October 25, 2023
Ever wonder if members of Congress are living in the movie Groundhog Day?
Yet again, in a few short weeks, Congress will face the same choice it faces every year: fund the government, shut down the government, or kick the can down the road. Despite efforts to avoid this choice with a legislative process and significant planning, every October 1 when the new fiscal year starts Congress ends up in this same place.
In recent history, Congress has struggled to enact all of the annual appropriations bills on time, even when one political party controls both chambers of Congress and the White House. In fact, this has not happened since Congress completed the fiscal year 1997 process. To avoid a government shutdown, Congress passes temporary spending measures called continuing resolutions (CRs). With a handful of exceptions, CRs typically continue funding at prior year levels. Congress has enacted at least one CR in 44 of the 47 fiscal years since 1976 when the beginning of the fiscal year changed to October 1.
Why do we face this same challenge year after year?
The Constitution states, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” This "power of the purse” is given to Congress with all funding measures (otherwise known as appropriations bills) required to be originally drafted in the House of Representatives. Every January the President develops a budget proposal which is sent to Congress in February, except during a first-year presidency and if the previous spending measures were significantly delayed. The House and Senate Appropriations Committees and their 12 subcommittees then set spending caps and start to hold hearings to assess funding levels. Then markups occur where each subcommittee considers and amends its bill and passes it onto the full committee that does the same and passes it onto the floor. Once both the House and Senate have passed their bills, select members of the subcommittees conduct bicameral negotiations in conference committees to produce a final version that is then passed by each chamber.
With the fiscal year beginning on October 1, the goal is to complete all 12 bills before then. Despite all of the above systems established to move the appropriations process forward, failing to pass all 12 appropriations bills in each chamber has become the norm. With each member of Congress looking out for their own district, ideological differences, and politics ever present, negotiating final legislation is always tricky. Often it is minibus or omnibus legislation with several bills packaged together that usually passes Congress and is sent onto the President for signature.
How does advocacy fit into this?
However, there are several milestones throughout the process where advocates can shape the process and be valuable contributors to advancing better policies and allocating appropriate funding levels for various initiatives. From the President's budget proposal to the Community Project Funding or Congressional Directed Spending requests into individual members of Congress to the markup of each bill, people can share insights on how to direct spending. Insights supported by facts and statistics as well as personal stories that pertain to the home district or state of the member of Congress are most compelling. Inviting members of Congress for tours and in-person meetings also help educate them on key issues they are considering in these spending bills.
The FY24 Appropriations Process
So far, the current Congress has not been able to agree on a single FY2024 appropriations bill before October 1. The House and Senate have taken divergent approaches toward funding levels that is exacerbating the situation. The Democrat controlled Senate adopted the subcommittee top-line funding allocations on a party-line vote with only Democrats supporting this summer. However, by late July bipartisan support was garnered for the bills as they were passed by committee. The bills largely adhered to the budget caps set forth in the Fiscal Responsibility Act (FRA) that was enacted to ensure the debt ceiling extension through January 1, 2025. But the Senate honored all $69 billion in agreed-upon nondefense discretionary spending with adjustments outlined in side-deal handshake agreements in exchange for not adding new, partisan, nonbudgetary riders. Specifically, both Chair Patty Murray (D-WA) and Ranking Susan Collins (R-ME) agreed to add an additional $13.7 billion to discretionary funding, with $8 billion for defense and $5.7 billion for nondefense spending.
Meanwhile the Republican controlled House proposed significant cuts below the budget deal signed into law in May and passed most but not all appropriations bills (and with party-line votes). The House is side-stepping the FRA in three key ways:
(1) The 12 appropriations bills provide $58 billion less for ongoing nondefense programs than the levels agreed to in the debt limit deal—a 9% reduction—which would leave these programs at their lowest levels since at least 1962. This number is determined by including the offsetting that occurs at the end of each fiscal year based on the money the government through voluntary, market-like transactions, such as entrance fees to national parks and mortgage insurance receipts for Federal Housing Administration loans, and in FY24 roughly $8 billion less is expected so when couple with the $2 billion cut, that cuts $10 billion from ongoing programs compared to FY23. This also does not keep up with inflation.
(2) The bills rescind $115 billion of funding outside the jurisdiction of the House Appropriations Committee, significantly beyond the cuts agreed to in the debt limit deal.
(3) The bills include new, controversial, nonbudgetary “riders” although the Senate also includes policy riders so this is always a point of contention.
If Congress doesn’t pass all 12 bills by January 1, 2024, then a 1% across-the-board cut to every account—defense and nondefense—will occur. But this wouldn’t go into effect until April 30, 2024 and interestingly, would mean the nondefense programs would actually increase compared to the spending level included in the FRA debt limit law. Spending on nondefense programs would go from the $704 billion set in the debt limit law to $736 billion because the 1% across-the-board cut is determined by current funding levels. Meanwhile the funding level for defense programs would decrease if the 1% across-the-board cut goes into effect from the $886 billion the debt limit law sets to about $850 billion. Ironic disincentives to negotiate from some in Congress.
What’s Next
For now, we are living under a CR which will last until November 17. An additional challenge this year is the House of Representatives voted 216 to 210 to remove Rep. Kevin McCarthy (R-CA) from the Speaker position from which and partially due to how he negotiated the FRA budget caps. This ended 22 days of a paralyzed chamber where no appropriations bills or any legislation could be considered by committee or on the House floor. With new Speaker Mike Johnson (R-LA) elected by the Republican Caucus on October 25 with the plan of delaying completion of the FY24 appropriations process until January to April 2024 timeframe, it looks like further CRs and potential shutdowns are in the future. Meanwhile the Senate has passed its appropriations bills with entirely different numbers out of committee and none have passed out of the chamber.
And the Groundhog Day pattern continues. Check back with G2G for updates on the process and finishing the FY24 appropriations process. Sign up here to receive legislative updates.