With only one work week left in the first year of the 118th Congress, lawmakers have stalled on a number of top priorities, including appropriations and a forthcoming tax package, as well as supplemental funding for both foreign and domestic policies.
On the tax policy front, there continues to be talk about a bipartisan package that includes fixes for business taxes for research as well as a modest expansion of the Child Tax Credit for families, which was expanded in the American Rescue Plan Act during the pandemic and led to a substantial reduction of child poverty. The current proposals would be smaller in scope than the 2021 expansion. However, the two parties have been unable to reach an agreement on the details or the cost of a total package, likely pushing any legislative movement into early 2024 at least.
On November 16, 2023, President Biden signed into law the Furthering Continuing Appropriations and Other Extensions Act of 2024 (P.L. 118-22), setting two different deadlines (Jan 19 and Feb 2) to keep the government operating. While this bill’s “laddered” deadline avoids the normal crunch at the end of December to pass a large omnibus to fund the government for the next year, the two parties and two chambers need to come together soon on a topline spending level and the subcommittee allocations if the staff is going to have enough time to prepare the final legislative text for action before the deadlines hit.
However, negotiations over the top spending numbers have slowed down, with a deal still out of reach, according to reports this week. Speaker of the House Mike Johnson (R-LA) is following the calls of Representative Chip Roy (R-TX) and other House Freedom Caucus members in demanding that the final number remains at $703.7 billion for domestic and foreign aid funds — the amount that’s actually written into the debt limit law without the additional side deals that were struck to increase spending. That would mean 9 percent cuts on average below current levels.
If he is unsuccessful in reaching an agreement to keep the spending levels at this amount, Speaker Johnson has proposed what Senate Appropriations Chairwoman Patty Murray (D-WA) is calling a “date change” continuing resolution, extending the current deadlines of the CR to September 30, 2024. This would trigger across-the-board cuts to all programs of about 3% ($26.5B) to defense programs and 9.4% (more than $70B) to nondefense programs, according to Chairwoman Murray’s new fact sheet. A cut of this magnitude would mean fewer families served by nutrition programs like WIC, fewer families receiving rental and energy assistance, fewer child care and early education spots available, and significant cuts in education, juvenile justice, and behavioral health services.
Congress has just 5 days until the Christmas recess and still has a number of other priorities to consider, such as supplemental funding for Ukraine and Israel, disaster relief, and domestic priorities like child care and WIC, all of which are still up in the air.
