House Speaker Paul Ryan reached a deal late Tuesday on two major pieces of legislation: a $1.1 trillion spending package and a $629 billion package of tax breaks.
The $1.1 trillion spending bill includes $548 billion in defense spending, $518 billion in non-defense spending, and $73.7 billion in additional funds for the Pentagon for ongoing combat operations.
The package is made up of the 12 annual spending bills, which have been bundled into one "omnibus" spending deal that provides funding for the next fiscal year, through Sept. 30, 2016.
Democrats had the upper hand in spending talks because their votes will supply the bulk of support to pass it. They successfully swatted down Republican efforts to effectively block Syrian refugees from entering the U.S., defund Planned Parenthood, undo President Obama's environmental regulations and repeal a campaign finance law.
The spending package includes two notable "riders" or unrelated policy provisions tucked into the must-pass bill.
The first overhauls the visa-waiver program, which allows foreign travelers from 38 nations to make short trips to the U.S. without a visa. The provision includes an added layer of security screening for those travelers if they have recently visited Iraq, Syria or other nations with significant terrorist activity. A stand-alone bill on the same provision passed the House with overwhelming bipartisan support last week.
The second provision ends the 40-year ban on exporting U.S. oil. The provision is a victory for Republicans, although many Democrats from oil-friendly states, like North Dakota Sen. Heidi Heitkamp, cheered its inclusion in the spending package.
Republicans rallied in support of the tax side of the deal. The package makes permanent many popular business tax breaks and delays new taxes on medical devices and high-end health insurance plans that are supposed to help pay for the Affordable Care Act. Many Democrats, particularly in the House, are expected to oppose the tax package, which will, in turn, rely on GOP votes for passage.
The House is scheduled to vote on the measures separately. The tax package will get a vote Thursday, while the spending package will get a vote Friday. The Senate is expected to then bundle the two packages together for a final vote before sending it to President Obama for his signature.
Here are some additional highlights from the spending bill:
-- A year delay on new menu labeling regulations for grocery stores and food retailers to give them more time to comply with new federal standards.
-- $282 million in additional funds for the Census Bureau to prepare for the 2020 census.
-- Extends the existing prohibition on the transfer or release of Guantanamo detainees into the U.S.
-- A 1 percent military pay raise and $300 million to address a military housing allowance shortfall.
-- $111 billion for new military equipment, including 68 F-35 Joint-Strike Fighters, 102 Black Hawk helicopters, 64 remanufactured Apache helicopters, 3 littoral combat ships, 2 attack submarines, 2 DDG-51 guided missile destroyers, 7 EA-18G Growlers, 5 F-18E/F Super Hornets and 12 KC-46 tankers.
-- It largely freezes funding levels for the Internal Revenue Service, which is receiving $1.7 billion less than President Obama originally wanted.
-- $45 million for school improvement in Washington, D.C., including $15 million for scholarships to low-income students in the District to attend private schools.
-- A pay freeze for Vice President Biden.
-- $1.9 billion for the U.S. Secret Service, which is an increase of $268 million above last year.
-- Cuts $15 million in spending for the Independent Payment Advisory Board, created under the Affordable Care Act.
-- An additional $2 billion in funds for the National Institutes of Health for a total of $32 billion.
-- An additional $175 million for a total of $5.6 billion for U.S. embassy security.
-- Zero funding for high-speed rail, but Amtrak grant funding holds at $1.4 billion with $50 million provided to improve rail safety.
Here are some additional highlights from the tax package:
-- It makes permanent the $1,000 child tax credit.
-- It makes permanent the American Opportunity tax credit, which helps pay for college. The credit is indexed to inflation and helps cover qualifying expenses in the first two years of post-secondary education.
-- It makes permanent the earned income tax credit for low- and moderate-income workers. For 2009 to 2017, the EITC is temporarily increased for those with three or more children.
-- It makes permanent a $250 deduction for elementary and secondary school teachers who pay out of pocket for school supplies.
-- It makes permanent the research and development tax credit.
-- It makes permanent a 20 percent employer wage credit for employees called to active military duty.
-- It extends through 2016 an expensing provision that covers up to $15 million of qualified film, television and live theater productions.
-- It extends through 2016 the $13.25 per proof gallon excise tax for Puerto Rican and U.S. Virgin Islands rum.
-- It extends through 2016 the 10 percent credit for plug-in electric motorcycles and two-wheeled vehicles, capped at $2,500.
-- It extends through 2016 the tax credit for manufacturers of qualifying energy-efficient residential homes.
-- A provision that allows an individual to exclude from gross income any payment received as compensation for a wrongful incarceration.
-- A provision defines hard cider for levying alcohol excise taxes as a beverage made from apples or pears, with an alcohol content of 0.5 to 8.5 percent and a carbonation level that does not exceed 6.4 grams per liter.
-- A provision prohibiting IRS employees from using personal email accounts to conduct any official business.
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