FY 23 Funding
Members returned to Capitol Hill this week, but it’s still too early to tell whether the FY 23 Omnibus Appropriations bill will make it over the finish line. While meetings between President Biden and the Congressional leadership from both parties largely reflect a common desire to complete the annual appropriations process before the end of the current Congress, Democrats and Republican Appropriators still have not agreed to topline funding for domestic and defense programming – something that generally occurs in late spring – though proposals are now floating back and forth between the parties.
This week, Senate Republicans proposed a topline of roughly $1.65 trillion in defense spending, which is similar to President Biden’s topline request and the House topline, while being just a bit lower than the Senate topline. House Minority Leader McCarthy (R-CA) has come out against an Omnibus and said he wants to cut discretionary spending below the FY 22 enacted level, which is just above $1.5 trillion. There is still partisan division among the breakdown between defense and non-defense spending, with Democrats favoring non-defense spending and Republicans favoring defense spending. Democrats are currently putting other a counteroffer to the latest Republican proposal.
Once there is an agreement on topline spending, there are twelve individual appropriations bills that need to be rolled into one giant Omnibus Appropriations bill – but spending levels need to be finalized for each line item and there also needs to be a resolution of dozens of controversial policy riders — all of which takes time to complete.
Even the most optimistic of Members on Capitol Hill believe one more Continuing Resolution will be necessary to keep the government open while the bills are being negotiated – with an extension to December 23rd the most likely scenario.
However, not everyone in Congress is on board with completing FY 23 funding before the current Congress expires at the end of the year. Many of the most conservative Members in the House and Senate would like to push final consideration of FY 23 funding until Republicans regain control of the House next month, allowing them to recraft the bills at significantly lower overall funding levels.
Congressional Democrats reject pushing FY 23 funding into the new Congress, threatening to pass a yearlong Continuing Resolution at current levels if negotiations fail, a scenario many Republicans would like to avoid, as it would prevent significant defense funding increases. Minority Leader McConnell is currently consulting with Republican Senators on next steps, he is particularly interested in providing additional funding to Ukraine in the FY 23 Omnibus and is concerned a Republican led House will oppose further funding for the war.
If FY 23 funding is ultimately enacted in the next few weeks, we expect modest overall increases for workforce related programming.
There is also an ongoing effort to attach a tax package to the Omnibus, but the overall size of the package is beginning to shrink as it is expected to be comprised of bipartisan items. It’s unclear whether TAA reauthorization would be included in such a package, as its viewed as a partisan bill by many Republican members.
As for a debt limit extension, it does not sound promising that an extension will pass during the current Congressional session. Two Democratic Senators told us that there is not enough Senate floor time available to pass an extension, as it requires 60 votes for passage and they would expect every Republican Senators to oppose it. The complicated procedural mechanisms that would be required to pass an extension solely on party lines (i.e. another reconciliation bill) would take days of floor time for passage, when there are a host of other bills they are also trying to pass before the end of this Congress. However, Democrats may live to regret not passing a debt limit extension now, as Sen.John Thune (R-SD) reflected the sentiments of many Republicans in a Bloomberg interview on Tuesday stating that he intend to seek major funding cuts, including to entitlement programs, in exchange for another extension.
Lastly, House Republicans are trying to determine who will be their leader in the next session of Congress, as well as which Members will chair the Congressional Committees. Thirty-one House Republicans voted against Kevin McCarthy (R-CA) in an internal leadership vote in mid-November, with five write-ins for someone other than McCarthy, but McCarthy needs 218 Republicans to publicly support his candidacy for Speaker in a vote on the House floor on January 3rd.
To this point, five Republicans have announced their opposition to McCarthy becoming Speaker and McCarthy is actively courting conservatives on the fence to support his candidacy to garner enough votes for his election. If McCarthy’s effort falls short, Steve Scalise (R-LA), the second ranking member of the Republican leadership, or conservative firebrand Jim Jordan (R-OH) are potential alternatives.
Along with leadership fights, the House Republican Steering Committee is charged with determining which Members will lead the Committees. Virginia Foxx (R-NC) is seeking a waiver to chair the Education and Labor Committee for one additional term beyond the current six year limitation for Republican Members. On Wednesday, every Republican on the Education and Labor Committee, with the exception of two Members, signed a letter in support of Foxx receiving this waiver, including the two Members—Jim Banks (R-ID) and Tim Walberg (R-MI)—likely in line to chair the Committee if Foxx’s waiver request is rejected. It’s a powerful showing for Dr. Foxx and we will know in the coming days whether she receives a waiver.
The House calendar for 2023 is available here. The Senate calendar has not yet been released. On Wednesday House Republicans voted 52-158 against a proposed earmark ban for next Congress.