Stephen Boyd’s Capitol Hill briefing for Alabama’s business, financial, defense and government affairs executives.
In Final Surge Before Election, Search for a Government Funding Patch Will Drive All the Action
Congress returns to Washington today for a final three-week stretch of legislative work prior to the fall elections.
The most significant and perhaps only product of voting on Capitol Hill this month will be the passage of a stop-gap Continuing Resolution (CR) to keep the government operating past the Oct. 1 start of fiscal year 2025. Approval of a CR is a near certainty. Despite the inevitable posturing, leaders and vulnerable incumbents in both parties have a shared interest in avoiding a government shutdown just before an election.
That said, politics will play a role. The final text of the CR and the meandering path to its enactment remain unclear, and everything happening in Congress in September will be parsed for its potential impact on a historically tight presidential election. Here’s what to know:
Why a CR? Short answer: Congress didn’t get its work done.
- Under regular order, full discretionary funding requires the House of Representatives and the Senate to each pass 12 annual appropriations bills, reconcile the differences between their respective versions, and then approve the agreed upon text before it is sent to the president for signature—a process that has been successfully completed only four times since 1977 and not since 1997.
- This year, Congress wasn’t even close. In the House, 5 of 12 FY25 bills have been approved; in the Senate, none. Plus, House and Senate appropriators are about $100 billion apart in total spending.
What’s included? At its core, the CR extends existing FY24 discretionary funding levels to a specific date in the next fiscal year. But…
- The Biden Administration transmitted to Congress a 29-page list of requested exceptions. One that caught my eye: Authority for the Secret Service to spend money at a faster rate to ensure the protection of presidential candidates.
- Many Republicans want to attach the “SAVE Act,” which would require U.S. citizens to provide documentation like a birth certificate or passport in order to register to vote. (It’s already illegal for “any alien” to vote in federal elections.)
How long? CR’s in election years are common. A typical plan would set an expiration date in mid-December to allow Congress to act after the dust settles from the election.
- Some of Trump’s allies are pushing for a CR that extends into next spring under the theory that Donald Trump will win and can then influence spending, even if that plan risks bogging down Trump’s first 100 days cleaning up the prior year’s mess.
Who wins & who loses? The U.S. government remains open, so that’s a win. But CR’s…
- Make life difficult for government managers trying to respond to evolving challenges, and tend to have a paralysis effect on contracting decisions that can hurt small firms doing business with the government, and;
- Significantly delay hard fought-funding by states and local governments, universities, nonprofit organizations and private entities—not to mention individual members and their staffs.
What’s next? The House will go first, but Speaker Mike Johnson again finds himself in a precarious political position. Passage of a CR will require bipartisanship, but if Johnson wants to continue as Speaker, he can’t afford to further alienate the right flank of the Republican Conference prior to congressional leadership elections in mid-November.
The first act of what is probably a three-act play starts this afternoon, when the House Rules committee takes up a Johnson-authored CR that would extend current funding to March 28, 2025 and includes the “Save Act.” That will please the right-wing but make some moderates uneasy because it complicates passage of the underlying government funding. Expect a vote in the full House later this week.
Schumer and other Democrats have made clear that both the immigration provisions and the March end-date are non-starters. Defense Secretary Lloyd Austin wrote recently that a six-month CR would set the US behind its pacing threat of China. Senators will wait and see what gets through the House, and then have about nine voting days to settle on a path forward.
While those talks play out, expect the House to take up base-friendly messaging bills on China, immigration, crime and Environmental, Social and Governance (ESG) policies.
Approval of a CR may come down to the wire. However, if work gets done early, expect House and Senate leaders to shave off the last few days of the work period in favor of getting members back home to voters as quickly as possible. After those late September flights depart DC, it’ll be all about the election—all of the time.
Legislative Radar
Congress is unlikely to approve any other significant bills prior to the election, but there are a range of issues that might come up in the subsequent lame duck session. And, if not, these bills could shape the legislative debate in the 119th Congress.
- Judicial Nominations (Senate) – If Trump wins, expect Senate Democrats to prioritize in a lame duck session any of Biden’s pending judicial nominees for confirmation. There are currently 48 vacancies and 18 nominations pending.
- The National Defense Authorization Act (NDAA) – The House passed its version of the annual defense bill back in July. The Senate committee approved a version, but Schumer didn’t bring the legislation before the full Senate prior to the August break. He’s unlikely to do so now. Expect informal conference negotiations to begin by early October, a ping-pong procedure between chambers, and a final vote after the election.
- AI Regulation – Sen. Mike Rounds (R-SD), a leader on artificial intelligence policy, proposed a legislative package that would “increase AI literacy, enable the use of AI to enhance the efficiency of US Shipyards, spur innovation in financial services and improve healthcare outcomes.” This is a noteworthy early step toward regulating the new technology.
- Online Safety – Rep. Cathy McMorris Rogers, Chair of Energy and Commerce, wants to get her bipartisan and bicameral “American Privacy Rights Act” across the finish line. It has a long way to go and an uphill climb. The bill includes provisions intended to set national data privacy rights for Americans, eliminate the existing patchwork of state data privacy laws, and establish enforcement mechanisms to hold violators accountable.
- The Farm Bill – Farm bill provisions start expiring later this year, and Congress will need to pass another extension. A deal on a full reauthorization still seems well out of reach in the current political environment.
- Taxes – In the lame duck, Congress may try again to reauthorize several key tax incentives, including a key research and development tax credit and the Child Tax Credit. Looking ahead, tax policy is sure to take center stage in early 2025 as a host of 2017 taxpayer-friendly provisions expire. The outcome of that debate will be determined by who controls Congress and the White House next year.
The Schedule
The House and Senate are scheduled to be in legislative session most business days between now and Sept. 27.
- Sept. 10 – Presidential debate (Hosted by ABC in Philadelphia)
- Sept. 11 – August inflation report
- Sept. 16 – Early in-person voting in the battleground Commonwealth of Pennsylvania begins.
- Sept. 17 & 18 – Meeting of the Federal Reserve to determine expected rate cut.
- Sept. 30 – End of fiscal year 2024 (Deadline for passage of a CR)
- Oct. 1 – Vice-Presidential Debate
- Oct. 10 – September inflation report
- Nov. 5 – General election
- Nov. 12 – Congress Returns (Lame Duck Session/Leadership Elections/Etc.)
- Dec. 31 – Deadline for passage of the National Defense Authorization Act
Stephen E. Boyd is a Partner at Horizons Global Solutions. Previously, he served as a Senate-confirmed Assistant Attorney General at the U.S. Department of Justice, Chief of Staff for Alabama members in both the U.S. Senate and U.S. House of Representatives, and as a Communications Director of the Senate Committee on the Judiciary. He resides in the Washington, D.C. area. Opinions expressed herein are his own. Contact Stephen at [email protected] or via X at @SEBOYD79 or via LinkedIn.