WASHINGTON – President Obama is threatening to veto legislation approved by the House that would effectively block the District of Columbia from achieving budget autonomy and home rule.
The House passed the Clarifying Congressional Intent in Providing for DC Home Rule Act of 2016 (H.R. 5233), which repeals D.C.'s Local Budget Autonomy Act of 2012 and amends its Home Rule Act of 1973 to clarify that district funds are subject to congressional approval.
The bill, introduced earlier this month by Rep. Mark Meadows, R-N.C., chairman of the House Oversight and Government Reform Committee's government operations panel, was passed by a House vote of 240-179. Federal law currently states D.C.'s annual budget must pass a two-thirds council vote as well as an appropriation passed by Congress and signed off by the president.
Meadows' bill came in response to District of Columbia Mayor Muriel Bowser's proposed $13 billion budget for fiscal 2017, which would be the first in which the district tried to obtain control over spending its own tax-generated money, or 90% of its budget. Bowser, a Democrat, last month also called for a November vote by residents to petition Congress to make the district the country's 51st state.
But the Republican-led Congress will not likely support that since statehood for the liberal enclave would mean adding Democrats to Congress.
But President Obama has threatened to veto any measure that would impede the district's push for home rule and the ability to spend its own local taxes and non-federal funds without federal approval.
"Subjecting the district to the lengthy and uncertain congressional appropriations process for its use of local tax collections imposes both operational and financial hardships on the district," administration officials said in an Office of Management and Budget policy statement issued Tuesday. "The administration is disappointed that the Congress has failed to provide elected leaders in the nation's capital the most basic authority to spend local tax collections without congressional approval."
Meadows warned of possible federal criminal charges against district employees should the budget be passed without final congressional approval. The House Oversight and Government Reform Committee, which has authority over the D.C. budget, approved the legislation in a 22-14 vote on May 17 before it moved to the full House.
The House Appropriations Committee's fiscal 2017 financial services bill includes a $725 million federal payment to D.C., which is $4.6 million less than the fiscal 2016 enacted level and $38 million below this year's request. In a summary of the bill, House officials said the federal payment would be used for public safety and security costs, as well as other essential services.
The passage of the bill on D.C. drew stern condemnation from Democrats, who have supported D.C. home rule and budget autonomy.
Senate Minority Leader Harry Reid, D-Nev., argued in favor of fiscal independence and statehood for the district, which boasts a population greater than that of Wyoming and Vermont.
"The 700,000 people living in the nation's capital should have a say in their own future," Reid said. "It is beyond hypocritical for congressional Republicans…to decide that they are best suited to exert their budgetary will over the District of Columbia."
If passed by Congress the D.C. legislation would effectively render moot the ruling by a District of Columbia Superior Court judge in March that the Local Budget Autonomy Act is lawful under district law. The ruling would permit D.C. to only ask Congress for federal funds, which is only 10% of its budget. It also removes Congress and the president from having to sign off on the appropriation of the district's own funds.
Until the D.C. bill is passed by both the House and Senate and signed by the president, Bowser said she would go ahead with her autonomous budget for fiscal 2017. "The American people expect their congressional representatives to focus on the issues affecting our nation – safety and security, fair wages, and growing the middle class – not on the local budget of DC," Bowser said.
Rep. Eleanor Holmes Norton, the district's non-voting delegate and a member of the subcommittee, argued that budget autonomy would improve D.C.'s borrowing costs, improve agency operations and eliminate the possibility of government shutdowns.
Norton introduced an amendment to the bill earlier this month that would grant the district autonomy by an act of Congress, but that was rejected by the committee.
She added that D.C.'s budget is larger than that of 14 states and the district collects more federal taxes from residents than 22 states.
"Budget autonomy is the law of the land with a court order behind it," Norton tweeted following the House vote. "D.C. officials have no alternative."
Hillary Clinton, the likely Democratic presidential nominee, has supported D.C. statehood, as has Rep. Gerry Connolly, D-Va., the subcommittee's top Democrat.
Republicans, on the other hand, lauded the House vote that serves as a major roadblock for Democrats.
House Speaker Paul Ryan, R-Wis., said Wednesday the district government is "running fast and loose" with the Constitution. In a statement, Ryan framed the showdown as "The Constitution vs. D.C. Council," and said there were "real consequences" for attempting to pass a budget without the approval of Congress.
"The current D.C. government needs to be reined in," Ryan said. "We will not allow Congress and the Constitution to be undermined."
Rep. Jason Chaffetz, R-Utah, chairman of the oversight and government reform subcommittee, said the bill would protect D.C. employees from any such criminal or administrative penalties.
"H.R. 5233 will make clear the Local Budget Autonomy Act of 2012 is not legally valid and will ensure the congressional intent behind the Home Rule Act is preserved," Chaffetz said.
The Home Rule Act gives the district the power to raise local revenues for the city, but the way the money is spent is subject to congressional approval.
If the bill is enacted, it will call into question a lawsuit still pending in U.S. District Court for the District of Columbia that alleges the budget autonomy act violates a provision of the Home Rule Act stating no district funds can be expended by the district unless approved by Congress. That suit, filed in November by political watchdog group Judicial Watch on behalf of district taxpayer Clarice Feldman, is still pending.
While Jeffrey DeWitt, the district's chief financial officer, has called for the suit to be dismissed, the House of Representative's bipartisan Legal Advisory Group has urged a judge to deny that dismissal. The House Appropriations Committee's $21.7 billion 2017 financial services bill also provides $10.9 billion for the Internal Revenue Service, a $236 million cut from fiscal 2016, and $1.3 billion below President Obama's request. In addition, it provides $1.5 billion in federal funding for the Securities and Exchange Commission, which is $50 million below the fiscal 2016 enacted level and $226 million lower than President Obama's request.
