Can Congress Pull Together A Federal Budget Before October?

Monday - September 25 2023, 08:27 UTC - 1 year ago

Congress must pass 12 appropriation bills before October 1, 2023, in order to ensure government agencies and departments have funding to keep programs going. This year, differences between Republicans and Democrats, and between the House and Senate, may make this difficult to achieve. If the appropriation bills don't pass, a government shutdown may occur, which could have a negative impact on the economy.

U.S. senators and representatives returning from their summer vacations will need to shake off their suntans in quick time and get down to business. Congress has just 11 days when it’s in session before the next federal fiscal year begins on Oct. 1, 2023. And in that time, it will need to enact all 12 appropriation bills to ensure that government agencies and departments have funding to keep programs going – or face a potential government shutdown. So will they pull it off? And what will happen if they don’t? As an expert of public policy and former deputy director of the Congressional Budget Office, I feel that the challenge this year is the greatest faced since the enactment of the Congressional Budget Act of 1974, which made significant reforms in the process. This is due to the magnitude of the differences not only between the two parties but also between the House and Senate. A worst-case scenario could see a government shutdown for several weeks, or even a couple of months – and that could have a significant negative impact on the economy.

The House of Representatives initially faced a workload of 12 appropriation bills to get through Congress. But just before the House broke for August recess, it passed one appropriation bill, for military construction. One down, 11 to go. The problem is the military construction bill is traditionally the easiest to pass, as it is very small – this year it stood at US$19.1 billion in spending. This is substantially less than the largest bill, which is usually the Labor, Health, Human Services and Education bill. When reported, or passed, out of the committee in the Senate this year, that bill amounted to $224 billion. Providing money for military construction is also generally done without much controversy, as it includes funding for housing military families – something few members want to oppose. And while the military construction funding bill passed before the recess, the House leadership had also hoped to pass the Agriculture, Rural Development, and Food and Drug bill but did not have the necessary votes for passage.

Complicating matters is that ongoing funding bills could be delayed or derailed by ideological battles in Washington. The conservative Freedom Caucus in the House is pushing for tens of billions of dollars in cuts in the eight appropriation bills that fund domestic spending. The other four are military construction; defense; state and foreign operations; and the legislative branch itself. Part of this desire for cuts comes from the frustration that conservatives feel over there being virtually no reductions in the Fiscal Responsibility Act of 2023, which lifted the debt ceiling and was negotiated by House Speaker Kevin McCarthy and President Joe Biden in late May.

Members of the Freedom Caucus are also expected to push for several riders on the appropriation bills that would restrict abortion rights and eliminate funding for LGBTQ+ centers and diversity and inclusion programs. These will be vehemently opposed by Democrats and potentially create an impasse in negotiations. Another complicating factor is the need to take into account the impact of the tax hikes Biden and Congress agreed on earlier in 2023 to help pay for the spending in the Fiscal Responsibility Act. This may reduce the overall amount of money available in the appropriation bills as resources are allocated to cover the higher taxes.