FY24 Budget Update: With Days till a Possible Government Shut Down, Uncertainty Reigns

Update 11/16: After the House of Representatives passed the two-step continuing resolution Tuesday night, the Senate passed the measure Wednesday evening on an overwhelmingly bipartisan vote. It now heads to the President for signing into law. That means we have two CRs, one until January 19th and the other to February 2nd.

Original Post: Congress has less than a week to fund the Federal Government for the remainder of the fiscal year or risk going into a shut down. The current continuing resolution, or CR, funds the government until November 17th. But it’s unclear what is going to happen.

The problem lies with the Republican Caucus in the House of Representatives. Put simply, they cannot agree on a course of action with the federal budget that needs to do two things: one, have the entire GOP House Caucus vote for it; and two, would force the Senate to follow suit. The conditions that paralyzed the chamber through much of October, which began with Speaker McCarthy being ousted from his leadership position and then four different candidates vying to replace him, are still present and are hamstringing the caucus, and all of Congress along with it.

Those conditions have not stopped the new Speaker of the House, Mike Johnson (R-LA), from attempting to move the chamber forward. However, Speaker Johnson’s approach is far from ideal: he has proposed a “laddered” continuing resolution which would put different parts of the federal budget on different CR timelines. Funding for military construction, energy and water, veteran, and agriculture programs, and the departments of Transportation and Housing and Urban Development would run through January 19th. The remaining parts of the government — covering the Defense, State, Justice, Commerce, Labor, and Health and Human Services departments, among many other agencies and government functions — would expire on February 2nd. With the exception of the Department of Energy research agencies, which are included in energy and water programs, the majority of the federal research agencies would be included in the February 2nd part of the Speaker’s plan. The text of the legislation was released Monday morning.

The obvious issue with the Speaker’s plan is it creates multiple deadlines for the federal budget, spreading out the problem. And it doesn’t address the issue that is causing the holdup: the infighting within the House GOP Caucus. Keep in mind, the Republican majority in the House is only four seats, so they have little room for defections if they want to pass a wholly Republican budget and have a strong negotiating position with the Senate. There are already three House Republicans who have come out against this planned laddered approach and it is unlikely to pick up any House Democrat votes.

Looking beyond the House, Speaker Johnson’s plan has few friends. President Biden has called it, “extreme,” and, “an unserious proposal that has been panned by members of both parties.” It is unclear at the moment how the Senate will respond; members of that chamber are keeping their options open by neither praising or blasting the proposal. The Senate has been taking a bipartisan approach to the budget, and sticking to the contours of the May budget agreement, which has put them in a stronger negotiating position.

Should Speaker Johnson’s CR plan fail to pass, he has told his caucus he plans to bring a full-year CR spending bill to the floor, which would include blanket cuts to non-defense spending. Such an approach would be a worst-case scenario for federal research agencies. The prospects for passage of such a plan are unclear at the moment.

The unfortunate reality is the situation is very fluid. With a new Speaker of the House, who has almost no track record to give an idea of how he will lead in the situation, coupled with the continued House Republican disunity, makes this situation almost impossible to predict. We’ll have to let this process play out more before we have a clear picture on the how it will end. Please keep checking back for more updates.

FY24 Budget Update: With Days till a Possible Government Shut Down, Uncertainty Reigns