January 12, 2024
New Year’s Resolution on FY 2024 Funding
Congress started 2024 with a new bipartisan, bicameral agreement on topline spending amounts, which looks very much like the previous agreement made last summer and is expected to face the same obstacles to passage.
Over the next week, congressional leaders will need to stick to their new year’s resolution and come together to chart a path forward, address the obstacles, and fund the government.
The agreement between House Speaker Mike Johnson (R-LA) and Senate Majority Leader Chuck Schumer (D-NY) sets total spending at $1.7 trillion, which allows for an $886 billion cap on defense spending and a $773 billion cap on non-defense spending. These spending levels are the same as those set in the Fiscal Responsibility Act last summer, plus the additional $69 billion in the “side deal” between President Biden and then-Speaker Kevin McCarthy (R-CA). The difference now is this additional funding is part of the agreement from which appropriators in the House and Senate hope to finalize spending bills.
Despite the new agreement, the obstacles to the finish line remain the same – votes and time.
The House and Senate majorities are fundamentally at odds and struggling to meet in the ideological middle to compromise on funding levels or policy provisions to get enough votes to agree on how to fund programs under the topline numbers. Johnson is pulled to the right by the Freedom Caucus for deeper cuts to spending, while Schumer is pulled to the left to oppose compromising down on funding levels. With the slim Republican majority in the House, Johnson will have to decide if he passes bills that appease the conservative base but that won’t pass the Senate or works with Democrats to pass bills that could reach final passage, risking his position as Speaker.
Time is not on their side. The government is currently running under a two-part continuing resolution (CR). The first CR expires January 19, while the second expires February 2. Pressure is already mounting from the Senate for a short-term CR to finalize the bills covered under the January 19 CR, which include Agriculture, Energy and Water, Military Construction - VA, and Transportation-HUD. Johnson has to decide if he’s going to allow another short-term CR, which he derided as part of his bid to be Speaker, or let part of the government shutdown on January 19.
The second CR expires February 2. This package includes the two biggest bills – Defense and Labor-HHS-Education – along with Commerce-Justice-Science, Financial Services, Homeland Security, Interior-Environment, Legislative Branch, and State-Foreign Operations. Even with an additional two weeks to finalize funding for this package, these bills each contain their own funding and policy issues that take time to reconcile between House and Senate appropriators.
The federal student aid programs are funded in the Labor-HHS-Education Appropriations bill, which is included in the second CR. Even with a new agreement on top line funding levels, appropriators have to work out the differences between House and Senate draft bills at the program level.
For student aid, this means the difference between a level Pell Grant maximum and the elimination of Supplemental Educational Opportunity Grants (SEOG) and Federal Work-Study (FWS) in the House bill, and a $250 increase in the Pell Grant maximum and a $10 million cut to both SEOG and FWS in the Senate bill. How these proposals are reconciled remains to be seen. Not knowing the Pell Grant maximum and funding levels for SEOG and FWS is putting additional pressure on campus financial aid offices that are simultaneously working through the chaos of the new FAFSA implementation.
In addition to votes and time, congressional leadership also faces the obstacle of legislative policy riders, which are often attached to spending bills by the majority party to send messages on key political issues. Senate Democrats have already thrown down the gauntlet in opposition to any House Republican “poison pill” riders.
Finally, there is bipartisan, bicameral interest in providing emergency supplemental funding for border security and foreign aid. The Senate has taken the lead on crafting a spending package that would provide funding to Ukraine, Israel, and Taiwan, and address growing needs on the U.S.-Mexico border.
Over the next week, congressional leaders will need to stick to their new year’s resolution and come together to chart a path forward, address the obstacles, and fund the government.
The agreement between House Speaker Mike Johnson (R-LA) and Senate Majority Leader Chuck Schumer (D-NY) sets total spending at $1.7 trillion, which allows for an $886 billion cap on defense spending and a $773 billion cap on non-defense spending. These spending levels are the same as those set in the Fiscal Responsibility Act last summer, plus the additional $69 billion in the “side deal” between President Biden and then-Speaker Kevin McCarthy (R-CA). The difference now is this additional funding is part of the agreement from which appropriators in the House and Senate hope to finalize spending bills.
Despite the new agreement, the obstacles to the finish line remain the same – votes and time.
The House and Senate majorities are fundamentally at odds and struggling to meet in the ideological middle to compromise on funding levels or policy provisions to get enough votes to agree on how to fund programs under the topline numbers. Johnson is pulled to the right by the Freedom Caucus for deeper cuts to spending, while Schumer is pulled to the left to oppose compromising down on funding levels. With the slim Republican majority in the House, Johnson will have to decide if he passes bills that appease the conservative base but that won’t pass the Senate or works with Democrats to pass bills that could reach final passage, risking his position as Speaker.
Time is not on their side. The government is currently running under a two-part continuing resolution (CR). The first CR expires January 19, while the second expires February 2. Pressure is already mounting from the Senate for a short-term CR to finalize the bills covered under the January 19 CR, which include Agriculture, Energy and Water, Military Construction - VA, and Transportation-HUD. Johnson has to decide if he’s going to allow another short-term CR, which he derided as part of his bid to be Speaker, or let part of the government shutdown on January 19.
The second CR expires February 2. This package includes the two biggest bills – Defense and Labor-HHS-Education – along with Commerce-Justice-Science, Financial Services, Homeland Security, Interior-Environment, Legislative Branch, and State-Foreign Operations. Even with an additional two weeks to finalize funding for this package, these bills each contain their own funding and policy issues that take time to reconcile between House and Senate appropriators.
The federal student aid programs are funded in the Labor-HHS-Education Appropriations bill, which is included in the second CR. Even with a new agreement on top line funding levels, appropriators have to work out the differences between House and Senate draft bills at the program level.
For student aid, this means the difference between a level Pell Grant maximum and the elimination of Supplemental Educational Opportunity Grants (SEOG) and Federal Work-Study (FWS) in the House bill, and a $250 increase in the Pell Grant maximum and a $10 million cut to both SEOG and FWS in the Senate bill. How these proposals are reconciled remains to be seen. Not knowing the Pell Grant maximum and funding levels for SEOG and FWS is putting additional pressure on campus financial aid offices that are simultaneously working through the chaos of the new FAFSA implementation.
In addition to votes and time, congressional leadership also faces the obstacle of legislative policy riders, which are often attached to spending bills by the majority party to send messages on key political issues. Senate Democrats have already thrown down the gauntlet in opposition to any House Republican “poison pill” riders.
Finally, there is bipartisan, bicameral interest in providing emergency supplemental funding for border security and foreign aid. The Senate has taken the lead on crafting a spending package that would provide funding to Ukraine, Israel, and Taiwan, and address growing needs on the U.S.-Mexico border.