This week on Facing the Future, we discussed the drawn-out Fiscal Year 2024 appropriations process. Our guest was Bill Hoagland, Senior Vice President of the Bipartisan Policy Center and former Republican staff director of the Senate Budget Committee. He gave us his perspective on what’s holding things up and what comes next. Concord Coalition policy director Tori Gorman and chief economist Steve Robinson joined the conversation.
We are now five months into fiscal year 2024 and none of the 12 regular appropriation bills have been passed. To avoid a lapse in funding, often referred to as a government shutdown, Congress has passed a series of continuing resolutions (CRs) extending funding at the FY 2023 level. At the time our interview with Hoagland was recorded, two deadlines existed; March 1 for four of the appropriation bills and March 8 for the remaining eight bills, including the two largest (Defense and Labor-Health and Human Services). Subsequently, on February 28, an agreement was reached to extend those deadlines to March 8 for six bills and March 22 for the remaining six.
The further delay agreed to by congressional leaders underscores a problem Hoagland brought up in our conversation. “We should have already been working on fiscal year 2025 by now,” he said. “We’re setting ourselves up for a disastrous fall, regardless of whether we get an agreement here or not.”
He correctly predicted, “we don’t have enough time here to be finished by the end of the week on those four bills. We are looking at another continuing resolution. Hope springs eternal. Maybe things can come together here. Maybe we can figure out a way of at least avoiding another shutdown. But right now we don’t have a lot of time. All I can say is, this is giving new meaning to March Madness.”
Despite the focus on March deadlines, Hoagland said the real deadline is April 30 because of a provision in the Fiscal Responsibility Act that was enacted in June of 2023. That law set up a procedure to impose across the board reductions (sequestration) if the appropriation bills are not passed by April 30.
“That is a one percent cut,” Hoagland said, “but the problem is, of course, that the one percent cut from a continuing resolution level with only five months left in the fiscal year could be a lot larger for some programs. The one percent was over an annual basis. So some of the conservatives would argue, ‘why don’t we just do the continuing resolution, kick in the one percent cut at the end of April and look at all the savings we’re going to get.’”
He pointed out, however, that “at the end of the day it is OMB [the president’s Office of Management and Budget] that will make the determination as to whether or not that one percent cut goes into effect. I don’t know if somebody can challenge that, and who challenges it in court, and even by the time they got through the courts the fiscal year will be old and we’ll be into another one. So I think it’s kind of a fool’s errand that people think they could hold out until the end of April, and somehow they’re going to get these great cuts. I truly believe in an election year politics will play here, and OMB will have enough flexibility, and say that there are no one percent cuts.”
Looking at the larger budgetary context, Hoagland said, “I am always struck that we’re arguing about 30 percent of the federal budget and even more realistically, we’re only talking about 15 percent when most of the fights are in the non-defense area. We’re spending too much time on this segment of the Federal budget when we ought to be focusing on that other 70 percent. And that’s what bothers me. All this discussion, people thinking that we’re making great progress. We’re not making progress on accumulation of the overall debt.”
In addition to the regular appropriation bills, Congress is also considering a national security emergency spending bill for Ukraine, Israel, Taiwan, and other priorities. That bill passed the Senate with bipartisan support but House Speaker Mike Johnson has not taken it up. Hoagland observed that “if he’s trying to protect his Speakership, I don’t think he should worry about it. He is the Speaker of the House. He ought to recognize that. I know it’s tough, but I do think that he has to recognize that he’s going to need Democratic support to pass legislation, whether it’s the supplemental or whether it’s these particular appropriation bills that we’re talking about. Hopefully he’ll get there. But right now I think he’s trying to protect his position when he should be focused on the overall good of the country.”
Hoagland expressed concern and frustration about the long-term fiscal outlook. “It’s going to get more difficult the longer we delay action. This requires some very difficult policy decisions. We are kidding ourselves if we think that somehow we have nothing to worry about long-term. I think this really does add to the debt burden of the future, and it’s on my children and my grandchildren, and they’re going to pay for this one way or the other, either through higher taxes, higher interest rates, or even worse, a lower standard of living, and the sooner we act the better. It’s just going to get more difficult.”
Hear more on Facing the Future. I host the program each week on WKXL in Concord N.H., and it is also available via podcast. Join us as we discuss issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.
