Funding Deal Struck: House and Senate Leaders Take First Step Towards Avoiding Government Shutdown

On Sunday, House and Senate leaders took the first step to avoiding a government shutdown by reaching an agreement to fund the federal government for the rest of fiscal year (FY) 2024. This agreement includes a total of $1.66 trillion for discretionary spending in FY 2024. The spending is divided into $886.3 billion for defense and $772.7 billion for domestic discretionary spending. This allocation adheres to the previous deal between President Biden and then-Speaker Kevin McCarthy, which included a $69 billion side deal for non-defense discretionary funding to keep those accounts whole.

Under the agreement, the defense budget will receive a 3 percent funding increase, while non-defense budgets are set to remain roughly flat, representing a less than 1 percent decrease from the current funding. Notably, the deal includes a rescission of $6.1 billion in coronavirus emergency spending authority and accelerates cuts from the $80 billion originally allocated to the Internal Revenue Service under the 2022 Inflation Reduction Act, reducing it by $20 billion this year.

Responses to the bill are varied. Democrats are satisfied with the preservation of non-defense programs, particularly the inclusion of the $69 billion side deal that House Republicans still need to agree to. However, the Freedom Caucus and other Republicans are advocating for spending levels to return to pre-pandemic amounts and are pushing for conservative policy amendments. These include restrictions on abortion and provisions that reduce illegal immigration.

Despite this progress, the challenge remains for Congress to act swiftly. Essential funding for departments like Agriculture, Transportation, Energy, and Veterans Affairs expires on January 19, and funding for the rest of the government, including federal science agencies and other domestic programs, runs out on February 2. A shutdown remains a possibility, with complex policy issues such as GOP border reforms and Biden’s separate request for over $100 billion to aid Ukraine, Israel, and Taiwan needing resolution, which House Republicans are currently positioning a hard line on.

While the agreement signifies a step forward, significant hurdles remain. As Senator Susan Collins (R-ME) aptly puts, “We must avoid a shutdown, but Congress now faces the challenge of having only 12 days to negotiate and write language, secure passage by both chambers, and get the first four appropriations bills signed into law.” It is all but certain that Congress will need to enact a short-term continuing resolution (CR) to allow time to complete the bills, with rumors suggesting March as a potential new deadline.

To stay abreast with all appropriation developments, make sure to follow COSSA’s Congressional News.


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