Inside (the Beltway) Scoop

By: Ellen Kuo
Wednesday, September 11, 2024

Congress Returns to Pass a Continuing Resolution
Finishing the FY 2025 spending bills is top of mind as members of Congress return from their summer recess before leaving again on September 27 to hit the campaign trails. The Senate has yet to bring any of its spending bills to the floor. The House struggled to pass five of them on the floor with the Labor, Health and Human Services, Education and Related Agencies and Commerce, Justice, Science bills not brought to the floor. Congress is, therefore, likely to pass a continuing resolution (CR) to fund the government and return after November 5, Election Day. Depending on the election outcome, the 118th Congress may pass another CR that goes into March 28 and allow the new president to complete the spending bills in the 119th Congress (which runs from January 3, 2025, to January 3, 2027).

The Fiscal Responsibility Act (FRA) comes into play too. This law was designed to incentivize Congress to enact regular, full-year appropriations legislation instead of relying on short-term CRs. Under the FRA, a 1 percent increase to the caps for defense ($886 billion) and nondefense ($704 billion) for FY 2025 is allowed. Therefore, total base discretionary funding for FY 2025 would be $1.61 trillion ($895 billion for defense and $711 billion in nondefense). However, there will likely be an increase in the caps as members figure out how to adopt side deals to bump up total funding as they finalize 2025 spending. Adjustments to the discretionary caps for FY 2025 in the case of a CR means that if a CR is in effect on January 1, 2025, for any budget account, the discretionary spending limits for that FY 2025 are automatically revised to the levels of $850 billion for defense and $736 billion for nondefense. The revision would result in an increase in nondefense discretionary budget authority and a decrease for defense discretionary spending levels. A sequester would be issued on April 30, 2025. However, if a full-year appropriations package is completed before April 30, then the limits revert to the original FRA limits with no sequester.

A delay in completing FY 2025 spending bills means federal agencies will not be able to move forward on grant awards for FY 2025 and grant recipients may have to discontinue their activities or find other funding sources until they receive the FY 2025 funding. Agency hiring plans are also delayed.

Additionally, the Office of Management and Budget released a list of special requests (called anomalies) for inclusion in a stopgap funding bill. These are deviations in the duration, amount, and alternations of purposes for which funding is expended for specific agencies/programs instead of a straightforward extension of current funding levels. There was also a separate list of authorization requests for Congress’ possible consideration in the upcoming CR, allowing legislators to exercise their constitutional prerogative to provide appropriations as they see fit even as part of a short term funding bill.