The House and Senate are preparing for a pitched battle over federal spending with just three months before lawmakers hit the September 30 deadline to fund the government.
But as lawmakers race to pass their 12 annual appropriations bills, a departure from years of last-minute omnibuses, Washington appears ready to revert back to old habits and kick the can down the road and pass a stopgap measure until the end of the year.
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Congress is notorious for extending government funding to December, forcing a budget showdown ahead of the holiday recess. That showdown could still happen before October 1, the start of the new fiscal year. But the addition of a simple provision in the debt ceiling compromise brokered last month has lawmakers even more likely to consider a year-end fight.
The Senate Appropriations Committee approved the top lines for its 2024 spending bills last week, setting them in line with the caps laid out in the Fiscal Responsibility Act negotiated by President Joe Biden and House Speaker Kevin McCarthy (R-CA).
The move set up a clash with the GOP-led House, which as a concession to the conservative Freedom Caucus intends to draft its spending bills $120 billion below those numbers. Five of the eight appropriations bills released by the House panel are set to spend less than fiscal 2022, and two are written to spend less than 2019.
If the two sides cannot come to an agreement by the end of September, Washington risks a government shutdown. The debt ceiling law, however, gives lawmakers until the end of the year to pass their appropriations bills before a 1%, across-the-board cut takes effect. With that built-in buffer, meant to incentivize them to pass the spending bills, Congress appears ready to once again pass a short-term continuing resolution to delay the budget fight.
“The real deadline is Jan. 1,” Rep. Tom Cole (R-OK), a senior Republican appropriator, told Politico. “Real deadlines, with real teeth, sometimes actually get people moving around here.”
McCarthy agreed to draft spending levels below his agreement with the White House following a rebellion on the House floor by hard-line conservatives. The lawmakers, mostly members of the Freedom Caucus, hold outsize sway in the 118th Congress given Republicans’ narrow, five-seat House majority.
But the concession puts him squarely at odds with the White House and Senate Democrats, who accuse him of “reneging” on the debt ceiling compromise, which enacted modest spending cuts in exchange for a hike in the federal borrowing limit. With default off the table, Washington avoided a fiscal crisis last month that could have damaged the U.S. economy. But now, lawmakers are gearing up for a repeat of that budget fight.
Lawmakers in both chambers are facing a tough timeline to pass their appropriations bills in time for the September 30 deadline. They will be back in their districts for the July 4th recess and will also be gone the entire month of August. The time crunch has lawmakers worried they will not be able to get all of the appropriations bills done in time.
“The chance of passing all the appropriation bills where the House and Senate agree on numbers is almost zero,” said Sen. Lindsey Graham (R-SC), a member of the Senate Appropriations Committee.
Sen. John Kennedy (R-LA), another committee member, reiterated his concern last week.
“We’re heading toward trouble. OK? That’s clear,” he said.
Senate Democrats, too, acknowledge that the spending fight likely won’t be resolved by September 30. “The calendar year is really the fiscal year up here,” said Sen. Tim Kaine (D-VA), speaking with Politico.
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But the 1% cut is providing additional incentive for lawmakers not to go past the January 1 deadline.
“We simply cannot allow those indiscriminate cuts to be triggered,” said Sen. Susan Collins (R-ME), the ranking member of the Appropriations Committee, during last week’s markup.
