Fiscal Cliffhangers: The Battle Over FY2024 Spending and the Road to FY2025
Congress is yet again staring down the barrel of a government shutdown. With the upcoming deadlines to pass the necessary appropriations bills or a new Continuing Resolution looming, Congress must also contend with the approaching FY2025 appropriations process. Here is a look at where FY2024 appropriations stand and what it means for the next fiscal year.
Update on FY2024 Appropriations
Congress is just under one week away from the first of two shutdown dates; March 1st marks the deadline to pass Agriculture, Energy-Water, Military Construction-VA, and Transportation-HUD. The latest dispute in the months-long debate is a set of high-profile policy riders that Republicans demand to be included in the FY2024 spending bills. Issues including abortion, guns, and earmarks are now slowing down all progress, making the need for a continuing resolution certain. These delays continue to put Rep. Mike Johnson’s speakership in a precarious position as he continues to oppose stopgap funding. He is also facing pressure from Freedom Caucus members, who released a letter last week calling Johnson to defend these policy provisions and threatening to oppose any spending deal without his support.
Party leaders in both chambers understand that time is tight to get a deal together before March 1st. The House returns from its Presidents Day recess on Wednesday, and party leaders expect the chamber to move first on any spending package to help sway Senate GOP conservatives. It’s also clear that getting a CR through the Senate by March 1st would be very difficult minus a bipartisan, bicameral deal. This leaves Johnson with several decisions to make before a potential shutdown, including weighing the pros and cons of yet another short-term CR or letting the government partially close down. It will also be interesting to watch how the bills will be packaged; leadership has not said whether or not a potential deal will push back both deadlines or just the first package of bills.
State of Play for FY2025
The complicated and drawn-out process of FY2024 has put a serious strain on making any progress for FY2025. The FY 2025 appropriations process is expected to coincide with President Biden’s submission of his budget to Congress. If the 2025 appropriations bills hope to advance in a more timely manner than what we have seen over the last year with 2024 appropriations, Congress will likely have to continue passing CRs to jumpstart the process. The 2025 bills will also be heavily influenced by the outcome of the 2024 Presidential election in November and the political makeup of Congress. Historically, there has been some desire to wrap up appropriations work before a new Congress is sworn in. However, with the 2024 appropriations process still underway, it is unlikely that anything will be settled by January 2025.
Although some lawmakers have opened their applications for appropriations requests for 2025, getting the process officially underway will depend heavily on when the spending bills for 2024 are passed. Some offices, including Rep. Byron Donalds have had their appropriations requests for FY25 opened and closed. However some Congressional offices are not releasing their FY25 request portal until FY24 is completed so as to not confuse their constituents, including Senator Bob Casey and Rep. Vern Buchanan.
Next Steps
Lawmakers hope to unveil their government funding plans by the end of the weekend. Politico says any announcement could combine a small package of ready-to-move spending bills alongside a short stopgap for the rest of the fiscal 2024 measures. Sources have indicated that the House is expected to move first on the package.
Other issues that remain on the table include the Ukraine Supplemental that the Senate passed but now sits in the House with no indication that it will move soon. Also looming in the background is the failed border supplemental, aid to Israel, and the Senate taking up the House’s articles of impeachment against Homeland Security Secretary Alejandro Mayorkas. Another snag with funding the government could also potentially lead to Speak Johnson being ousted from his position, something the Republican party cannot afford before an election. Constitution Partners will continue monitoring the state of the FY2024 and FY2025 appropriations process and provide updates as they are available.