Congressional Climate Camp #1: Budget, Appropriations, and Stimulus

Congressional Climate Camps
Find out more about the briefings in this series below:
Part 1	Budget, Appropriations, and Stimulus
Part 2	Federal Policies for High Emitting Sectors
Part 3	Lessons Learned from Past Congresses and Current Attitudes on Climate
Part 4	Federal Policy for Mitigation and Adaptation Win-Wins
Part 5	Understanding Budget Reconciliation

The Environmental and Energy Study Institute (EESI) is holding a Climate Camp online briefing series. We are going over the basics of the legislative process, highlighting key areas and opportunities for achieving near-term and long-term carbon reductions through policy.

Our first session brought you up to speed on the budget and appropriations process already underway for fiscal year 2022. Presenters drew on examples of funding for climate, energy, and environment programs to bring the process to life and show how it plays out in practice. Then, the session dived into how stimulus packages take shape, the role of climate action in stimulus, and what to expect in the upcoming months as the new administration and the 117th Congress work to address the ongoing impacts of the COVID-19 pandemic.

Click below to go straight to the different highlights and sections. 

Nuts and Bolts of Budget and Appropriations with Corrie Clark

On the Ground with Budget and Appropriations with Franz Wuerfmannsdobler

What You Need to Know About Stimulus with Karen Wayland

Catch up with this briefing with the corresponding podcast episode! We distilled the 2-hour event into just 24 minutes, perfect for people who missed the briefing but still want to catch up with it on the go! Listen to the episode here.

HIGHLIGHTS

Nuts and Bolts of Budget and Appropriations

Corrie Clark, Energy Policy Analyst, Congressional Research Service

• The annual appropriations process begins with the president submitting the annual budget, which recommends spending levels for federal programs and agencies. This usually happens on or before the first Monday in February, but budget submissions are often delayed, particularly in presidential transition years.
• Each agency provides additional detailed justification materials to appropriations subcommittees with jurisdiction over its funding. Each chamber then adopts a budget resolution that establishes overall budgetary and fiscal policy to be carried out through subsequent legislation [the resolutions can differ between the two chambers, and they are not signed into law].
• As required by the Congressional Budget Act of 1974, the House and Senate appropriations committees receive allocations for the upcoming fiscal year based on each chamber’s resolution. Once they receive their spending ceilings, they then separately provide spending limits to their respective subcommittees.
• Appropriations subcommittees hold hearings on segments of the budget under their jurisdiction and can solicit requests from members of Congress for language to be included in the appropriations bills or the committee reports. House and Senate subcommittees then report their suballocations to their respective full appropriations committees.
• Reports that accompany appropriations bills provide more specifics and direction to agencies for where and how funding should be spent.
• Congress then considers the appropriations measures. Omnibus appropriations measures may occur when several appropriations bills get combined into a single legislative vehicle prior to enactment. If the process is not complete by the start of the fiscal year on October 1, then Congress may need to enact a joint resolution (known as a continuing resolution) to provide temporary funding authority and prevent funding gaps that could cause agencies to cease certain activities.
• The House and Senate generally designate a conference committee to resolve differences between the two chambers before the overall budget goes to the president, who then has 10 days to sign or veto the measure.
• The FY2021 budget for Energy and Water Development totaled $49.5 billion, which provides funding for the Department of Energy (DOE), civil works projects as part of the U.S. Army Corps of Engineers, the Department of Interior’s Bureau of Reclamation and Central Utah Project, and a number of different independent agencies, including the Nuclear Regulatory Commission and the Appalachian Regional Commission.
  • DOE typically accounts for 80 percent of the funds, which cover the maintenance and enhancement of nuclear weapon stockpiles, management of complex environmental projects that address historical contamination from weapons development, and applied energy research, development, demonstration, and deployment (RDD&D).
  • The FY2021 enacted budget for energy efficiency and renewable energy (EERE) was $2.862 billion, most of which funded R&D projects in sustainable transportation, renewable energy, and energy efficiency. EERE also included grants to states and territories for weatherization assistance and state energy programs.
  • Title VI of the House-passed bill also included $44 billion in emergency funding, which was intended to support the economic recovery from the pandemic.
• Several select EERE funding issues drew particular attention during FY2021 [the budget proposed by the Trump Administration at the beginning of 2020]:
  • The FY2021 budget proposed to terminate the Weatherization Assistance Program, which funds energy efficiency improvements for low-income housing units, as well as the State Energy Program, which helps states plan and implement their energy programs. However, the Consolidated Appropriations Act (2021) included funding increases for these two programs.
  • The budget also proposed to reduce energy research and development (R&D), including some EERE programs, but the Consolidated Appropriations Act maintained nearly level funding for energy R&D.
  • Renewable energy grid integration and storage initiatives were priority issues, and the Consolidated Appropriations Act recommended $40 million to be provided from across renewable energy programs to support such initiatives.

Q&A

When it comes to bills and reports, what function do reports play in appropriations recommendations?

• Clark: Reports walk through each item that is highlighted in the bill and expands upon it. The Energy and Water Development Agencies’ report breaks down not just what sustainable transportation entails and what Congress’s priorities are, but also the subprograms within each area and the recommendations for spending levels within those subprograms. The report recommendations act as a guide, providing further direction on the areas that Congress thinks agencies should focus on.

Where can staffers and policymakers find resources, information, and analysis on energy, environmental, and climate issues across the entire spectrum of appropriations?

• Clark: There are many Congressional Research Service specialists and analysts who work closely on appropriations bills and track them at each of the legislative stages. Their work can be found on the Congressional Research Service website. Additional resources, including appropriation trackers, bills, and reports, are available to Members of Congress and their staff.

What is the relationship between a continuing resolution (CR) and the regular appropriations bill?

• Clark: The CR is like a stopgap. It is a mechanism that allows agencies to continue their operations while the rest of the appropriations bills are making their way through the legislative process and the chambers are trying to come to an agreement.

What happens after Congress appropriates the budget? How final is the budget and report language, and what level of spending discretion is there?

• Clark: The agency has the authority to spend to the level that Congress has directed them to. If they do not spend to that level or want to rescind certain funds, then they have to make a request that Congress can approve or reject. Oftentimes, the numbers may account for different sorts of recessions or budget adjustments. Sometimes the numbers will vary as the process continues: for example, the president can modify the budget request, which may lead to subsequent adjustments.

On the Ground with Budget and Appropriations

Franz Wuerfmannsdobler, Senior Advisor, Bipartisan Policy Center; previously staffer for U.S. Senators Robert Byrd (W. Va.), Byron Dorgan (N.D.), and Chris Coons (Del.); previously Professional Staff, Senate Appropriations Committee

• Both chambers have a Budget Committee and an Appropriations Committee (the two budget committees have parallel jurisdictions, as do the two appropriations committees). [The Budget Committees develop budget resolutions that serve as the framework for spending, revenue, and debt-limit legislation. The Appropriations Committees regulate the federal government’s expenditures.]
• Most of the authorizing committees in the House and Senate do not have the same jurisdiction. For instance, the Senate has the Energy and Natural Resources Committee, but the House splits those issue areas across two different committees: the House Natural Resources Committee and the House Energy and Commerce Committee.
• The budget and appropriations process is critical to Congress’s role and its engagement with the administration. Each appropriations subcommittee has a lot of power and covers different jurisdictions.
• Key points to understand include:
  • 302(a) and 302(b): 302(a) is the budget committee allocation to the appropriations committee for discretionary spending and 302(b) is the division of discretionary spending among the 12 sub-committees.
  • Subcommittee jurisdictions: They have a lot of power, and you can think about them like 12 siblings—they get an allowance, specific chores, and they all have distinct personalities.
  • Mandatory versus discretionary spending [Mandatory spending is not set by annual appropriations and is spending on entitlement programs, while discretionary spending is managed through the annual appropriations process and covers all other federal programs (e.g., defense, energy, transportation, education).]
  • Defense and nondefense levels [Defense discretionary spending makes up a significant portion of annual appropriations dollars. Nondefense discretionary spending includes most other federal activities (e.g., energy, transportation, education, homeland security).]

Q&A

What are some of the elements that make the federal appropriations process unique and challenging from your perspective? Are there any issues we should be aware of as the 117th Congress gets started?

• Wuerfmannsdobler: The current budget and appropriations system stems from the Budget and Impoundment Control Act of 1974. For the past 10 fiscal years, the Budget Control Act of 2011 was in place, which meant that there were budget caps in place. For FY2022 (the upcoming fiscal year budget that Congress is working on), the original system (i.e., without the Budget Control Act) is back in place.
• Appropriations is an item that requires bipartisan cooperation. Much of the mission of the federal government happens through the appropriations process.
• Part of the challenge is that the oversight process and the authorizing process has not worked so well. Because appropriation is a must pass process, a lot of issues get pushed into that cycle. There are political divisions and partisan issues, and it will be important to try to overcome these challenges for the upcoming fiscal year.

Since you have experience working for multiple members of Congress, in your opinion, what should a staff person be thinking about right now to prepare themselves for the upcoming budget and appropriations process?

• Wuerfmannsdobler: Identify the system that your office has set up to receive input and make recommendations. Through fly-ins, you can hear from a lot of your constituents who will identify issues that are most important to them. Working with your state or district staff is extremely beneficial: they have a lot of input, know what is happening on the ground, and can help identify your member’s priorities. Member offices often put some sort of form on their website to receive information from outside groups, which goes into formulating their member requests. Be aware of what the status of the calendar is, such as whether there are delays in budget submissions or oversight hearings. Many offices make funding requests, report language requests for guidance or direction, and in some cases, bill language requests. There are ways to engage in appropriations even if your member is not on the committee, such as submitting individual member letters to the committee or signing onto multi-member letters.

Do you have any suggestions for both Hill staffers and outside stakeholder groups on tips and tricks to be aware of and utilize when engaging in this process?

• Wuerfmannsdobler: Know how your office works best, and be organized and prepared in order to receive, process, and deliberate over incoming information. Understand your member’s particular interests, and consider how messaging and context come across to audiences. For example, the Weatherization Assistance Program and the State Energy Program are important, longstanding programs that have many climate benefits, but they do not necessarily have to be defined as climate programs. You can frame these programs through the lens of energy, supply chain, workforce, or equity issues.

Looking back on your Senate service, do you have any stories or experiences that stick out as noteworthy or something that Hill staff members should take away from your experience?

• Wuerfmannsdobler: One of the key points that I definitely took away was the 2009 American Recovery and Reinvestment Act (ARRA). I had the opportunity to be on the Appropriations Committee as we were coming out of the 2008 financial crisis. There were a lot of conversations about how to stimulate the economy then. In 2005 and 2007, Congress passed two major energy bills that provided a lot of guidance for the energy portion of what became ARRA. One key takeaway, which can provide a little guidance as we navigate the pandemic and its associated challenges, is that stimulus legislation is supposed to be a shot in the arm. It is difficult to enact brand new programs through stimulus efforts, so it is critical to consider existing tools to help push through funding.

At times, the members you worked for were in the majority and at other times, they were in the minority. How did that change your member’s perspective and your approach to working with subcommittees?

• Wuerfmannsdobler: There is a difference if you are in the minority or majority, but valuing bipartisanship can go a long way. The Appropriations Committee itself works in a very bipartisan way: it may not always be unanimous, but the committee works to build consensus and ensure that committee members are in as much agreement as possible.

 

What You Need to Know About Stimulus

Dr. Karen Wayland, CEO, kW Energy Strategies; previously Executive Director, Clean Energy Project NV; previously Senior Advisor to the Deputy Secretary, U.S. Department of Energy

• When talking about stimulus spending, it is important to distinguish between relief and stimulus: relief funding supports people affected by the crisis, while stimulus spending increases economic activity by providing incentives for people to increase their spending and businesses to increase investment and create jobs.
  • Four major packages focusing on relief and rescue funding were passed last year in response to the COVID-19 crisis: the Coronavirus Preparedness and Response Supplemental Appropriations Act (2020), Families First Coronavirus Response Act (2020), Coronavirus Aid, Relief, and Economic Security Act (CARES Act, 2020), and the Paycheck Protection Program and Health Care Enhancement Act (2020).
• Stimulus funding has to be timely, targeted, and temporary. We need to focus on the most vulnerable and affected sectors and employees, and going through existing programs can ensure that funding moves quickly. Making the stimulus temporary is important: we do not want to create a situation where a bill ends up enacting permanent tax credits or appropriations increases, which could create long-term debt or raise interest rates.
• A stimulus package should include funding for state and local governments, which can be powerful delivery mechanisms for stimulus money. State agencies can effectively distribute federal funds and deliver them with locally appropriate outcomes. Many states cannot engage in deficit spending, so federal funding can critically support state investments, infrastructure, buildings, and other sectors that have traditionally received state funding.
• The 2009 American Recovery and Reinvestment Act (ARRA) is one of the largest packages that Congress has ever passed, amounting to $831 billion in tax cuts and direct spending. Ninety-two percent of the total appropriated funds had to be spent within three years, which kept the stimulus temporary. The results contributed to a GDP growth of 3.8 percent after a fall of 6.7 percent.
• A $90 billion investment in clean energy in 2009 generated 790,000 million job years [a job year is one job for one year]. If Congress directed about $99 billion towards clean energy investments, which is only $9 billion more than the $90 billion in ARRA, we could generate a total of 4.3 million job years. ARRA also provided a number of resources for states, which can be a reference point when crafting the upcoming stimulus package.
• ARRA was able to advance climate policy objectives without including new authorizations: for example, it directed $3.4 billion of additional federal funding to smart grid investments. This helped leverage private investments, for a total value of $8 billion.
  • Grant projects spanned electric transmission and distribution technologies, customer systems, equipment manufacturing, advanced metering infrastructure (AMI), and integrated systems. Project awards through the matching grants program included $100,000 to $20 million for phasor measurement unit (PMU) projects, which can provide quick, synchronized, and accurate measurements for monitoring power grids.
  • Funding mainly went to utilities and grid technology deployment: in 2009, $185 million of federal matching funds supported energy storage projects valued at $771 million and helped create 538 MW of new energy storage. These deployed technologies included 1,300 PMUs and over 16.6 million AMIs, which increased grid resilience. Smart relays can automatically sense and recover from faults in the substation, and automated feeder switches can reroute power around problems.

Q&A

What should Hill staffers be thinking about in preparation for the expected stimulus package?

• Wayland: Use existing programs to get the money out the door. The stimulus package is not the ideal place to put in new things since authorizations take time. We will likely see movement on a stimulus package sometime this summer or later, which is good because we cannot physically go back to work right now because the pandemic is on-going. It will take time for agencies to bring in staff with a strong understanding of funding processes to effectively move money out the door.

How do we make sure that a stimulus package is accessible to state and local governments that may not have the capacity or resources to take advantage of it?

• Wayland: In my time at the Department of Energy, we developed a single page for technical assistance with a request form, and we would regularly gather all the different offices and their technical assistance program staff to coordinate state requests. Agencies can set up a similar system to track incoming state requests and proactively reach out to states to not only let them know about available opportunities, but also help the state identify projects and applications to put forward.

What should Hill staffers consider to advance equity and critical environmental justice goals through stimulus?

• Wayland: Equity discussions should happen at the very beginning, as the bills are being written. The Biden Administration has made a commitment that 40 percent of the benefits will go to frontline and disadvantaged communities. Agencies need to address definitional issues by defining exactly which communities they want to target, and they need to consider how funding criteria affects those communities.

What areas and topics in energy and environment should policymakers have at the front of their minds when they are designing a stimulus package?

• Wayland: A lot can be done in the energy and environment space, particularly with energy efficiency. When you think about the multiplier and number of jobs that can be created, the highest multipliers are in the energy efficiency investments [the multiplier determines the increase in GDP caused by government spending]. These can create construction and union jobs that are often high-paying. Energy efficiency investments can generate a lot of economic stimulus and can be done fairly quickly as money can go out through existing programs. A lot can also be done through transportation and built infrastructure that can address climate and clean energy goals, pollution, and equity issues.

How do you think the upcoming stimulus package will take shape? What are your thoughts and speculations on the direction of where stimulation can go?

• Wayland: I think we can go higher than $99 billion in the energy space. President Biden has a plan for a $2 trillion investment in a climate package. In the current context—when you add up all of the COVID relief—it is going to be less than that. Any kind of proposal for infrastructure spending is coming on the heels of rescue bills. Pivoting to austerity will slow the economy, so it is critical to put out a timely, targeted, and temporary stimulus package sometime this year.

Highlights compiled by Celine Yang