The last big-ticket item approved by the 118th Congress was enactment of a continuing resolution (CR), HR 10545, that keeps the government funded through March 14, 2025. The House and Senate approved the measure by wide margins. The House vote was 366 to 34, with one member voting “present.” The 366 aye votes included 170 Republicans and all Democrats except the one (Rep. Jasmine Crockett of Texas) who voted present. The Senate vote, coming just minutes after midnight December 20 deadline, was 85 to 11. President Biden signed it into law on December 21. Thus, the threatened partial government shutdown was averted, despite a few hours on a Saturday during which funding for the government technically ran out.
Generally, the CR funds the government at fiscal year (FY) 2024 levels, with few policy changes, through March 14, 2025. It extends authorization and funding for the National Flood Insurance Program (NFIP). It does not extend the deadline for beneficial ownership information (BOI) reporting. Nor does it include SECURE or SECURE 2.0 technical corrections.
The short-term extension sets up another intense battle for federal funds early in 2025. The effort—which shows no sign of being any easier this year, with all-GOP control of the House, Senate, and Presidency—will compete with incoming President Trump’s first 100-day agenda. That agenda includes dealing with the expiring provisions of current tax law—including the deduction for qualifying noncorporate business income—along with a raft of campaign-promised new tax breaks. Those new tax breaks could include, among other issues, Trump’s call for tax-based caregiving assistance which could make long-term care insurance more affordable and therefore more appealing. Also in play are tax-free tip, overtime, and Social Security income.
The need to fund the government for the rest of fiscal year (FY) 2025 will also compete with the need to deal with the statutory debt limit—the level of U.S. borrowing beyond which the country cannot go. The debt limit is now back in place, and Treasury is using “extraordinary” (accounting) measures to avoid breaching the debt limit. Those accounting maneuvers will cost the government significant money, and the ability to use them will run out by late spring/early summer. Failure to raise or suspend the debt limit would mean that the U.S. would be unable to pay all its bills/meet all its obligations on a timely basis, thus putting at risk “the full faith and credit” of the U.S. Economists around the world say that would be “a catastrophic” economic disaster.
Prospects: The need to fund the government past March 14 is on a collision course with the GOP’s desire to enact President-Elect Trump’s first 100-day agenda. It means it will be a blistering pace for the rest of this winter as Congress and the President try, all at the same time, to deal with several high-priority issues: funding the government, extending expiring tax rules (to prevent a huge tax increase if the tax law reverts to pre-2017 rules), dealing with the debt limit, addressing Trump’s other tax break proposals, and others (like, for example, border security and deportation of people here in the U.S. illegally).
NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org; or Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org.