressional negotiators have carried through on the president’s proposal by increasing the funding for Head Start and Early Head Start—even if they won’t agree that it was really the president’s preschool funding proposal.
  2. Immigration: While the deportation-happy Obama administration—having deported more undocumented aliens than any administration ever—gets $2.8 billion for temporary detention beds for those awaiting deportation, the Department of Justice is still permitted, despite Republican calls for a rider, to challenge state immigration laws, like those in Arizona and Alabama, that go beyond the pale of federal rules. In the view of the Heritage Foundation, “DOJ will be able to continue its assault on states that are trying to help the federal government stem our illegal immigration crisis and sanctuary cities will be able to continue to defy federal law.” In the view of the majority of the appropriators, some states won’t be able to demarcate themselves as more hostile to immigrants than the rest of the country.
  3. Unpopular agencies: Republicans seem to have scored big victories against the agencies they dislike the most. The Internal Revenue Service gets pushed back to its 2009 funding level, and the Environmental Protection Agency falls to 20 percent less than it received five years ago. The IRS budget will be a whopping $526 million less than it was in 2013. To score a useless point, Republicans also added language that would prevent the IRS from spending any money “to target groups for regulatory scrutiny based on their ideological beliefs.” Prior to this appropriations bill, the IRS had lost 8,000 employees since 2010. These cuts promise additional weakening of the agency that at the federal level is—or should be—in the forefront of nonprofit sector oversight. Though nothing in the bill specifically removes the authorization for the IRS to carry out its regulatory and tax functions under the Affordable Care Act, its continuing staff and budget reductions could add up to an agency in managerial crisis as the year goes on.
  4. Democracy: Cities in the U.S., except those that are bankrupt and operating under court or state supervision, determine their own budgets. Not Washington, D.C., however. Not only is the nation’s capital taking a $2.2 million hit in the funding it receives from the federal government, the budget denies the District “budget autonomy.” In the absence of giving residents of D.C. a member of Congress with full voting rights, not to mention senators, the federal government is still requiring that D.C.’s municipal budget be overseen and approved by Congress. With a 2013 estimated population larger than Wyoming and Vermont, Washington, D.C. still lacks elements of the democratic rights afforded other citizens of the U.S.
  5. Pentagon: The big winner in this legislation is the military. Not only does the Ryan-Murray budget deal spare the Pentagon from a $20 billion sequestration cut, but the appropriations bill gives the Pentagon a number of go-aheads on military expenditures that will please some localities where defense contractors operate, but do little to advance the economy and nothing for world peace. It is no surprise, therefore, that because Senator Susan Collins (R-ME) was one of the chief Republican appropriations negotiators (and facing a potentially difficult reelection bid), the Bath Iron Works in Maine will benefit from $100 million to begin planning the construction of a new U.S. Navy destroyer. Similarly, Senator Jerry Moran (R-KS), also on the appropriations committee, got to announce $219 million in improvements at McConnell AFB in Wichita to accommodate new KC-46A tankers. The bill also calls for sending the Egyptian military junta $1.5 billion in military aid, supported by President Obama, despite the law’s clear injunction against military support after overthrows of elected governments, even one as dubious as Egypt’s government led by President Morsi. Other Pentagon procurements getting money are Northrup Grumman drone helicopters ($13 million), Boeing FA-18 jet fighters ($35.5 million), Lockheed Martin Hellfire missiles (over $78 million), and various Boeing helicopters ($528 million). Overall, despite withdrawals from Iraq and Afghanistan, the Pentagon budget actually increases, so that the U.S. can maintain a military budget larger than the next 14 largest military spending countries combined. And Guantanamo Bay stays open, as the bill bans funding for the construction or improvement of any facilities in the U.S. to accommodate Guantanamo terrorism detainees. Col. Nathan R. Jessup would be proud. The ultimate winners are the military contractors that occupy the top 10 spots of the largest federal contractors overall. Their lobbying muscle is quite evident in this bill.
  6. Disabled veterans: In the Ryan-Murray budget deal that reduced the cost-of-living increases on retired veterans’ benefits, the appropriations bill reversed the cuts on pensions for those veterans who retired because of injuries—in other words, exempting retired disabled veterans from the pension reductions. The cuts in other veterans pensions still stand, but could be reduced because of bipartisan support in both houses of Congress, or pursuant to the recommendations of the Military Compensation and Retirement Modification Commission, which is slated to report sometime in 2015, but may do so much sooner given Congressional attention to the pension issue.

Big domestic battles

So, score big wins for the Democrats on early childhood education, for Republicans on attacking the IRS and EPA, and both parties for their generally slavish devotion to the Pentagon. But some parts of the appropriations legislation are even more contentious and could be subject to surprise attacks by one side or the other as the legislation veers toward vote.

  1. Healthcare: It is difficult to spot what has Heritage and other conservatives so riled about spending for the Affordable Care Act, other than the fact that their hated health insurance legislation was not publicly guillotined. However, the appropriators agreed to provisions that make implementation much more difficult. For example, the budget reduces the Prevention and Public Health Fund by $1 billion, a program feared by Republicans as potentially helping implement the ACA. Oddly, this is the first time the Fund has received a specific appropriation since the ACA was enacted in 2010. Because of multiple attacks, resources from the Fund have been diverted in the past couple of years to pay for things such as the temporary “fix” in the Medicare physician payment formula and for promotional efforts regarding ACA enrollment. With this appropriations bill, especially in that it prohibits money from being used to support the health exchanges, the purpose of the fund, even with the reduction, should return to supplementing public health initiatives. In addition, the budget slashes $10 million from the ACA-created Independent Payment Advisory Board, set up to advise the executive branch on the implementation of the ACA, but famous because of the charges from Sarah Palin and others that it would be a bureaucratic “death panel.” Nonetheless, the Affordable Care Act takes a few hits, but survives for the moment. “There is nothing in the bill that blocks Obamacare,” Senator Barbara Mikulski (D-MD) said.
  2. School Vouchers: Congress may not let D.C. determine its own budget, but it will continue to use the District as its guinea pig for school privatization. Already the school district with the highest proportion of students attending charter schools, Speaker Boehner and House Majority Leader Eric Cantor (R-VA) got $16 million into the bill for student vouchers to pay for low-income D.C. students to attend private or religious schools. Apparently Del. Eleanor Holmes Norton, representing D.C., supports the vouchers and resents the efforts of her fellow Democrats to stand in the way of the District’s desire to allow families to send their kids to private schools on vouchers, but this isn’t local D.C. revenues, but federal revenues, that are at stake. Other privatization-focused districts could conceivably ask, with justification, if D.C. gets federal money for vouchers, why can’t they?
  3. Gun control: How does a federal appropriations bill affect gun control? One way is by blocking any U.S. funding for the United Nations Arms Trade Treaty unless passed by the Senate—an unlikely prospect, as it is opposed by Republicans and pro-gun Democrats. Republicans wanted to block requirements that gun sellers report multiple sales of rifles or shotguns to the same person, but that rider was fought off. Some additional money was put toward National Instant Criminal Background Checks; Republicans couldn’t admit this was a sensible move, so they ascribed the funding increase to “increased demand.”
  4. Campaign finance: Again, how might an appropriations bill come to grips with anything concerning campaign finance? In this case, by a rider that prohibits the government from requiring campaign contributions by federal contractors, an idea considered last year by the Obama administration.
  5. Reproductive rights: The Republicans also got to keep their riders preventing federal funding for abortions except in cases of rape, incest, or endangerment of a mother’s life and preventing coverage for abortion in Medicaid plans. In other words, while wealthier women will be able to get health insurance plans that provide for abortion coverage, poorer women who have to depend on Medicaid will be considered second-class citizens as a result of this rider, the longstanding Hyde Amendment. Even the Legal Services Corporations gets hit with restrictions on what it can do to represent clients in cases with abortion-related issues.
  6. Foreign aid: The tiny budget of the US Agency for International Development just got tinier. USAID’s operations budget lost $215 million from its 2013 level, now down to $1.3 billion, with a promise of “rigorous oversight of U.S. taxpayer dollars” by the USAID inspector general. In addition, the bill prohibits U.S. funding for assessed or voluntary contributions to the United Nations Educational, Scientific, and Cultural Organization (UNESCO), prohibits any funding or authority for debt relief, and maintains “pro-life,” “anti-abortion” riders in foreign aid, such as the Helms Amendment, which bans foreign aid funds being spent on abortions, and the Kemp-Kasten Amendment that bans funding for organizations that support “coercive abortion” and “involuntary sterilization.” In a reference to a specific country, the bill prohibits economic assistance to the Palestinian Authority if Palestine gets membership in the UN or with UN agencies, or if the Palestinian Authority pursues legal actions against Israel in the International Criminal Court. Nothing similar seems to apply to Israel for building new settlements in the West Bank and East Jerusalem, which many observers believe to be illegal.

Details tucked away

As nonprofits dig away at the appropriations text, they will find some hidden gems—or booby prizes, depending on one’s political perspective.

  1. Mental health: Mikulski may be credited for getting $115 million in mental health funding for the “Now Is the Time” violence prevention initiative. Presumably, “Now is the Time” reflects the mental health provisions in President Obama’s gun violence plan announced just about one year ago, including reaching and providing treatment for young people with mental illnesses earlier, providing mental health first aid training for teachers, and providing assistance to young adults, aged 16 to 25, at risk for mental health problems.
  2. Housing and community development: While the bill explicitly does not appropriate funds for HUD’s “sustainable,” “green,” or “livable” initiatives, which Republicans have all complained lacked legislative authorization, the appropriations bill did give a boost of $411 million to the Section 8 and public housing programs (reaching $26.3 billion, though $1.5 billion below President Obama’s request), including fully funding the President’s request for 10,000 new housing vouchers for veterans’ families ($75 million). Funding for other affordable housing programs in the HUD budget got $561 million in new appropriations for a total of $10.5 billion. Most surprising is that the Community Development Block Grant program, long a target of conservatives for elimination, survived at just over $3 billion, even receiving an increase of $82 million.
  3. CDFIs: The appropriators like community development financial institutions. Funding for the CDFI fund will increase by $5 million to $226 million in FY 2014 and the bond issuance authority of the CDFI Bond Program will rise by 50 percent to $750 million. This may reflect the fact that for all the sturm und drang in the commercial banking sector, CDFIs have continued to take on housing and small business loans in low-income neighborhoods and often outperform their commercial peers.
  4. Corporation for National and Community Service: Funding for AmeriCorps State and National fell to $335.8 million in the appropriations budget, down from $343.7 million in 2013, and AmeriCorps VISTA is down to $92.3 million from $94.6 million. But the appropriators increased funding for the Social Innovation Fund by 57 percent to $70 million, a figure that is nearly $22 million more than President Obama requested in his proposed budget.

There is obviously much more to report on in this mammoth omnibus spending bill that is taking the place of what would ordinarily be as many as 12 separate bills. Why are Heritage and FreedomWorks nonplussed with a compromise bill that has as many provisions that favor the conservatives as it does the liberals? With all the horse-trading evident in this bill that few members of Congress will fully read, much less digest, the conservatives have hardly had to deal with a return to a pre-recession, pre-sequestration level of government funding for social programs.

The biggest piece stuck in the conservatives’ craw—the Affordable Care Act—gets no new funds for implementation, much less expansion. Many social safety net programs still languish without sufficient resources to meet the needs of poor people in a society that’s ever more economically unequal. And the military-industrial complex looks as healthy as it ever has. It sounds like the conservatives in Congress won most of their issues in the appropriations process.

 

  • Michael Wyland

    One of the most bemusing lines in the bill is the following:

    “…to provide other services as authorized by 5 U.S.C. 3109, at such rates as may be determined by the Commissioner, $5,022,178,000, of which not less than $200,000 shall be for intensive training of employees in the Exempt Organizations Unit…” (page 457. lines 5-8).

  • Andrew K.

    I am very disappointed to see the Corporation for National and Community Service taking another hit. There are hundreds of thousands of American youths that apply for AmeriCorps positions that are turned away because the CNCS doesn’t have the budget to expand and create more openings. There is obviously huge support for the program; I don’t know why its budget is constantly jeopardized.
    I am also surprised to read about the state of the District of Columbia. That is an odd situation.

  • Rick Cohen

    Dear Andrew: Equally striking within the CNCS budget, though, are cuts in AmeriCorps programs such as VISTA but a large increase in the Social Innovation Fund. I don’t think that’s a good trade off. A dollar decrease in AmeriCorps VISTA is not made up by a dollar increase in the Social Innovation Fund. It seems that the message from nonprofits about what’s valuable in AmeriCorps or in CNCS more broadly has been a bit muddled.

  • Rick Cohen

    Thanks, Michael. I hope other readers will identify other pieces in the 1500+ page appropriations bill that they think are important for nonprofits to see and understand.

  • Michael Wyland

    I serve as a commissioner on my state’s CNCS commission. The information we’ve received from DC is that the news is OK for CNCS and especially good for CNCS state commissions. While overall CNCS funding is down from FY2010 levels and slightly lower than FY 2012/2013 levels, all categories save one are funded higher in FY14 than the post-sequester FY2013 levels. State commission funding will be *higher than the President’s recommendation* in FY2014 and higher than FY 2012/2013.

  • Michael Wyland

    My apologies for not specifying that the quoted passage in the bill addresses funding for the IRS. I spend too much time in the weeds – a reference to “exempt organizations” isn’t clear in isolation.