Labor, Health and Human Services, and Education: FY2017 Appropriations

Contents

• Introduction
• Report Roadmap and Useful Terminology
• Scope of the Report
• Important Budget Concepts
• Mandatory vs. Discretionary Budget Authority
• Total Budget Authority Provided in the Bill vs. Total Budget Authority Available in the Fiscal Year
• FY2017 LHHS Appropriations Status
• FY2017 Continuing Resolutions
• Congressional Action on a Stand-Alone LHHS Bill
• FY2017 LHHS Action in the House
• FY2017 LHHS Action in the Senate
• FY2017 President's Budget Request
• Conclusion of the FY2016 Appropriations Process
• Summary of FY2017 LHHS Appropriations
• Department of Labor (DOL)
• About DOL
• FY2017 DOL Appropriations Overview
• Selected DOL Highlights
• Employment and Training Administration (ETA)
• Wage and Hour Division (WHD)
• Bureau of International Labor Affairs (ILAB)
• Labor-Related General Provisions
• Department of Health and Human Services (HHS)
• About HHS
• FY2017 HHS Appropriations Overview
• Special Public Health Funding Mechanisms
• Public Health Service Evaluation Tap
• Prevention and Public Health Fund
• Selected HHS Highlights by Agency
• HRSA
• CDC
• NIH
• SAMHSA
• AHRQ
• CMS
• ACF
• ACL
• Funding Restrictions Related to Certain Controversial Issues
• Department of Education (ED)
• About ED
• FY2017 ED Appropriations Overview
• Selected ED Highlights
• Education for the Disadvantaged
• Student Support and Academic Enrichment State Grants (School Improvement Programs)
• Special Education
• Pell Grants (Student Financial Assistance)
• Related Agencies
• FY2017 Related Agencies Appropriations Overview
• Selected Related Agencies Highlights
• SSA Limitation on Administrative Expenses (LAE)
• National Labor Relations Board (NLRB)

Summary

This report provides an overview of actions taken by Congress and the President to provide FY2017 appropriations for accounts funded by the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS) appropriations bill. This bill provides funding for all accounts funded through the annual appropriations process at the Departments of Labor (DOL) and Education (ED). It provides annual appropriations for most agencies within the Department of Health and Human Services (HHS), with certain exceptions (e.g., the Food and Drug Administration is funded via the Agriculture bill). The LHHS bill also provides funds for more than a dozen related agencies, including the Social Security Administration (SSA).

As of the date of this report, FY2017 annual appropriations for LHHS have not been enacted into law. The House and Senate appropriations committees have reported their respective versions of the LHHS bill to their parent chambers, but neither of these bills has received floor consideration.

FY2017 Continuing Resolutions: Temporary FY2017 funding for LHHS has been provided by two continuing resolutions (CRs):

The most recent FY2017 CR was enacted on December 10, 2016 (Division A, H.R. 2028; P.L. 114-254). With limited exceptions, this FY2017 CR generally funds discretionary LHHS programs through April 28, 2017, at FY2016 levels minus a reduction of about one-fifth of one percent (-0.1901%).

• Previously, funding had been provided under the first FY2017 CR, which was enacted on September 29, 2016 (H.R. 5325, Division C; P.L. 114-223). With limited exceptions, this first FY2017 CR generally funded discretionary LHHS programs through December 9, 2016, at FY2016 levels minus a reduction of about one-half of one percent (-0.496%).

FY2017 House LHHS Action: The House Appropriations Committee's version of the FY2017 LHHS appropriations bill was ordered reported by the full committee on July 14, 2016, by a vote of 31-19, and reported to the House on July 22, 2016 (H.R. 5926). This bill would provide $170.2 billion in discretionary LHHS funds, the same amount as FY2016. This amount is 1.3% less than the FY2017 President's request. In addition, the House committee bill would provide an estimated $760.6 billion in mandatory funding, for a combined total of $930.9 billion for LHHS as a whole. The distribution of discretionary funding is as follows:

• DOL: $11.8 billion, 2.8% less than FY2016.
• HHS: $77.2 billion, 2.3% more than FY2016.
• ED: $67.0 billion, 1.6% less than FY2016.
• Related Agencies: $14.2 billion, 2.5% less than FY2016.

FY2017 Senate LHHS Action: The Senate Appropriations Committee reported its version of the FY2017 LHHS appropriations bill on June 9, 2016 (S. 3040) by a vote of 29-1. This bill would provide $171.6 billion in discretionary LHHS funds. This is 0.8% more than FY2016, and 0.5% less than the FY2017 President's request. In addition, the Senate committee bill would provide an estimated $760.6 billion in mandatory funding, for a combined total of $932.2 billion for LHHS as a whole. The distribution of discretionary funding is as follows:

• DOL: $12.0 billion, 1.1% less than FY2016.
• HHS: $76.8 billion, 1.9% more than FY2016.
• ED: $67.8 billion, 0.3% less than FY2016.
• Related Agencies: $14.9 billion, 1.8% more than FY2016.

FY2017 President's Budget Request: On February 9, 2016, the Obama Administration released the FY2017 President's budget. The President requested $172.5 billion in discretionary funding for accounts funded by the LHHS bill, which is an increase of 1.3% from FY2016 levels. In addition, the President requested $760.6 billion in annually appropriated mandatory funding, for a total of $933.1 billion for the LHHS bill as a whole. The distribution of discretionary funding is as follows:

• DOL: $12.8 billion, 5.2% more than FY2016.
• HHS: $74.7 billion, 0.9% less than FY2016.
• ED: $69.4 billion, 2.0% more than FY2016.
• Related Agencies: $15.6 billion, 6.4% more than FY2016.

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Labor, Health and Human Services, and Education: FY2017 Appropriations

Introduction

This report provides an overview of FY2017 appropriations actions for accounts traditionally funded in the appropriations bill for the Departments of Labor, Health and Human Services, and Education, and Related Agencies (LHHS). This bill provides discretionary and mandatory appropriations to three federal departments: the Department of Labor (DOL), the Department of Health and Human Services (HHS), and the Department of Education (ED). In addition, the bill provides annual appropriations for more than a dozen related agencies, including the Social Security Administration (SSA).

Discretionary funds represent less than one-quarter of the total funds appropriated in the LHHS bill. Nevertheless, the LHHS bill is typically the largest single source of discretionary funds for domestic non-defense federal programs among the various appropriations bills (the Department of Defense bill is the largest source of discretionary funds among all federal programs). The bulk of this report is focused on discretionary appropriations because these funds receive the most attention during the appropriations process.

The LHHS bill typically is one of the more controversial of the regular appropriations bills because of the size of its funding total and the scope of its programs, as well as various related policy issues addressed in the bill such as restrictions on the use of federal funds for abortion and for research on human embryos and stem cells.

See the Key Policy Staff table at the end of this report for information on which analysts to contact at the Congressional Research Service with questions on specific agencies and programs funded in the LHHS bill.

Report Roadmap and Useful Terminology

This report is divided into several sections. The opening section provides an explanation of the scope of the LHHS bill (and hence, the scope of this report), and an introduction to important terminology and concepts that carry throughout the report. Next is a series of sections describing major congressional actions on FY2017 appropriations and (for context) a review of the conclusion of the FY2016 appropriations process. This is followed by a high-level summary and analysis of proposed appropriations for FY2017, compared to FY2016 funding levels. The body of the report concludes with overview sections for each of the major titles of the bill: DOL, HHS, ED, and Related Agencies. These sections provide selected highlights from FY2017 proposed funding levels, compared to FY2016 funding levels.

Finally, an Appendix provides a summary of budget enforcement activities for FY2017. This includes information on the Budget Control Act of 2011 (BCA; P.L. 112-25) and sequestration, as well as current-year efforts related to the budget resolution, subcommittee spending allocations, and the House and Senate committee-reported versions of the FY2017 LHHS appropriations bill.

Scope of the Report

This report is focused strictly on appropriations to agencies and accounts that are subject to the jurisdiction of the Labor, Health and Human Services, Education, and Related Agencies subcommittees of the House and Senate appropriations committees (i.e., accounts traditionally funded via the LHHS bill). Department "totals" provided in this report do not include funding for accounts or agencies that are traditionally funded by appropriations bills under the jurisdiction of other subcommittees.

The LHHS bill provides appropriations for the following federal departments and agencies:

• the Department of Labor;
• most agencies at the Department of Health and Human Services, except for the Food and Drug Administration (funded through the Agriculture appropriations bill), the Indian Health Service (funded through the Interior-Environment appropriations bill), and the Agency for Toxic Substances and Disease Registry (also funded through the Interior-Environment appropriations bill);
• the Department of Education; and
• more than a dozen related agencies, including the Social Security Administration, the Corporation for National and Community Service, the Corporation for Public Broadcasting, the Institute of Museum and Library Services, the National Labor Relations Board, and the Railroad Retirement Board.

Note also that funding totals displayed in this report do not reflect amounts provided outside of the annual appropriations process. Certain direct spending programs, such as Old-Age, Survivors, and Disability Insurance and parts of Medicare, receive funding directly from their authorizing statutes; such funds are not reflected in the totals provided in this report because they are not provided through the annual appropriations process (see related discussion in the "Important Budget Concepts" section).

Important Budget Concepts

Mandatory vs. Discretionary Budget Authority¹

The LHHS bill includes both discretionary and mandatory budget authority. While all discretionary spending is subject to the annual appropriations process, only a portion of mandatory spending is provided in appropriations measures.

Mandatory programs funded through the annual appropriations process are commonly referred to as appropriated entitlements. In general, appropriators have little control over the amounts provided for appropriated entitlements; rather, the authorizing statute controls the program parameters (e.g., eligibility rules, benefit levels) that entitle certain recipients to payments. If Congress does not appropriate the money necessary to meet these commitments, entitled recipients (e.g., individuals, states, or other entities) may have legal recourse.²

Most mandatory spending is not provided through the annual appropriations process, but rather through budget authority provided by the program's authorizing statute (e.g., Old-Age, Survivors, and Disability Insurance). The funding amounts in this report do not include budget authority provided outside of the appropriations process. Instead, the amounts reflect only those funds, discretionary and mandatory, that are provided through appropriations acts.

Note that, as displayed in this report, mandatory amounts for the President's budget submission reflect current-law (or current services) estimates; they generally do not include the President's proposed changes to a mandatory spending program's authorizing statute that might affect total spending. (In general, such proposals are excluded from this report, as they typically would be enacted in authorizing legislation.)

Note also that the report focuses most closely on discretionary funding. This is because discretionary funding receives the bulk of attention during the appropriations process. (As noted earlier, although the LHHS bill includes more mandatory funding than discretionary funding, the appropriators generally have less flexibility in adjusting mandatory funding levels than discretionary funding levels.)

Mandatory and discretionary spending is subject to budget enforcement processes that include sequestration. In general, sequestration involves largely across-the-board reductions that are made to certain categories of discretionary or mandatory spending. However, the conditions that trigger sequestration, and how it is carried out, differ for each type of spending. This is discussed further in the Appendix to this report.

Total Budget Authority Provided in the Bill vs. Total Budget Authority Available in the Fiscal Year

Budget authority is the amount of money a federal agency is legally authorized to commit or spend. Appropriations bills may include budget authority that becomes available in the current fiscal year, in future fiscal years, or some combination. Amounts that become available in future fiscal years are typically referred to as advance appropriations.

Unless otherwise specified, appropriations levels displayed in this report refer to the total amount of budget authority provided in an appropriations bill (i.e., "total in the bill"), regardless of the year in which the funding becomes available.³ In some cases, the report breaks out "current-year" appropriations (i.e., the amount of budget authority available for obligation in a given fiscal year, regardless of the year in which it was first appropriated).⁴

As the annual appropriations process unfolds, the amount of current-year budget authority is measured against 302(b) allocation ceilings (budget enforcement caps for appropriations subcommittees that traditionally emerge following the budget resolution process). The process of measuring appropriations against these spending ceilings takes into account scorekeeping adjustments, which are made by the Congressional Budget Office (CBO) to reflect conventions and special instructions of Congress.⁵ Unless otherwise specified, appropriations levels displayed in this report do not reflect additional scorekeeping adjustments.

FY2017 LHHS Appropriations Status

Table 1 provides a timeline of major legislative actions, and the remainder of this section provides additional detail on these and other steps, toward full-year FY2017 LHHS appropriations.

FY2017 Continuing Resolutions

Full-year appropriations were not enacted by the start of FY2017 (October 1, 2016). As a consequence, temporary funding for LHHS has been provided by two CRs.

The most recent of the FY2017 CRs was enacted on December 10, 2017 (P.L. 114-254, Division A). This second FY2017 CR provides continuing LHHS appropriations through April 28, 2017. It generally funds discretionary LHHS programs at FY2016 levels, minus an across-the-board reduction of about one-fifth of one percent (-0.1901%). Mandatory programs covered by the CR are generally continued at current law levels, less sequestration (where applicable). This CR extends all of the provisions from the first FY2017 CR, including special provisions for LHHS programs. In addition, the second FY2017 CR includes a number of new provisions affecting LHHS programs, which are carried in Sections 168-174, Sections 194-195, and Sections 198-201. For more information about the second FY2017 CR, CRS Report R44723, Overview of Further Continuing Appropriations for FY2017 (H.R. 2028), coordinated by [author name scrubbed].

Prior to the enactment of the second FY2017 CR, temporary LHHS funding had been provided under an earlier CR. This first FY2017 CR was enacted on September 29, 2016 (H.R. 5325, Division C; P.L. 114-223). With limited exceptions, the CR generally funded discretionary LHHS programs through December 9, 2016, at FY2016 levels minus a reduction. However, instead of the across-the-board reduction of 0.1901% (per the second FY2017 CR), the reduction in this first CR was about one-half of one percent (-0.496%). Mandatory programs covered by the CR are generally continued at current-law levels, less sequestration (where applicable). Provisions specifically affecting LHHS programs are carried in Sections 116 and 138-141. For more information about the first FY2017 CR, see CRS Report R44653, Overview of Continuing Appropriations for FY2017 (H.R. 5325), coordinated by [author name scrubbed].

Congressional Action on a Stand-Alone LHHS Bill

FY2017 LHHS Action in the House

The House Appropriations Committee's version of the FY2017 LHHS appropriations bill was ordered reported by the full committee on July 14, 2016, by a vote of 31-19, and reported to the House on July 22, 2016. It was previously approved in subcommittee on July 7 by a voice vote.

As reported by the full committee, this bill would provide $170.2 billion in discretionary LHHS funds, the same amount as FY2016. This amount is 1.3% less than the FY2017 President's request. In addition, the House committee bill would provide an estimated $760.6 billion in mandatory funding, for a combined total of $930.9 billion for LHHS as a whole.

FY2017 LHHS Action in the Senate

The Senate Appropriations Committee reported its version of the FY2017 LHHS appropriations bill on June 9, 2016 (S. 3040) by a vote of 29-1. The LHHS subcommittee had previously reported the bill on June 7 by a voice vote.

As reported by the full committee, this bill would provide $171.6 billion in discretionary LHHS funds. This is 0.8% more than FY2016, and 0.5% less than the FY2017 President's request. In addition, the bill would provide an estimated $760.6 billion in mandatory funding, for a combined total of $932.2 billion for LHHS as a whole.

See Figure 1 for the breakdown of discretionary and mandatory LHHS appropriations in the FY2017 Senate committee bill.⁶

Figure 1. FY2017 Senate Committee-Reported LHHS Appropriations Bill

Source: Amounts for the FY2017 Senate Appropriations Committee-reported LHHS bill (S. 3040) are generally based on data in S.Rept. 114-274. For consistency with source materials, amounts in this CRS report generally do not reflect mandatory spending sequestration. Notes: Details may not add to totals due to rounding. Amounts in this figure (1) reflect all budget authority appropriated in the bill, regardless of the year in which funds become available (i.e., totals do not include advances from prior-year appropriations, but do include advances for subsequent years provided in this bill); (2) have generally not been adjusted to reflect scorekeeping; (3) comprise only those funds provided for agencies and accounts subject to the jurisdiction of the LHHS subcommittees of the House and Senate appropriations committees; and (4) do not include appropriations that occur outside of appropriations bills.

FY2017 President's Budget Request

On February 9, 2016, the Obama Administration released the FY2017 President's budget. The President requested $172.5 billion in discretionary funding for accounts funded by the LHHS bill, which is an increase of 1.3% from FY2016 levels. In addition, the President requested roughly $760.6 billion in annually appropriated mandatory funding, for a total of roughly $933.1 billion for the LHHS bill as a whole.

Conclusion of the FY2016 Appropriations Process

On December 18, 2015, President Obama signed into law the Consolidated Appropriations Act, 2016 (P.L. 114-113). The final version of this bill was agreed to by both the House and the Senate on the same day that it was enacted. The enacted version provided regular, full-year appropriations for all 12 of the annual appropriations acts, including LHHS (see Division H).

This law appropriated $170.2 billion in discretionary funding for LHHS, which was $6.0 billion (+3.7%) more than FY2015 enacted levels and $4.5 billion (-2.6%) less than the FY2016 President's request. The law also provided an estimated $718.2 billion in mandatory LHHS funding (pre-sequester), for a total of $888.4 billion for LHHS as a whole.

In addition, on September 29, 2016, FY2016 supplemental appropriations for the domestic and international Zika response efforts were enacted in the Zika Response and Preparedness Appropriations Act, 2016 (Division B of H.R. 5325; P.L. 114-223). The Zika supplemental provided $1.1 billion in emergency appropriations, of which a total of $933 million was provided to HHS. The FY2016 budgetary totals in this report do not include these supplemental emergency appropriations. For further information, see CRS Report R44460, Zika Response Funding: Request and Congressional Action, by [author name scrubbed] and [author name scrubbed].

Summary of FY2017 LHHS Appropriations

Table 2 displays FY2017 discretionary and mandatory LHHS budget authority provided or proposed, by bill title, along with FY2016 adjusted levels. The amounts shown in this table reflect total budget authority provided in the bill (i.e., all funds appropriated in the bill, regardless of the fiscal year in which the funds become available), not total budget authority available for the current fiscal year. (For a comparable table showing current-year budget authority, see Table A-2 in the Appendix.)

Figure 2 displays the FY2017 Senate committee-reported discretionary and mandatory LHHS funding levels, by bill title. (While the dollars and percentages discussed in this section were calculated based on amounts in the Senate committee bill, they are generally also illustrative—within one percentage point—of the share of funds directed to each bill title in FY2016 and under the other FY2017 proposals.)

As this figure demonstrates, HHS accounts for the largest share of total FY2017 LHHS appropriations: $778.9 billion, or 82.4%. This is due to the large amount of mandatory funding included in the HHS appropriation, the majority of which is for Medicaid grants to states and payments to health care trust funds. After HHS, ED and the Related Agencies represent the next-largest shares of total LHHS funding, accounting for 7.6% and 7.3% respectively. The majority of the ED appropriations are discretionary, while the bulk of funding for the Related Agencies goes toward mandatory payments and administrative costs of the Supplemental Security Income program at the Social Security Administration. Finally, DOL accounts for the smallest share of total LHHS funds, 1.5%.

When looking only at discretionary appropriations, however, the overall composition of LHHS funding is noticeably different. HHS accounts for a comparatively smaller share of total discretionary appropriations (44.8%), while ED accounts for a relatively larger share (39.5%). Together, these two departments represent the majority (84.3%) of discretionary LHHS appropriations. DOL and the Related Agencies account for a roughly even split of the remaining 15.7% of discretionary LHHS funds.

Figure 2. FY2017 Senate Committee-Reported LHHS Appropriations by Title

Source: Amounts for the FY2017 Senate Appropriations Committee-reported LHHS bill (S. 3040) are generally based on data in S.Rept. 114-274. For consistency with source materials, amounts generally do not reflect mandatory spending sequestration. Notes: Details may not add to totals due to rounding. Amounts in this figure (1) reflect all budget authority appropriated in the bill, regardless of the year in which funds become available (i.e., totals do not include advances from prior-year appropriations, but do include advances for subsequent years provided in this bill); (2) have generally not been adjusted to reflect scorekeeping; (3) comprise only those funds provided for agencies and accounts subject to the jurisdiction of the LHHS subcommittees of the House and Senate appropriations committees; and (4) do not include appropriations that occur outside of appropriations bills.

Department of Labor (DOL)

Note that all amounts in this section are based on regular LHHS appropriations only. Amounts in this section do not include mandatory funds provided outside of the annual appropriations process (e.g., direct appropriations for Unemployment Insurance benefits payments). All amounts in this section are rounded to the nearest million or billion (as labeled). The dollar changes and percentage changes discussed in the text are based on unrounded amounts. For consistency with source materials, amounts do not reflect sequestration or re-estimates of mandatory spending programs, where applicable. Also per source material conventions, the FY2016 column (but not any of the columns for FY2017) reflects certain transfers, reprogramming, and other adjustments for comparability.

About DOL

DOL is a federal department comprised of multiple entities that provide services related to employment and training, worker protection, income security, and contract enforcement. Annual LHHS appropriations laws direct funding to all DOL entities (see the text box).⁹ The DOL entities fall primarily into two main functional areas—workforce development and worker protection. First, there are several DOL entities that administer workforce employment and training programs—such as the Workforce Innovation and Opportunity Act (WIOA) state formula grant programs, Job Corps, and the Employment Service—that provide direct funding for employment activities or administration of income security programs (e.g., for the Unemployment Insurance benefits program).¹⁰ Also included in this area is the Veterans' Employment and Training Service (VETS), which provides employment services specifically for the veteran population. Second, there are several agencies that provide various worker protection services. For example, the Occupational Safety and Health Administration (OSHA), the Mine Safety and Health Administration (MSHA), and the Wage and Hour Division (WHD) provide different types of regulation and oversight of working conditions. DOL entities focused on worker protection provide services to ensure worker safety, adherence to wage and overtime laws, and contract compliance, among other duties. In addition to these two main functional areas, DOL's Bureau of Labor Statistics (BLS) collects data and provides analysis on the labor market and related labor issues.

FY2017 DOL Appropriations Overview

Table 3 displays proposed FY2017 funding levels for DOL, along with FY2016 levels. Compared to FY2016, the House and Senate committee bills proposed that discretionary spending be decreased by 2.8% and 1.1%, respectively. The President's FY2017 budget, on the other hand, proposed that DOL discretionary spending be increased by 5.2% compared to FY2016. Of the combined total funding provided in the bill for DOL, roughly 89% is discretionary.

Selected DOL Highlights

The following sections present FY2017 appropriations highlights for selected DOL accounts and programs.¹¹ Table 4 displays funding for DOL programs and activities discussed in this section.

Employment and Training Administration (ETA)

ETA administers the primary federal workforce development law, the Workforce Innovation and Opportunity Act (WIOA, P.L. 113-128). The WIOA, which replaced the Workforce Investment Act (WIA), was signed into law in July 2014, with provisions going into effect in FY2015 and FY2016.

Title I of the WIOA includes three state formula grant programs serving Adults, Youth, and Dislocated Workers. The FY2017 House committee bill would increase funding to the three state formula grant programs by $20 million (+0.7%), while the Senate committee bill would decrease funding for these programs by $74 million (-2.7%), compared to the FY2016 levels. The FY2017 President's budget proposed that funding for the three WIOA state formula grant programs be increased by $138 million (+5.1%) compared to FY2016.

Compared to the $221 million provided for the Dislocated Workers Activities National Reserve (DWA National Reserve) in FY2016, the FY2017 Senate committee bill would provide the same funding and the FY2017 President's budget would increase that funding by $10 million (+4.5%). The FY2017 House committee bill, however, would decrease funding for the DWA National Reserve from $221 million to $120 million (-45.7%). In the report accompanying the House committee bill, the committee recommends eliminating the advance appropriation for FY2018 for the DWA National Reserve and rescinding the advance provided in FY2016 for the FY2017 DWA National Reserve.¹² Similar to FY2016, the FY2017 President's budget and the House committee bill would each direct $20 million, and the Senate committee bill $19 million, of the DWA National Reserve to provide reemployment and training to workers dislocated from coal mines and coal-fired power plants.

The FY2016 omnibus (P.L. 114-113) provided $90 million for the Apprenticeship Grant program, which had been funded by DOL in FY2015 using $90 million in funds from H-1B fees.¹³ The FY2017 President's budget and the FY2017 Senate committee bill would provide $90 million and $100 million, respectively, for the Apprenticeship Grant program. On the other hand, the FY2017 House committee bill would provide no funding for the Apprenticeship Grant program. In the report accompanying the House committee bill, the committee directs ETA, prior to announcing any Apprenticeship Grant awards, to submit to the committee a report detailing information on eligibility, selection criteria, award amounts, and grantee performance.¹⁴

Wage and Hour Division (WHD)

The FY2017 President's budget would increase funding for WHD by $49 million (+21.6%), in support of the WHD's strategic enforcement initiatives. The WHD administers and enforces a range of laws that provide labor standards (e.g., minimum wages, working hours), such as the Fair Labor Standards Act (FLSA), the Davis-Bacon Act (DBA), and the McNamara-O'Hara Service Contract Act (SCA). The FY2017 President's request reflected an emphasis on "strategic enforcement," which would involve proactive efforts to monitor and enforce compliance rather than complaint-driven, reactive enforcement. The FY2017 Senate committee bill would provide the same funding for the WHD as provided in FY2016. The House committee bill would decrease WHD funding by $12 million (-5.3%) compared to FY2016 funding, and directs in report language that the WHD issue changes to existing regulatory policies via the formal rulemaking process rather than through memoranda or other mechanisms.¹⁵ (This directive is not included in the Senate committee report.)

Bureau of International Labor Affairs (ILAB)

The FY2017 President's budget and the FY2017 Senate committee bill would increase funding by $15 million (+17.5%) and $5 million (+5.8%), respectively, for ILAB, which provides research, advocacy, technical assistance, and grants to promote workers' rights in different parts of the world. The FY2017 House committee bill, however, would decrease funding for ILAB by $54 million (-62.8%). Language in the committee report indicates that the proposed reduction is intended to eliminate new international grants, which typically constitute about two-thirds of ILAB's expenditures.¹⁶

Labor-Related General Provisions

Annual LHHS appropriations acts regularly contain general provisions related to certain labor issues. This section highlights some of the proposed general provisions from one or both of the FY2017 House and Senate committee-reported LHHS bills. (See also the "Selected Related Agencies Highlights" section of this report for a brief discussion of newly proposed restrictions on funding for the National Labor Relations Board contained in the FY2017 House and Senate committee bills.)

The FY2017 House and Senate committee bills include provisions related to the H-2B visa program. Specifically, both of the FY2017 bills include provisions that would continue to direct the Secretary of Labor to accept private wage surveys as part of the process of determining prevailing wages in the H-2B program, even in instances in which relevant wage data are available from the Bureau of Labor Statistics.¹⁷ The H-2B program allows for the temporary employment of foreign workers in non-agricultural sectors and requires these workers to be paid the "prevailing wage" (i.e., the average wage paid to similar workers in the local area). Under DOL regulations, private employer surveys may be considered only if the employer meets certain conditions.

The FY2017 House committee bill, but not the Senate committee bill, would affect two recent DOL rules—the fiduciary rule and the "white collar" overtime exemptions. First, DOL issued a final rule on April 8, 2016, that would expand the definition of "investment advice" within employer-sponsored private-sector pension plans and individual retirement accounts. Individuals who provide financial recommendations that meet the definition of "investment advice" must meet a higher "fiduciary" standard that requires acting solely in the interests of plan participants. The rule may increase the number of individuals held to this higher standard.¹⁸ The final rule is scheduled to take effect on April 10, 2017. The FY2017 House committee bill would prohibit the fiduciary rule from having an effective date or any legal effect.¹⁹ Second, DOL issued a final rule on May 23, 2016, that will increase the salary threshold from $23,660 to $47,476 for executive, administrative, and professional employees to qualify for exemption from the overtime rules in the Fair Labor Standards Act (FLSA).²⁰ The FY2017 House committee bill would prohibit any funds in the bill from being used to implement, administer, or enforce the final overtime rule, which is scheduled to become effective on December 1, 2016.²¹

Department of Health and Human Services (HHS)

Note that all amounts in this section are based on regular LHHS appropriations only; they do not include funds for HHS agencies provided through other appropriations bills (e.g., funding for the Food and Drug Administration) or outside of the annual appropriations process (e.g., direct appropriations for Medicare or pre-appropriated mandatory funds provided by authorizing laws, such as the Patient Protection and Affordable Care Act (ACA, P.L. 111-148)).²² All amounts in this section are rounded to the nearest million or billion (as labeled). The dollar changes and percentage changes discussed in the text are based on unrounded amounts. For consistency with source materials, amounts do not reflect sequestration or re-estimates of mandatory spending programs, where applicable. Also per source material conventions, the FY2016 column (but not any of the columns for FY2017) reflects certain transfers, reprogramming, and other adjustments for comparability.

About HHS

HHS is a large federal department composed of multiple agencies working to enhance the health and well-being of Americans. Annual LHHS appropriations laws direct funding to most (but not all) HHS agencies (see text box below for agencies supported by the LHHS bill).²³ For instance, the LHHS bill directs funding to five Public Health Service (PHS) agencies: the Health Resources and Services Administration (HRSA), Centers for Disease Control and Prevention (CDC), National Institutes of Health (NIH), Substance Abuse and Mental Health Services Administration (SAMHSA), and Agency for Healthcare Research and Quality (AHRQ).²⁴ These public health agencies support diverse missions, ranging from the provision of health care services and supports (e.g., HRSA, SAMHSA), to the advancement of health care quality and medical research (e.g., AHRQ, NIH), to the prevention and control of infectious and chronic diseases (e.g., CDC). In addition, the LHHS bill provides funding for annually appropriated components of CMS,²⁵ which is the HHS agency responsible for the administration of Medicare, Medicaid, the State Children's Health Insurance Program (CHIP), and consumer protections and private health insurance provisions of the ACA.

The LHHS bill also provides funding for two HHS agencies focused primarily on the provision of social services: the Administration for Children and Families (ACF) and the Administration for Community Living (ACL). ACF's mission is to promote the economic and social well-being of vulnerable children, youth, families, and communities. ACL was formed with a goal of increasing access to community supports for older Americans and people with disabilities. ACL is a relatively new agency within HHS—it was established in April 2012 by bringing together the Administration on Aging, the Office of Disability, and the Administration on Developmental Disabilities (renamed the Administration on Intellectual and Developmental Disabilities) into one agency.²⁶ Finally, the LHHS bill also provides funding for the HHS Office of the Secretary (OS), which encompasses a broad array of management, research, oversight, and emergency preparedness functions in support of the entire department.

FY2017 HHS Appropriations Overview

Table 5 displays proposed FY2017 funding levels for HHS, along with FY2016 levels. In general, discretionary funds account for about 10% of HHS appropriations in the LHHS bill. Compared to FY2016, discretionary appropriations for HHS would increase under the House and Senate committee bills, by 2.3% and 1.9%, respectively. The President requested a 0.9% decrease in discretionary LHHS funding for FY2017.

When considering the FY2017 President's request, it is important to note that the HHS budget submission included several proposals for new mandatory funding intended to supplement or replace discretionary funding for existing programs.²⁷ For instance, the President requested new mandatory funding totaling $1.825 billion for NIH and $590 million for SAMHSA. Enacting these new mandatory spending proposals would require legislative action that generally would be expected to occur outside the annual appropriations process and, as a result, these new mandatory funds are not within the scope of this report. However, readers should be aware that additional funding was requested for a number of HHS agencies that is not reflected in the following tables.

Figure 3 provides an agency-level breakdown of proposed HHS appropriations in the FY2017 Senate committee bill. As this figure demonstrates, annual HHS appropriations are dominated by mandatory funding, the majority of which goes to CMS to provide Medicaid benefits and payments to health care trust funds. When taking into account both mandatory and discretionary funding, CMS accounts for $690.8 billion (89%) of total HHS appropriations in the FY2017 Senate committee bill. ACF and NIH account for the next-largest shares of total HHS appropriations, receiving about 4% apiece.

By contrast, when looking exclusively at discretionary appropriations, funding for CMS constitutes only about 6% of proposed HHS appropriations in the FY2017 Senate committee bill. Instead, the bulk of discretionary appropriations goes to the PHS agencies, which combine to account for 64% of discretionary appropriations in the FY2017 Senate committee bill. NIH typically receives the largest share of all discretionary funding among HHS agencies (43% in the Senate committee bill), with ACF accounting for the second-largest share (25% in the Senate committee bill).

Figure 3. FY2017 HHS Appropriations by Agency in the Senate Committee Bill

Source: Amounts for the FY2017 Senate Appropriations Committee-reported LHHS bill (S. 3040) are generally based on data in S.Rept. 114-274. For consistency with source materials, amounts in this report generally do not reflect mandatory spending sequestration except for the estimated transfers from the Prevention and Public Health Fund displayed in certain HHS tables. Notes: Details may not add to totals due to rounding. Amounts in this figure (1) reflect all budget authority appropriated in the bill, regardless of the year in which funds become available (i.e., totals do not include advances from prior-year appropriations, but do include advances for subsequent years provided in this bill); (2) have generally not been adjusted to reflect scorekeeping; (3) comprise only those funds provided for agencies and accounts subject to the jurisdiction of the LHHS subcommittees of the House and Senate appropriations committees; and (4) do not include appropriations that occur outside of appropriations bills.

Special Public Health Funding Mechanisms

Annual appropriations for HHS public health service agencies are best understood in the context of certain additional funding mechanisms: the Public Health Service (PHS) Evaluation Set-Aside and the Prevention and Public Health Fund (PPHF). In recent years, LHHS appropriations have used these funding mechanisms to direct additional support to certain programs and activities.

Public Health Service Evaluation Tap

The PHS Evaluation Set-Aside, also known as the PHS Evaluation Tap, is a unique feature of HHS appropriations. It is authorized by Section 241 of the Public Health Service Act (PHSA), and allows the Secretary of HHS, with the approval of appropriators, to redistribute a portion of eligible PHS agency appropriations across HHS for program evaluation purposes.

The PHSA limits the set-aside to not less than 0.2% and not more than 1% of eligible program appropriations. However, LHHS appropriations acts have commonly established a higher maximum percentage for the set-aside and distributed specific amounts of "tap" funding to selected HHS programs. Since FY2010, the maximum set-aside level that has been allowed in appropriations acts is 2.5% of eligible appropriations. The FY2017 President's budget proposed an increase in the set-aside to 3.0% of eligible appropriations, but this proposal was rejected in the House and Senate committee bills for FY2017. The Senate committee bill would increase the set-aside to 2.6%, while the House committee bill would reduce the set-aside to 2.4% of eligible appropriations.²⁸

Before FY2015, the PHS tap traditionally provided more than a dozen HHS programs with funding beyond their annual appropriations and, in some cases, was the sole source of funding for a program or activity. However, in both FY2015 and FY2016, LHHS appropriations directed tap funds to only about a half dozen programs or activities within just three HHS agencies (NIH, SAMHSA, and OS) and did not provide any tap transfers to AHRQ, CDC, and HRSA. This has been particularly notable for AHRQ, which had been funded primarily through tap transfers from FY2003 to FY2014, but has received discretionary appropriations since then.²⁹ While both committee bills generally would maintain this distributional practice for FY2017, the President's budget proposed an expansion of the number of programs and activities funded by the PHS tap. The expanded list of agencies and activities for which tap funds were requested includes ARHQ.

An additional change from past precedent occurred in FY2015. LHHS appropriations began to direct the largest share of tap transfers ($715 million in FY2015 and $780 million in FY2016) to NIH. As a result, NIH went from being by far the largest net donor of tap funds to a net recipient of tap funds.³⁰ The FY2017 committee bills and the President's budget propose to continue this emphasis on NIH in the allocation of tap funds. Moreover, both the President's budget and the Senate committee bill would substantially increase the level of tap funding provided to NIH relative to FY2016, by 8.7% and 9.9%, respectively. In contrast, the House committee bill proposes a comparatively modest increase of 1.5%.

Readers should note that, by convention, tables in this report show only the amount of PHS Evaluation Tap funds received by an agency (i.e., tables do not subtract the amount of the evaluation tap from donor agencies' appropriations). That is to say, tap amounts shown in the following tables are in addition to amounts shown for budget authority, but the amounts shown for budget authority have not been adjusted to reflect potential "transfer-out" of funds to the tap.

Prevention and Public Health Fund

The ACA both authorized and appropriated mandatory funding for three multibillion dollar trust funds to support programs and activities within the PHS agencies.³¹ One of these, the Prevention and Public Health Fund (PPHF, ACA §4002, as amended), is intended to provide support each year to prevention, wellness, and related public health programs funded through HHS accounts.³² The ACA appropriated $2 billion in mandatory funds to the PPHF for FY2017, but this amount was later reduced to $1 billion by the Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96), which decreased total PPHF appropriations by $6.25 billion over the course of FY2013-FY2021. In addition, the FY2016 PPHF appropriation is subject to a 6.8% reduction due to sequestration of nonexempt mandatory spending. (For more information on sequestration, see the budget enforcement discussion in the Appendix.)

PPHF funds are intended to supplement (sometimes quite substantially) the funding that selected programs receive through regular appropriations, and to fund new programs, particularly those newly authorized by the ACA. The ACA instructs the HHS Secretary to transfer amounts from the PPHF to HHS agencies for prevention, wellness, and public health activities. The President's annual budget request sets out the intended distribution and use of PPHF funds for each fiscal year. The Secretary determined how to distribute these funds for FY2010 through FY2013. However, starting with FY2014 provisions in annual appropriations acts and accompanying reports have explicitly directed the distribution of PPHF funds and prohibited the Secretary from making further transfers for those years.³³ The House and Senate committee bills for FY2017 would each retain these provisions, whereas the President's budget proposes that they be eliminated.³⁴

The CDC commonly receives the largest share of annual PPHF funds, and this practice would be continued in FY2017 by the committee bills and the President's budget request. The House committee bill proposes that the CDC receive $908 million from the PPHF, which is a 1.8% increase over the FY2016 level ($892 million), whereas the President's budget recommended a more substantial increase of 5.8% (to $944 million). In contrast, the Senate committee bill would slightly decrease PPHF funding for the CDC, to $891 million.

Readers should note that the PPHF transfer amounts displayed in the HHS tables in this report are in addition to amounts shown for budget authority provided in the bill. For consistency with source materials, the amounts shown for PPHF transfers in these tables reflect the estimated effects of mandatory spending sequestration; this is not true for other mandatory spending shown in this report.

Selected HHS Highlights by Agency

This section begins with a limited selection of FY2017 discretionary funding highlights by HHS agency. The discussion is largely based on the proposed appropriations levels in the FY2017 House and Senate committee bills and the FY2017 President's budget, compared to FY2016 levels.³⁵ These summaries are followed by a brief overview of significant provisions from annual HHS appropriations laws that restrict spending in certain controversial areas, such as abortion and stem cell research. The section concludes with two tables (Table 6 and Table 7) presenting more detailed information on FY2016 and proposed FY2017 funding levels for HHS.

HRSA

The FY2017 House and Senate committee bills and the President's budget request would each provide less discretionary funding to HRSA than they did in FY2016 ($6.2 billion). The Senate committee bill proposes a slight reduction of $35 million (-0.6%) in discretionary HRSA funding when compared to FY2016, whereas the House committee bill proposes a more significant reduction of $271 million (-4.4%). The President's budget request proposed an even greater reduction—$454 million (-7.3%)—compared to FY2016.

Much of the difference between the FY2017 House and Senate committee bills is due to differences in proposed FY2017 funding for the Title X Family Planning Program. The FY2017 House committee bill would eliminate funding for the Family Planning Program authorized in Title X of the PHSA. Section 228 of the House committee bill would further prohibit the use of HHS funds in the bill to carry out Title X of the PHSA. The Senate committee bill, however, would provide $286 million for the Title X Family Planning Program, the same as the FY2016 amount, but $14 million less than the President's budget request.

CDC

For CDC, the FY2017 House committee bill would provide $604 million more (+9.6%) and the FY2017 Senate committee bill would provide $117 million less (-1.9%) than the discretionary appropriations provided in FY2016 ($6.3 billion). Both committee bills would provide more than the President's discretionary budget request ($6.0 billion), which represents a $303 million reduction (-4.8%) from FY2016 levels.

Compared to FY2016, the largest percentage increases in the FY2017 House committee bill are to Global Health (+30.3%) and Emerging and Zoonotic Infectious Diseases (+18.5%). The House committee report directs most or all of these increases toward response to the Zika virus outbreak,³⁶ while also appropriating an additional $300 million for a new CDC reserve fund to enable rapid response to a future infectious disease crisis (the Infectious Diseases Rapid Response Fund). The Senate Appropriations Committee does not specifically set aside any FY2017 appropriations for the Zika response, nor does it include a comparable proposal for an infectious diseases reserve fund.

Significant increases or decreases compared to FY2016 are proposed for two other accounts. Injury Prevention and Control would be increased by the House committee bill (+10.6%), the Senate committee bill (+11.9%), and the President's budget (+13.8%). In contrast, Chronic Disease Prevention and Health Promotion would be reduced by both committee bills and the President's budget. The largest of these funding decreases would occur under the Senate committee bill—$111 million in discretionary appropriations (-13.3%) and a $1 million reduction in PPHF transfer. The President's budget also proposed a reduction in discretionary appropriations, of $158 million (-18.9%), which would be somewhat offset by a $98 million increase in the PPHF transfer. The funding levels proposed by the House committee bill would result in a similar outcome, but with a $58 million (+6.9%) increase in discretionary appropriations and a $137 million decrease in the PPHF transfer.

Continuing the practice started in the FY2015 omnibus, the FY2017 House and Senate committee bills would not direct any PHS tap funds to CDC. (The President's budget requested $72 million in tap funds.) As mentioned previously, the House committee report proposes a slight increase in the PPHF funding provided to the CDC (+1.8%), whereas the Senate committee report proposes a slight decrease (-0.1%). The President's budget recommended a more substantial increase of 5.8% in PPHF funds for the agency.

NIH

The House and Senate committee bills would each increase discretionary funding for NIH compared to the FY2016 level of $31.3 billion. The House committee bill proposes $32.5 billion in discretionary funding, an increase of $1.2 billion (+4.0%) compared to FY2016, while the Senate committee bill proposes $32.9 billion, an increase of $1.6 billion (+5.2%) compared to FY2016. The President's budget request of $30.2 billion in discretionary funding would be $1.1 billion (-3.4%) less than FY2016. Consistent with FY2016, the House committee bill, the Senate committee bill, and the President's request each propose that the entirety of the PHS tap transfer funds received by NIH be allocated to the National Institute of General Medical Sciences (NIGMS). The House committee bill would transfer $792 million to NIH, a 1.5% increase from the FY2016 amount. The Senate committee bill would increase the tap transfer by 9.9%, for a total of $857 million. The President requested about $10 million less for the tap transfer than the amount proposed by the Senate, which would be an increase of 8.7% over FY2016.

The House and Senate committee bills each propose changes to the HHS Nonrecurring Expense Fund (NEF). The NEF was established by the Consolidated Appropriations Act, 2008, to enable the HHS Secretary to collect certain unobligated balances of expired discretionary funds appropriated to HHS from the General Fund.³⁷ Funds transferred into the NEF are available to the Secretary for capital acquisitions across HHS, including facilities infrastructure and information technology. The Senate committee bill proposes to make a portion of NEF funds available to the Office of the Director only for biomedical research activities at NIH, while Section 226 of the House committee bill proposes to terminate the NEF and rescind remaining unobligated balances.

The appropriations committees historically have not directed spending for research on particular diseases at NIH.³⁸ However, the explanatory statement accompanying the FY2016 omnibus represented a significant departure from this precedent by calling for NIH to reserve $936 million for Alzheimer's disease research.³⁹ The FY2016 explanatory statement also called on NIH to reserve $200 million for a new Precision Medicine Initiative (PMI) and $150 million for the Brain Research through Application of Innovative Neurotechnologies (BRAIN) initiative. For FY2017, the House and Senate committee reports each include similar recommendations of specific funding increases for the PMI and BRAIN initiatives, as well as Alzheimer's disease research.⁴⁰ The Senate committee report also proposes an increase for antibiotic resistance research.⁴¹

SAMHSA

The House and Senate committee bills would each increase discretionary funding for SAMHSA relative to FY2016. The House committee bill would provide $4.1 billion in discretionary funding for SAMHSA, which is $476 million (+13.3%) more than the FY2016 funding level and $572 million (+16.4%) more than the President's request. The bill would also direct $151 million in transfers from the PHS evaluation tap to SAMHSA, $17 million more than FY2016, spreading these transfers across five SAMHSA programs and activities. The Senate committee bill would increase discretionary funding for SAMHSA to a lesser degree than what was proposed by the House committee. The $3.6 billion for SAMHSA proposed by the Senate committee is $7 million (+0.2%) more than the FY2016 funding level, and $103 million (+2.9%) more than the President's request. The Senate committee bill would provide $135 million in evaluation tap transfers for four out of the five programs identified by the House committee bill for those transfers. This is a $1 million increase over FY2016 levels and $16 million less than the House committee bill. The Senate committee bill would fund the fifth SAMHSA program through a $12 million transfer from the PPHF. The House committee bill would not transfer any PPHF funds to SAMHSA.

The House and Senate appropriations committees address the issue of heroin and prescription opioid abuse differently in their respective proposals.⁴² While the House and Senate committee reports both allocate funds at various HHS agencies for existing purposes related to opioid abuse research, prevention, and treatment, the House committee bill would appropriate $500 million for a new program at SAMHSA to provide Comprehensive Opioid Response grants to states, territories, and tribes. The funds provided for this program would be used for the prevention and treatment of opioid abuse, including heroin abuse, and related health conditions. The bill directs that, in awarding these grants, priority be given to states, territories, and tribes with the highest rates of opioid overdose deaths.

The President's request proposed that the SAMHSA Administrator be given new authority to transfer discretionary funds among SAMHSA accounts, provided that the transfer does not decrease any account by more than 3%. Neither the Senate committee bill nor the House committee bill included this requested language. However, the House and Senate committee bills would each retain an existing general provision (§205) that gives HHS the authority to transfer appropriations from one account to another, provided that the transfer does not decrease any account by more than 1% or increase an account by more than 3%.

AHRQ

The House committee bill would provide $280 million in discretionary funding for AHRQ, which would be a 16.1% reduction from the FY2016 level of $334 million. The Senate committee bill proposes $324 million, a 3.0% decrease to AHRQ's discretionary funding relative to the prior year. Neither the House committee bill nor the Senate committee bill would direct any PHS tap transfers to AHRQ, which is in keeping with FY2015 and FY2016, but stands in contrast to earlier years (FY2003-FY2014) in which AHRQ had been funded primarily with tap transfers. The President's request proposed a total of $364 million for AHRQ—8.9% more than FY2016—through a combination of discretionary funding ($280 million) and tap transfers ($83 million).⁴³

The House committee bill includes a new general provision (§227) that would prevent any funds appropriated to HHS in the bill from being used to support patient-centered outcomes research. However, this provision would not prevent AHRQ from disseminating the results of patient-centered outcomes research with transfers from certain mandatory funds that were authorized and appropriated to the Patient-Centered Outcomes Research Trust Fund (PCORTF) by the ACA.⁴⁴ (PCORTF funds are generally not displayed in this report, as they are not provided by or modified through annual LHHS appropriations bills.)

The House and Senate committee reports each include several recommendations and instructions for AHRQ. For example, the House report directs the HHS Secretary to identify and review AHRQ's overlapping activities with other HHS agencies, and to develop a plan to consolidate mission areas and reduce duplication.⁴⁵ The Senate report urges AHRQ to expand its Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys to develop a CAHPS survey for maternity care. It also "strongly urges" the HHS Secretary to improve transparency and inclusion of physician experts in the development of U.S. Preventive Services Task Force (USPSTF) recommendations.⁴⁶

CMS

Neither the House committee bill nor the Senate committee bill would provide the President's proposed funding level of $4.8 billion in discretionary budget authority for CMS. The President's request represented an increase of $484 million (+11.1%) from FY2016. The House committee bill would provide $576 million less (-13.2%) than FY2016 and the Senate committee bill would provide $44 million more (+1.0%) than FY2016.

The Health Care Fraud and Abuse Control (HCFAC) account would receive the same discretionary budget authority as FY2016 ($681 million) in the House committee bill, but it would receive an increase of $44 million (+6.5%) in both the Senate committee bill and the President's budget. The Senate committee report notes that for every dollar spent on health care fraud and abuse, $2 is recovered by the Treasury. The House and Senate committee bills would designate a portion of the HCFAC appropriation as spending that is effectively exempt from discretionary budget caps ($370 million in the House committee bill and $414 million in the Senate committee bill).

Neither the House committee bill nor the Senate committee bill would provide the President's proposed FY2017 funding level of $4.1 billion (12.0% more than FY2016) for the CMS program management account. The Senate committee bill would maintain program management at FY2016 levels ($3.7 billion), while the House committee bill would reduce program management funding by $576 million (-15.7%) compared to FY2016. This account supports CMS program operations (e.g., claims processing, information technology investments, provider and beneficiary outreach and education, and program implementation), in addition to federal administration and other activities related to the administration of Medicare, Medicaid, the State Children's Health Insurance Program, and private health insurance provisions established by the ACA. Notably, the House committee bill would eliminate a general provision (included in LHHS appropriations acts since FY2014) authorizing HHS to transfer additional funds into this account from the Medicare trust funds, provided such funds are used to support activities specific to the Medicare program. The Senate committee bill would maintain this general provision, authorizing transfers of up to $305 million and explicitly prohibiting such transfers from being used to support or supplant funding for ACA implementation.

The House committee bill includes several new provisions related to the CMS program management account that are not included in the Senate committee bill. For instance, the House committee bill would prohibit funds made available to this account from being used to support the CMS Center for Consumer Information and Insurance Oversight (CCIIO) or its activities. The House committee bill would also prevent funds from being used for research, demonstrations, and evaluation. In addition, the House committee bill would redirect certain offsetting collections from Recovery Audit Contractors toward specified activities, including efforts to support the Office of Medicare Appeals in reducing its backlog.

The House and Senate committee bills would each continue the general provision, included in annual LHHS appropriations since FY2015, preventing certain funds from being used to make risk corridor payments associated with health insurance exchanges.⁴⁷ The ACA requires HHS to administer a risk corridor program for qualified health plans offered through health insurance exchanges in calendar years 2014-2016.⁴⁸ Through this program, HHS must make payments to insurers who experience high losses, while insurers who experience high gains must remit a portion of those gains to HHS.⁴⁹ The House and Senate committee bills for FY2017 continue to prohibit HHS from making risk corridor payments with funds appropriated to the CMS Program Management account from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or with funds transferred to the CMS Program Management account from other accounts funded in the LHHS bill.

ACF

All three FY2017 proposals call for increases in discretionary ACF appropriations compared to the FY2016 level of $33.0 billion. The President requested the largest increase (+4.7%), while the Senate committee bill would provide the smallest increase (+0.03%). All three proposals demonstrate support for certain early childhood care and education programs, such as Head Start. The House and Senate committee bills would sustain amounts provided in FY2016 to support the President's plan to lengthen the Head Start program day and program year, but would not provide the increased funding requested by the President for this purpose. The committee bills would also provide some funds for a cost-of-living adjustment (COLA) for Head Start grantees, with the size of the COLA varying by bill.

The reports accompanying the House and Senate committee bills both recommend $250 million for the new Preschool Development Grants program authorized by the Every Student Succeeds Act (ESSA; P.L. 114-95). These grants are intended to improve coordination and alignment of early childhood programs that prepare low-income and disadvantaged children for kindergarten. The House and Senate committee recommendations for FY2017 match the funding level authorized by ESSA, but are $100 million (-29%) less than the President's request.⁵⁰

ACL

The House committee bill would provide nearly $2.0 billion in discretionary budget authority for ACL, $16 million (+0.8%) more than FY2016 and $12 million (-0.6%) less than the FY2017 President's request. The Senate committee bill would provide $1.9 billion in discretionary budget authority for ACL, $57 million (-2.9%) less than FY2016 and $86 million (-4.3%) less than the FY2017 President's request. The Senate committee bill and the President's budget both propose that $28 million in PPHF transfers be directed to ACL, the same amount as FY2016. The House committee bill would direct $23 million in PPHF transfers to ACL, a $5 million reduction from FY2016 because the bill would fund Elder Falls Prevention with $5 million in discretionary funding rather than $5 million in PPHF transfers as was the case in FY2016.

While the House and Senate committee bills would fund most programs at close to FY2016 levels, with some exceptions, each bill also would eliminate funding for certain programs and activities. The House committee bill would eliminate funding for the Limb Loss Resource Center,⁵¹ which was moved to ACL from CDC in FY2015 and received $3 million in FY2016. The House committee bill would also eliminate funding for the Paralysis Resource Center, ⁵² which was moved to ACL from CDC in FY2014 and received $8 million in FY2016. (The House committee report states that other ACL-administered programs can conduct these activities.) Both the Senate committee bill and the President's budget would continue these activities at FY2016 levels.

The Senate committee bill would eliminate discretionary funding for the State Health Insurance Assistance Program (SHIP), which provides one-on-one personalized insurance counseling and assistance to Medicare beneficiaries and their families.⁵³ SHIP received $52 million in discretionary funding in FY2016, and the House committee bill and the President's budget propose that discretionary funding be continued at the same level for FY2017. The Senate committee report cites budget constraints in explaining the proposed elimination of SHIP funding, but goes on to express an expectation that ACL will continue to coordinate with CMS and the states to provide information to Medicare beneficiaries and their families.

The Program Administration account at ACL would be continued at the FY2016 level ($40 million) by the Senate committee bill and reduced to $38 million by the House committee bill. (The President's budget requested a $1 million increase for this account.) The House and Senate committee reports note that ACL has proposed to expand administrative capacity by transferring funds from grants to support new staff. In its report, the Senate committee urges ACL "to more thoughtfully examine" the proposed transfer's potential impact on smaller formula grant programs.⁵⁴ The House committee report directs ACL "to maintain the fiscal year 2015 funding for the grants for all programs, and where there were increases provided in fiscal year 2016, the Committee directs ACL to increase grants by the same amount."⁵⁵ The report also requests that ACL's FY2018 budget request provide details on proposed grant reductions and proposed staff increases.⁵⁶

Funding Restrictions Related to Certain Controversial Issues

Annual LHHS appropriations measures regularly contain broad restrictions related to certain controversial issues. For instance, annual LHHS appropriations acts commonly include provisions limiting the use of federal funds for abortions, the use of human embryos for research, needle exchange programs, and gun control advocacy.

Abortions: Since FY1977, annual LHHS appropriations acts have included provisions limiting the circumstances under which LHHS funds (including Medicaid funds) may be used to pay for abortions. Early versions of these provisions applied only to HHS, but since FY1994 most provisions have applied to the entire LHHS bill. Under current provisions, (1) abortions may be funded only when the life of the mother is endangered or in cases of rape or incest; (2) funds may not be used to buy a managed care package that includes abortion coverage, except in cases of rape, incest, or endangerment; and (3) federal programs and state and local governments that receive LHHS funding are prohibited from discriminating against health care entities that do not provide or pay for abortions or abortion services. The FY2017 House and Senate committee bills would retain these existing restrictions.⁵⁷ In addition, the House committee bill would include a new provision (§533) based on the Health Care Conscience Rights Act (H.R. 940). Among other things, this provision would amend the ACA to specify that individuals/employers would not have to purchase/sponsor coverage of abortions or other items or services to which they have a moral or religious objection.

Human Embryos: Since FY1996, annual LHHS appropriations have included a provision prohibiting any LHHS funds (including NIH funds) from being used to create human embryos for research purposes or for research in which human embryos are destroyed. The FY2017 House and Senate committee bills would retain these existing restrictions.⁵⁸

Needle Exchange: Since FY1990, annual LHHS appropriations have generally included a provision prohibiting any LHHS funds from being used for needle exchange programs (i.e., programs in which sterile needles or syringes are made available to injection drug users in exchange for used needles or syringes to mitigate the spread of related infections, such as Hepatitis and HIV/AIDS).⁵⁹ The FY2016 omnibus modified the existing provision, by allowing funds to be used for needle exchange programs under the following conditions: (1) federal funds may not be used to purchase the needles, but may be used for other aspects of such programs; (2) the state or local jurisdiction must demonstrate, in consultation with CDC, that they are experiencing, or at risk for, a significant increase in hepatitis infections or an HIV outbreak due to injection drug use; and (3) the program must be operating in accordance with state and local law.⁶⁰ The FY2017 House and Senate committee bills would retain the modified restrictions from FY2016.

Gun Control: Since FY1997, annual LHHS appropriations have included provisions prohibiting the use of certain funds for activities that advocate or promote gun control. Early versions of these provisions applied only to CDC; since FY2012, annual appropriations acts have included HHS-specific restrictions, in addition to restrictions that apply to all LHHS funds (including funds transferred from the PPHF). The FY2017 House and Senate committee bills would retain these existing restrictions.⁶¹

ACA Implementation: Since FY2011, annual LHHS appropriations have included provisions limiting or altering the ability of HHS to implement various aspects of the ACA.⁶² The content and scope of these provisions has evolved over time. Most recently, the FY2017 House committee bill (§230) would prohibit any funds appropriated in the bill from being used for health insurance "navigator" programs required by Section 1311 of the ACA. (Navigators conduct public education activities to help consumers and small businesses make informed decisions about insurance.⁶³) Further, the House committee bill would prohibit LHHS appropriations from being used to "implement, administer, enforce, or further" any provision of the ACA, with limited exceptions (§526) and would prohibit HHS from generating funds from offsetting collections derived through fees collected from qualified plans operating under health care exchanges. The Senate committee bill does not include comparable provisions. Certain other ACA-related provisions are discussed elsewhere in this report (e.g., see the "CMS" section).

Department of Education (ED)

Note that amounts in this section are based on regular LHHS appropriations only. They do not include mandatory funds provided outside of the annual appropriations process (e.g., direct appropriations for Federal Direct Student Loans and Pell Grants). Amounts are rounded to the nearest million or billion (as labeled). The dollar and percentage changes discussed are based on unrounded amounts. For consistency with source materials, amounts do not reflect sequestration or re-estimates of mandatory spending programs, where applicable. Also per source material conventions, the FY2016 column (but not any of the columns for FY2017) reflects certain transfers, reprogramming, and other adjustments for comparability. These source materials also adjust FY2016 Department of Education funding levels and account structures included in this report to reflect statutory changes in ED programs in FY2017.⁶⁴

About ED

Federal policymakers established the U.S. Department of Education (ED) in 1980.⁶⁵ Its mission is to "promote student achievement and preparation for global competitiveness by fostering educational excellence and ensuring equal access."⁶⁶ Typically, about three-quarters of ED's discretionary appropriations go either to local educational agencies—which primarily use the funds to provide educational and related services for economically disadvantaged or disabled children—or to low-income postsecondary students in the form of Pell Grants, which pay for college. The remainder of ED's discretionary budget provides for a wide range of activities, including (but not limited to) support for minority-serving institutions; educational research; and career, technical, and adult education.

The federal government provides roughly 8% of overall funding for elementary and secondary education in the United States.⁶⁷ The majority of school funding—about 80%—comes from states and local districts, which have primary responsibility for the provision of elementary and secondary education. With regard to higher education, the federal government provided roughly 65% of undergraduate and graduate student aid in 2014-2015.⁶⁸

FY2017 ED Appropriations Overview

Table 8 displays proposed ED funding levels for FY2017, along with FY2016 levels. Discretionary funds represent the majority of ED's annual appropriations, accounting for roughly 95% of FY2016 enacted levels and the amounts in the FY2017 proposals.⁶⁹ Compared to FY2016, discretionary ED appropriations would decrease slightly under both the House committee bill (-1.6%) and the Senate committee bill (-0.3%) for FY2017. By contrast, the President's budget requested an increase in discretionary funding from FY2016 (+2.0%).

Selected ED Highlights

The following sections highlight FY2017 appropriations for selected ED accounts and programs.⁷⁰ Table 9 tracks funding levels for major ED budget and appropriations accounts.

Education for the Disadvantaged

The House and Senate committee bills are $107 million apart in their respective FY2017 recommendations for the Education for the Disadvantaged account. The House committee bill would provide $16.0 billion, a $57 million (-0.4%) decrease from the FY2016 funding level. The Senate committee bill, on the other hand, would provide $16.1 billion, a $50 million (+0.3%) increase from the FY2016 level. The President requested the same amount as FY2016.

Within the Education for the Disadvantaged account, the vast majority of funding is for the Grants to Local Educational Agencies (or Title I-A) program, which is the largest elementary and secondary education program administered by ED. It is designed to provide supplementary educational and related services to low-achieving and other students attending schools with relatively high concentrations of students from low-income families. Title I-A funds are allocated through four formulas: Basic Grants, Concentration Grants, Targeted Grants, and Education Finance Incentive Grants (EFIG).⁷¹ The House and Senate committee bills would each provide around $500 million more in funding for the Title I-A program in FY2017 compared to FY2016—the second year in a row that the program would receive an increase of this magnitude.⁷² However, the House and Senate committee bills would distribute their recommended funding increases differently within the Title I-A program. The Senate committee bill would increase funding for Targeted Grants and EFIG, while holding Basic Grants and Concentration Grants at FY2016 levels. The House committee bill, on the other hand, would direct all of its recommended increase to Basic Grants.

The distribution of funds within the Title I-A program has been slowly shifting over time, for a variety of reasons. The percentage of funds for the Basic Grant formula has been falling, while the percentage of funds for Targeted Grants and EFIG has been increasing. Because local educational agency (LEA) eligibility thresholds for Targeted Grants and EFIG are higher than the eligibility threshold for Basic Grants, one practical implication of this shift has been a focusing of Title I-A funds on a more targeted set of LEAs. The Senate committee bill (and President's request) for FY2017 would continue this focusing trend, while the House committee bill would increase funding for the Title I-A formula under which the largest proportion of LEAs participate (Basic Grants).⁷³

Student Support and Academic Enrichment State Grants (School Improvement Programs)

Student Support and Academic Enrichment State Grants, commonly referred to as the "Title IV-A block grant," would provide a new ED funding stream for state educational agencies (SEAs) and LEAs. (This block grant is funded through the School Improvement Programs account.) The authority for this block grant was created in the most recent reauthorization of the Elementary and Secondary Education Act of 1965—the Every Student Succeeds Act (ESSA, P.L. 114-95)—which was enacted on December 10, 2015. The ESSA made changes to various pre-kindergarten through grade 12 (P-12) programs at ED, which included repealing certain school safety, math and science education, educational technology, and other programs. These programs were replaced with the Title IV-A block grant program, for which ESSA authorized appropriations of $1.65 billion in formula funds to SEAs and LEAs for FY2017.⁷⁴

The FY2017 funding levels proposed for the Title IV-A block grant—which are all lower than authorized—have been the subject of some debate because it is unclear if they would provide sufficient resources to LEAs to carry out the program. The House committee bill recommends a funding level ($1 billion) that is the closest to the authorized level, while the Senate committee bill recommends an amount ($300 million) that is closer to the combined FY2016 appropriations total for certain programs that were eliminated and consolidated into the Title IV-A block grant.⁷⁵ The FY2017 President's request for the program was $500 million. As authorized, the Title IV-A block grants would be provided to states by statutory formula. In turn, states are then to provide subgrants to LEAs (also by formula). At lower levels of total program funding, LEAs may receive commensurately smaller subgrants under the formula distribution process, and may be unable to carry out the purposes of the program. While the President's request proposed appropriations language that would allow states to award LEA subgrants on a competitive basis, rather than on a formula basis, the House and Senate committee bills do not include this language.

Special Education

The House committee bill would provide $13.4 billion in FY2017 funding for Special Education programs. This amount is $387 million (+3.0%) more than the Senate committee bill would provide ($13.0 billion); $340 million (+2.6%) more than the President's request ($13.1 billion); and $430 million (+3.3%) more than the FY2016 funding level ($13.0 billion).

The Special Education account funds Grants to States (Part B), Preschool Grants, and Grants for Infants and Families programs, each of which provide formula funding to states for educational and related services authorized under the Individuals with Disabilities Education Act (IDEA).⁷⁶ In addition, the Special Education account funds IDEA National Activities, such as grants for IDEA-related personnel preparation, parent centers, technical assistance, information dissemination, and model demonstration projects. Compared to FY2016, the House committee bill would provide a 4.2% increase to Grants to States (Part B), which is the largest federal special education program, while holding Preschool Grants and Grants for Infants and Families at FY2016 levels, and significantly decreasing funds allocated for IDEA National Activities (-29.7%). The Senate committee bill proposes a smaller increase to Part B Grants to States (+0.3%), while holding Preschool Grants and Grants for Infants and Families at FY2016 levels and slightly increasing National Activities (+1.1%). The President requested no increase for Part B Grants to States and most National Activities line items, and instead sought a 9.5% increase for Preschool Grants and a 9.8% increase for Grants for Infants and Families.

Pell Grants (Student Financial Assistance)

For FY2017, the House committee bill seeks $21.2 billion in discretionary appropriations for the Pell Grant program, which provides need-based financial aid primarily to low-income postsecondary students to help them cover the cost of higher education..⁷⁷ (The program is funded through the Student Financial Assistance account.) The Senate committee bill would provide $22.5 billion for Pell Grants, which is the same amount as FY2016 and the President's FY2017 request. For the discretionary portion of the maximum Pell Grant award, the House and Senate committee bills would each provide funding sufficient to maintain an award level of $4,860. (The maximum award totals $5,915 when also taking into account the estimated $1,055 mandatory add-on.⁷⁸)

Despite the apparent difference in the discretionary funding levels proposed by the House and Senate committees, both committee bills would provide roughly similar levels of total budgetary resources for the program in FY2017. This is because the Pell Grant program receives funding in addition to its discretionary appropriations through both definite and indefinite mandatory appropriations in statute.⁷⁹ (These mandatory appropriations are provided outside the annual appropriations process and do not appear in Table 9.) In addition, because of the way the Pell Grant program is funded, it may run surpluses (or shortfalls) in discretionary appropriations.⁸⁰ These surpluses (or shortfalls) are included in calculations of total program resources. Due to the decline in discretionary program costs that has occurred over the past five years, the Congressional Budget Office (CBO) estimates that the Pell Grant program will have a cumulative surplus of $7.8 billion at the end of FY2016.⁸¹

While the House and Senate committee proposals each factor in the Pell surplus and assume a continued decrease in program costs under current law, they approach the Pell program differently. The Senate committee bill would keep the discretionary funding level constant in FY2017, but a proposal included in the bill would allow students to receive Pell Grants year-round, which would increase the discretionary costs of the program relative to previous fiscal years. ⁸² The Senate committee bill also includes a $1.2 billion rescission of FY2016 discretionary appropriations, and would amend the HEA to reduce the definite mandatory appropriations from $1.574 billion to $1.320 billion. ⁸³ The House committee bill, on the other hand, does not recommend changes to the definite mandatory appropriation or to the cumulative surplus. The lower level of FY2017 discretionary appropriations that the House committee bill would provide relative to the Senate committee bill reflects the House's assumption of a continued decline in program costs and its lack of a year-round Pell proposal.

Related Agencies

Note that all amounts in this section are based on regular LHHS appropriations only; they do not include funds provided outside of the annual appropriations process (e.g., mandatory appropriations for Old-Age, Survivors, and Disability Insurance benefit payments by the Social Security Administration). All amounts in this section are rounded to the nearest million or billion (as labeled). The dollar changes and percentage changes in the text are based on unrounded amounts. For consistency with source materials, amounts do not reflect sequestration or re-estimates of mandatory spending programs, where applicable. Also per source material conventions, the FY2016 column (but not any of the columns for FY2017) reflects certain transfers, reprogramming, and other adjustments for comparability.

FY2017 Related Agencies Appropriations Overview

Table 10 displays proposed FY2017 funding levels for LHHS related agencies, along with FY2016 levels. In general, discretionary funds constitute about 20% of total appropriations for LHHS related agencies. Compared to FY2016, discretionary appropriations for related agencies would increase under both the President's request (+6.4%) and the Senate committee bill (+1.8%) for FY2017. In contrast, discretionary funding for related agencies would decrease under the House committee bill (-2.5%).

The largest share of funding appropriated to related agencies in the LHHS bill consistently goes to the Social Security Administration (SSA).⁸⁴ When taking into account both mandatory and discretionary funding, SSA represents roughly 97% of total related agencies appropriations in FY2016 and in the FY2017 proposals. The bulk of mandatory funding provided to SSA from the LHHS bill supports the Supplemental Security Income (SSI) program, which provides means-tested cash assistance to disabled adults and children and to seniors aged 65 or older.

When looking exclusively at discretionary funding, SSA represents at least 84% of discretionary appropriations for LHHS related agencies in FY2016 and in the FY2017 proposals. Most of SSA's discretionary funding is used by the agency to administer the Social Security and SSI programs and to support CMS in administering portions of Medicare.⁸⁵

After SSA, the next-largest agency in terms of related agencies appropriations is the Corporation for National and Community Service (CNCS), which accounts for about 2% of total related agencies appropriations in FY2016 and in the FY2017 proposals. Typically, each of the remaining related agencies receives less than $1 billion from the annual LHHS appropriations bill. For more information, see Table 11.

Selected Related Agencies Highlights

The following sections highlight FY2017 appropriations issues for selected related agencies. Table 11 tracks funding levels for these related agencies.

SSA Limitation on Administrative Expenses (LAE)

The SSA LAE account, which provides nearly all of SSA's administrative funding, mainly consists of funds that are used by the agency to administer the Social Security and SSI programs, and also to support CMS in administering portions of Medicare. The account also contains funds that are specifically set aside for program integrity activities, such as continuing disability reviews (CDRs) and SSI non-medical redeterminations. Compared to the FY2016 amount ($12.2 billion), total funding for the LAE account would increase under both the President's request (+7.4%) and the Senate committee bill (+2.6%) for FY2017, but would decrease under the House committee bill (-2.2%).⁸⁶

The program integrity portion of the LAE account for FY2017 includes $273 million in "base" funding that is subject to the discretionary spending caps established by the Budget Control Act of 2011, and also includes additional funding that is effectively exempt from those caps (see the Appendix). The combined total of program integrity funding that the House committee bill would provide is the same as FY2016 ($1.4 billion). In contrast, both the Senate committee bill and the President's budget would increase that funding by 27.6%, to $1.8 billion.

National Labor Relations Board (NLRB)

The NLRB is an independent board that enforces provisions in the National Labor Relations Act (NLRA). The House committee bill would decrease funding for the NLRB by $59 million (-21.6%), while the Senate committee bill would provide the same amount as FY2016 ($274 million).⁸⁷ The House and Senate committee bills would each retain a provision from FY2016 that prohibits any funds appropriated to the NLRB in the bill, or any prior appropriations act, from being used to issue a directive or regulation to provide employees a means of voting through any electronic method in an election determining representation for collective bargaining. In addition, the House committee bill would

• prohibit any funds made available by the bill from being used to implement or enforce any rule that amends current regulations related to filing and processing petitions in collective bargaining procedures (§408 of H.R. 5926);
• prohibit any funds made available by the bill from being used to enforce the NLRA against any Indian tribe (§409 of H.R. 5926);
• prohibit any funds made available by the bill from being used to investigate, issue, enforce, or litigate any administrative action related to changing the interpretation or application of the "joint employer" standard in effect as of January 1, 2014 (§410 of H.R. 5926);⁸⁸ and
• prohibit any funds made available by the bill from being used in any way to change the standard for initial bargaining unit determination that differs from the standard set in a recent court decision (§411 of H.R. 5926).⁸⁹

Appendix. Budget Enforcement Activities

The framework for budget enforcement under the congressional budget process has both statutory and procedural elements.⁹⁰ The statutory elements include the discretionary spending limits and mandatory spending sequester derived from the Budget Control Act of 2011 (BCA; P.L. 112-25) and the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA; P.L. 99-177). The procedural elements are primarily associated with the budget resolution and limit both total discretionary spending and spending under the jurisdiction of each appropriations subcommittee.

Readers should note that budget enforcement requirements for FY2017 have been affected by the Bipartisan Budget Act of 2015 (P.L. 114-74), which was signed into law on November 2, 2015. Among other things, this law increased the statutory discretionary spending limits for FY2016 and FY2017, and extended the mandatory sequester to FY2025. The discussion below reflects these changes.

Budget Control Act and Sequestration

The BCA provides budget process mechanisms to reduce mandatory spending and further reduce discretionary spending over an extended period.⁹¹ For mandatory spending, reductions are to occur through sequestration in each of fiscal years between FY2013-FY2025.⁹² For discretionary spending, reductions occurred through sequestration in FY2013, but are to be achieved through lower discretionary spending limits for each of the fiscal years between FY2014-FY2021. The BCA does not call for sequestration of discretionary spending in FY2014-FY2021 unless one or both of the statutory discretionary spending limits (defense and nondefense) is breached. The LHHS bill only includes funding in the nondefense category.

FY2017

On February 9, 2016, concurrent with the release of the President's Budget, President Obama issued the required FY2017 sequestration order, calling for nonexempt mandatory spending to be reduced on October 1, 2016.⁹³ The Office of Management and Budget (OMB) estimated that the FY2017 sequestration percentages would equal 2% of nonexempt Medicare spending and 6.9% of other nonexempt nondefense mandatory spending, for a total reduction of $18 billion in FY2017.⁹⁴ (OMB also estimated a 9.1% reduction, totaling $728 million, in nonexempt defense mandatory spending, but this is not applicable to LHHS funds.)

The BCA does not require sequestration of discretionary spending in FY2017, unless one or both of the statutory discretionary spending limits is breached. As amended by the Bipartisan Budget Act of 2015 (P.L. 114-74), the FY2017 statutory spending limits are $551.068 billion for defense spending and $518.531 billion for nondefense spending, for a combined total of $1.070 trillion.

Cap Adjustments, Exemptions, and Special Rules

The BCA allows for certain adjustments to the discretionary spending limits for FY2012-FY2021. For LHHS, the most notable of these is for increases to the nondefense limit (up to a point) to accommodate new budget authority for specified program integrity initiatives at HHS and the Social Security Administration (SSA). The Bipartisan Budget Act of 2015 amended the list of SSA activities that may be covered by this "cap adjustment" to include costs associated with work-related continuing disability reviews, Cooperative Disability Investigations, and fraud prosecutions by U.S. Attorneys. The Bipartisan Budget Act of 2015 also revised the amount of the allowable SSA adjustment amounts to be more generous in FY2017-FY2019, but less generous in FY2021.⁹⁵

Separate from these cap adjustments, the 21^st Century Cures Act (Cures Act, P.L. 114-255), which was enacted on December 13, 2016, included additional budget enforcement procedures related to the discretionary spending limits. These procedures apply to two accounts within the scope of the LHHS bill: the NIH Innovation Account and the Account for the State Response to the Opioid Abuse Crisis.⁹⁶ The Cures Act created these accounts and authorized appropriations from them for specific fiscal years (FY2017-FY2026 for the NIH Innovation Account and FY2017-FY2018 for the Account for the State Response to the Opioid Abuse Crisis). The Cures Act further provided that subsequent discretionary appropriations from these accounts (up to the amounts authorized for each fiscal year) are to be subtracted from any cost estimates provided for purposes of budget controls. Effectively, this means that the appropriations from these accounts will not count against any spending limits, such as the statutory discretionary spending limits; that is, the amounts appropriated from these accounts will be considered to be outside those limits.

In addition, although sequestration largely consists of automatic, across-the-board spending reductions, the law exempts a limited number of programs from sequestration and subjects others to special rules. The LHHS bill contains several programs that are exempt from sequestration, including Medicaid, payments to health care trust funds, Supplemental Security Income, Special Benefits for Disabled Coal Miners, retirement pay and medical benefits for commissioned Public Health Service officers, foster care and adoption assistance, and certain family support payments. The LHHS bill also contains several programs that are subject to special rules under sequestration, such as unemployment compensation, certain student loans, health centers, and portions of Medicare.⁹⁷

Budget Resolution and 302(b) Suballocations

The procedural elements of budget enforcement generally stem from requirements under the Congressional Budget Act of 1974 (P.L. 93-44) that are associated with the adoption of an annual budget resolution. Through this process, the Appropriations Committee in each chamber receives a procedural limit on the total amount of discretionary budget authority for the upcoming fiscal year, referred to as a 302(a) allocation. The Appropriations Committee subsequently divides this allocation among its 12 subcommittees. These subcommittee-level spending limits are referred to as 302(b) suballocations. The 302(b) suballocations restrict the amount of budget authority available to each subcommittee for the agencies, projects, and activities under its jurisdiction, effectively acting as a cap on each of the 12 regular appropriations bills. Enforcement of the 302(a) allocation and 302(b) suballocations occurs through points of order.

The House and the Senate have not yet adopted a budget resolution for FY2017.⁹⁸ In its absence, the Senate Budget Committee chair has filed budgetary levels in the Congressional Record that are enforceable in the Senate as if they had been included in a budget resolution for FY2017.⁹⁹ Based on these levels, the Senate Appropriations Committee reported their initial 302(b) suballocations on April 18, 2016; these suballocations were subsequently revised on May 12, May 18, June 8, and June 26, 2016.¹⁰⁰ In the absence of a budget resolution in the House, the House Appropriations Committee has chosen to adopt "interim 302(b) suballocations" for the appropriations bills as those bills are marked up in full committee.¹⁰¹ These interim suballocations are not procedurally enforceable. An interim suballocation for the LHHS subcommittee was adopted by the House Appropriations Committee on the same day that the bill was ordered reported out of committee, on July 14, 2016.¹⁰²

Table A-1 displays the Senate FY2017 LHHS suballocation and the House interim suballocation along with comparable FY2016 appropriations. Under the current Senate suballocation, FY2017 discretionary LHHS appropriations would be reduced by $270 million compared to FY2016. The House interim suballocation assumes a reduction of $569 million. Both of these reductions are less than 1% of the FY2016 discretionary total for LHHS. Note that compliance with discretionary spending allocations is evaluated based on budget authority available in the current fiscal year, adjusted for scorekeeping by the Congressional Budget Office. As such, totals shown in this table may not be comparable to other totals shown in this report. Current-year budget authority totals exclude advance appropriations for future years, but include advance appropriations from prior years that become available in the current year. Advance appropriations are provided to selected LHHS accounts, generally in order to manage specific planning concerns and ensure continuity of operations at the start of a new fiscal year.

Current-Year Budget Authority

Table A-2 displays the total LHHS current-year budget authority, by title, as provided in FY2016 and the FY2017 House and Senate proposals. The amounts shown in this table reflect total budget authority available for obligation in the fiscal year, regardless of the year in which it was first appropriated.¹⁰³ (For a comparable table showing total budget authority in the bill, rather than current-year budget authority, see Table 2 in the body of this report.) As mentioned above, it is current-year budget authority (adjusted for scorekeeping by CBO) that is used to determine compliance with discretionary spending allocations.

Key Policy Staff