September Brings Sprint to Fund the Government

Chief among a raft of high-profile and controversial issues facing Congress this month is the need to fund the government before the end of fiscal year (FY) 2025 (so, by October 1). Failure means a government shutdown. It is unclear whether a shutdown could benefit either party, but some members on both sides may see some political value in a shutdown.

Currently, it appears that Congress will aim for a continuing resolution (CR) that will provide funding for the government’s discretionary programs and agencies at FY 2025 levels—potentially with few if any policy changes. However, there are some (including the White House) who want the CR to run until the first quarter of 2026. And, there are already significant signs of “add-ons” to a CR that does no more than provide discretionary funding past September 30.

Reauthorization of and funding for the National Flood Insurance Program (NFIP) will likely come via the government funding legislation—whether that turns out to be a CR (or multiple CRs), or an appropriations bill. There is some controversy about how and when the government will respond to natural disasters (and we are in hurricane season, so a natural disaster (or several) is likely), but the controversy centers on the role and scope of FEMA (Federal Emergency Management Agency). It may impact NFIP funding, but Washington insiders think it will not.

Among the add-ons under consideration (and prospects for including them in a CR or a government funding appropriations bill) are:

• Health Policy: Congress is working on a health policy package, which could move later in the year, or could be part of a government funding bill. The key issues are extension (probably with modifications) of the expiring enhanced Affordable Care Act (ACA) premium tax credits, an overhaul of the Medicare Advantage program, upcoding in both Medicare and Medicaid, and pharmacy benefits manager (PBM) rules. Also potentially in play are rules governing compensation for advisors on government health insurance programs.
•  Tax Package: GOP lawmakers are exploring whether and if so how to enact a tax bill—consisting of “leftovers” from the tax/spending cuts reconciliation bill (now being called by Republicans the “working families tax cuts” law) enacted this past July.
• Three-bill “mini-bus”: An appropriations bill that would fund Military Construction/Veterans Administration, Agriculture/Food & Drug Administration, and Legislative Branch is something lawmakers are talking about adding to the upcoming CR….differences between the House and Senate versions of these bills still need to be worked out, but they are among the least controversial of the 12 regular order appropriations bills. Washington insiders see a path to reconciling the three into one version that both the House and Senate can pass. But—and this is a big but—partisan emotions are running deep and divisive; it may be that Republicans and Democrats simply cannot reach a bipartisan agreement on anything right now.

Prospects: Whatever Congress agrees to on government funding—including whether to include any of the “add-ons” in the CR—has to be done by midnight September 30 to avoid a government shutdown. With Congress out for the Rosh Hashanah/Yom Kippur holidays the third week of September, time is short. So, too, are lawmakers’ tempers. And partisanship reigns supreme right now. Both Hill and private sector folks think a government shutdown is a real possibility.

NAIFA Staff Contacts: Diane Boyle – Senior Vice President – Government Relations, at dboyle@naifa.org; Mike Hedge – Senior Director – Government Relations, at mhedge@naifa.org; or Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.