FY 2024 Budget Deal Reached
But shutdown threat remains
House and Senate negotiators sealed an agreement Sunday to unlock final fiscal year (FY) 2024 appropriations bills, after nailing down defense and nondefense spending limits, according to reports. The main point of contention in the negotiations was whether to adhere to the approximately $773 billion cap on domestic and foreign aid funds, a previous agreement between President Joe Biden and former Speaker Kevin McCarthy (R-Calif.). The final deal's structure remains unclear, but Democrats had been adamant about upholding the previous agreement, while Republicans aimed to offset more of the costs.
The bipartisan agreement sets defense funding at $886 billion for the current fiscal year. In a big win for Democrats, the accord pegs non-defense funding at nearly $773 billion, a total that counts tens of billions of dollars agreed to alongside the debt limit package. Non-defense budgets would remain roughly flat, amounting to a less than 1% decrease compared to current funding. Military programs would see about a 3% increase.
The latest temporary funding law expires for four of the spending bills, which account for roughly 20% of annual discretionary spending, on Jan. 19, including funding for USDA. Agencies funded by the remaining eight bills would face appropriations lapses after Feb. 2. This tight timeframe leaves lawmakers with little time to draft the final legislation and secure its passage in both chambers to avoid a partial government shutdown.
In a letter to House lawmakers on Sunday, House Speaker Mike Johnson (R-La.) celebrated $16 billion in extra spending cuts he negotiated beyond the terms of the debt agreement, for a total of $30 billion less than Senate lawmakers sought in the funding bills they have drafted. The new funding accord is still far higher than fiscal conservatives have demanded. The speaker acknowledged in his letter that the funding levels “will not satisfy everyone, and they do not cut as much spending as many of us would like.” But he called the deal “the most favorable budget agreement Republicans have achieved in over a decade,” noting that the bipartisan accord will allow GOP lawmakers to put their mark on federal budgets, rather than running the government on the “Schumer-Pelosi” deal struck before Republicans claimed the House majority last year.
The agreement speeds up the roughly $20 billion in cuts already agreed to for the Internal Revenue Service and rescinds about $6 billion in Covid relief funds that had been approved but not yet spent, according to Johnson’s letter.
President Joe Biden said the agreement “moves us one step closer to preventing a needless government shutdown and protecting important national priorities… It reflects the funding levels that I negotiated with both parties and signed into law last spring. It rejects deep cuts to programs hardworking families count on, and provides a path to passing full-year funding bills that deliver for the American people and are free of any extreme policies,” Biden said in a statement.
Of note: There are still significant policy disagreements that often become attached to essential spending bills. Johnson has emphasized border security as a top priority in the final negotiations. Some House GOP members prefer a gov’t shutdown over bills that lack stringent border restrictions. The agreement could include new border controls as Republicans and Democrats have been locked in negotiations over the southern border for months, with right-wing lawmakers demanding the return of some Trump-era restrictions.
Another unresolved matter is supplemental spending for the conflicts in Ukraine and Israel, which became entangled in the unresolved U.S. border dispute late last year. The White House has stated that further assistance to Ukraine requires additional congressional approval.