WASHINGTON – Congress is set to vote this week on a $1.16 trillion omnibus spending bill for the rest of fiscal 2017 that rejects most of President Trump’s proposed cuts.

The bill includes the 11 appropriations bills that were not passed individually and it must be approved before the latest continuing resolution expires Friday night. The measure contains funding through Sept. 30 for key transportation programs, clean and drinking water state revolving funds, and community development block grants (CDBG), as well as some health care funds for Puerto Rico. It does not withhold any funds for sanctuary cities and specifically blocks any funding for a border wall between the U.S. and Mexico.

Donald Trump
President Trump
Congress rejects many of Trump's proposals in $1.16 trillion spending bill for fiscal 2017.

President Trump, in late March, had sought almost $18 billion more in spending cuts for fiscal 2017 and would have eliminated funding for the popular Transportation Investment Generating Economic Recovery (TIGER) grant program and cut many other programs.

The bill agreed to late Sunday night provides $500 million for the TIGER program, the same level as in fiscal 2016. The funding is to remain available until the end of fiscal 2020. TIGER grants are often used in conjunction with tax-exempt bonds.

The measure provides states with the full allocations of highway and transit funding promised this year by the Fixing America’s Surface Transportation Act that was enacted in late 2015. The continuing resolution that kept the government functioning since last October had kept transportation frozen for the past seven months at the FAST Act’s levels for fiscal 2016.

The bill maintains the increases provided for in the FAST Act, including $43.2 billion for the federal highway aid program and $12 billion for public transit for fiscal 2017. Highway funding is $905 million more than in fiscal 2016 with transit receiving a $500 million increase.

Transit funding includes $9.7 billion of formula grants, an increase of $200 million from 2016. It also includes $2.4 billion of discretionary grants in fiscal 2017.

Rail projects with signed full-funding New Starts grant agreements with the Federal Transit Authority will receive $1.5 billion in fiscal 2017.

Another $285 million is set aside for projects expected to enter into full-funding agreements this year, including $125 million for Maryland’s $5.6 billion Purple Line rail project being financed as a public-private partnership.

Maryland was four days away from the formal signing of a $900 million, multiyear FTA grant for the Purple Line in August but the official ceremony was canceled when a federal judge halted work on the project to consider challenges in an environmental lawsuit. The FTA grant would have paid for about half of the project’s $2 billion construction costs. The project remains on hold.

The bill provides $407 million for small starts transit grants, including a streetcar in Tempe, Ariz., and an electric bus rapid transit system in Indianapolis.

Other transit funding includes a $100 million Core Capacity grant for an expansion of Chicago’s rail system that is covered by a signed funding agreement and $233 million for capacity projects expected to sign an agreement in fiscal 2017.

Trump proposed cutting $447 million from the New Starts grant program in fiscal 2017 and eliminating it for 2018, except for grants covered by an existing funding agreement. Eliminating the grant programs that provide 20% of federal transit funding would widen an existing $90 billion capital investment gap, Moody’s Investors Service said in a report released Monday.

If Trump's so-called “skinny” budget proposal for fiscal 2018 were enacted, mass transit systems would find it difficult to replace federal funds, most likely through higher fares or more state and local government subsidies, said Dan Seymour, a vice president at Moody’s.

"The federal government is the most important source of capital funding for mass transit enterprises in the US, and a most transit systems would be challenged to fully fund their programs with lower federal support,” Seymour said. “Many new projects likely would never proceed, and mass transit enterprises would struggle to fund ongoing expansions.”

The omnibus measure includes $323 million, with transfer authority of another $315 million, for the proposed new FBI headquarters in the Washington suburbs that is likely to be financed as a P3.

The measure contains $3 billion for the CDBG program, the same level as the last fiscal year. State and local groups have pushed hard for funding for the 43-year old program, which allocates funds to more than 7,000 urban, suburban and rural communities on a formula basis for a wide variety of projects, including infrastructure development and affordable housing.

The legislation includes $2.3 billion for clean water and drinking water state revolving funds, the same level as fiscal 2016. It also includes an additional $10 million for the Water Infrastructure Finance and Innovation (WIFIA) program

Puerto Rico will get $295.9 million for Medicaid under the bill. Resident Commissioner Jenniffer González-Colón, Puerto Rico’s nonvoting member of Congress, said this will cover Medicaid allotments up to June of fiscal 2018.

The measure provides $1.6 billion for the Securities and Exchange Commission, which freezes the commission at the fiscal 2016 level and is $176 million below the president’s budget request. It focuses funding on critical information technology initiatives and the SEC’s economic division, rescinding $25 million from the commission’s “reserve fund.” Republicans claim the reserve fund is a “slush fund” created under the Dodd-Frank Act that the SEC can spend without congressional oversight.

The Internal Revenue Service is provided $11.2 billion under the bill, the same level as for fiscal 2016 and $1 billion below Trump’s budget request. This will keep the IRS’ budget to below the 2008 level. The bill contains a number of prohibitions related to targeting certain groups and individuals for scrutiny of tax-exempt status and requests extensive reporting on IRS spending.

The measure also provides a $756 million federal payment to the District of Columbia, $26 million above the fiscal 2016 level.

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