Authority for federal discretionary spending expires at midnight November 17. Yesterday the House passed the legislation unveiled by GOP House leadership last Saturday, the Further Continuing Appropriations and Other Extensions Act, to fund the government’s discretionary spending beyond expiration on November 17 of its current spending authority. The vote was 336-95. Only 2 Democrats voted against it.
The House plan, announced by new Speaker of the House Rep. Michael Johnson (R-LA), takes a two-step “laddered” approach to continuing government spending authority.
Under the first step, four agencies would be funded, at current year spending levels, through January 19. Under the second step, the remaining eight agencies would be funded through February 2, also at current (Fiscal Year (FY) 2023 levels). “Extraneous” issues—like aid to Israel or Ukraine—were excluded. The CR would extend the farm bill, though, by one year.
Senate-side, a different CR was being prepared by Senate Democratic Leadership. But there are recent indications from Majority Leader Schumer (D-NY) and Minority Leader McConnell (R-KY) that the Senate may be prepared to act on the House-passed legislation well before the Friday night deadline.
Generally, appropriators dislike the “laddered CR” approach, but many in Congress had an early reaction of relief that the fight over cutting spending below FY 2023 levels (as authorized in the bipartisan Fiscal Responsibility Act) would be averted, at least temporarily.
Taxes: Dependent on the resolution of these government funding issues is the fate of a $47 billion business tax package (to be accompanied, if ongoing negotiations are successful, with an expanded child tax credit of equal value to the business tax package). The business tax provisions could include an increase in the deductibility of interest businesses pay on their loans, eased reporting requirements for third-party sales, more generous expensing, and eased research & development tax rules. It is possible that negotiators will add a package of rules to expand health savings accounts (HSAs), too.
Prospects: At this juncture, a government shutdown on November 18 looks like it will be avoided. It is possible that because more Democrats than Republicans in the House voted for the laddered CR, Speaker Johnson may be at some risk from the far-right wing opponents in his Conference, as this outcome was what took down former Speaker McCarthy. As of now, however, there is no sign that a motion to vacate the speakership is in the works. As we await Senate action on the CR, we shall see if there is a different outcome in the House this time around.
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 Michael Hedge – Senior Director – Government Relations, at mhedge@naifa.org.