Congress has returned to Capitol Hill and has a long list of priorities to address, including two impending government funding deadlines on January 19 and February 2, 2024.
There has been good news on the budget front: it was announced on January 7 that House and Senate Leadership had reached an agreement on topline numbers for the 2024 Appropriations bills, a significant breakthrough in the stalemate in budget negotiations. The deal will allow for the total level of spending laid out in last year’s debt limit agreement, with $886.3 billion for defense and $772.7 billion for nondefense programs. It also includes the side deals made by then-Speaker Kevin McCarthy (R-CA) and President Biden that will bring the total spending about equal with FY 2023 numbers. It does not include the nearly $16B additional funding that the Senate Appropriations Committee leaders had agreed upon and included in their bills.
However, only the topline numbers have been agreed to so far; there is still much to be decided as the House and Senate negotiate their vastly different versions of the twelve appropriations bills; already conservative House members have expressed their displeasure with the agreement, which may hold up the process further. It is expected that another short-term Continuing Resolution (CR) will be necessary to give Committee leadership time to work out the differences and get their parties on board, but as of the drafting of this newsletter, no deal has been announced. There also has not been an announcement about a supplemental package to address funding for child care, WIC, and other important programs.
There has also been movement on tax policy: this week a deal was reached by Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Chairman Jason Smith (R-MO) on an $80 billion tax package that expands the child tax credit (CTC) and extends some business tax provisions. During the COVID-19 pandemic, the CTC was expanded to many more low-income families and the benefit was increased, cutting child poverty nearly in half. Since the pandemic-era CTC expansion expired, this has been a key policy priority for many individuals and organizations.
Although the details of the package have not been formally announced yet, the basic policy structure of the deal is known and is being analyzed by several advocacy groups. The proposal is much smaller in scope than the American Rescue Plan expansion, the Center on Budget and Policy Priorities estimates that it would benefit some 80% of the 19 million children who now get a partial credit or no credit because their families’ incomes are too low. It is believed that the proposal would lift as many as 400,000 children above the poverty line and make an additional 3 million children less poor in its first year. The impact would be larger in 2025 when the changes are fully in effect.
This compromise proposal is an important step forward, and it is expected to be attached to the next large budget bill that moves forward. There are a number of other priorities for 2024, including reauthorizations of Title IV-B and the Farm Bill, that we hope to see move forward this year.
