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FY25 Can't Quite Accelerate: Despite widespread concerns from appropriators and many others, it is beginning to look like Congress may pass a short-term continuing resolution (CR) into next year. President-elect Trump has remained quiet on the issue, while congressional Republicans look to him for guidance on whether to begin 2025 with a clean slate legislatively, or not. As a result, a CR is likely. Chairman Tom Cole (R-OK), quoted in The Hill this week put it bluntly: "We've got to break this cycle, and this kicking it into next year is not good. It's not fair to the new president, it's not fair to the new members. They're going to have to vote on this. I'm not okay with any of this, I would like to finish the bills."
Meanwhile, the "four corners" (chairs and ranking members of the House and Senate Appropriations Committees) have begun discussing a topline number. Getting an agreement would permit the committees to draft a year-end bill quickly if the President-elect signals his support.
Disaster Supplemental Pushes Ahead: While topline negotiations are ongoing, appropriators zeroed in on emergency aid this week, with the Federal Emergency Management Agency (FEMA) Administrator testifying before the Senate Appropriations Committee on Wednesday that the disaster relief fund has fallen below $5 billion. The White House has requested a $100 billion disaster supplemental, which has generally received bipartisan support. While some House Republicans have raised eyebrows at the high price tag, we expect some sort of disaster supplemental to pass during the lame duck.
McConnell Makes It Official: The Defense Subcommittee will see a significant shift next year, with Senator Mitch McConnell (R-KY) confirming that he will chair the Defense Subcommittee next Congress – a move most were expecting him to make. With Senator Jon Tester's (D-MT) defeat, next in line for the Ranking Member spot is Senator Brian Schatz (D-HI). On the House side, Chairman Ken Calvert (R-CA) has reached his six-year term limit for the subcommittee and will need a waiver to maintain his chairmanship.
What About DOGE?: A lot of talk has been swirling recently about President-elect Trump's new Department of Government Efficiency (DOGE), which is neither a governmental agency nor funded by the government. DOGE will focus on a litany of cost-saving measures, including identifying programs which can be cut, slimming the federal workforce through reductions in force and other measures, and offering suggestions to simplify the tax code. In addition, DOGE will focus on recommending regulations to be rescinded as a result of the recent Supreme Court ruling overturning the Chevron doctrine (Loper Bright v. Raimondo). Notably, we have not heard that DOGE will focus on mandatory spending, which is the largest driver of our deficit spending and growing national debt.
Article 1 of the Constitution empowers Congress with the purse strings. Thus, changes to the federal budget authority will need to be approved by Congress. To help expedite this, plans are underway to create a new House Oversight and Accountability Subcommittee on Delivering on Government Efficiency, which reportedly will be led by Rep. Marjorie Taylor Greene (R-GA). This oversight, combined with OMB coordination, could result in changes to spending in the next few years before DOGE's self-imposed phase-out date of July 4, 2026.
VA Follow-Up: Just before the August recess, the Department of Veterans Affairs made an urgent emergency funding request due to an unexpected $15 billion funding shortfall. Congress responded by passing a $2.9 billion emergency spending package in September, while raising concerns about the VA's significant oversight. This week, the House MilCon VA Subcommittee held an oversight hearing on this shortfall, noting that Congress was recently made aware that none of the emergency funding was spent in FY24 as intended, and that the VA carried over $5.1 billion into the new fiscal year. We expect more oversight on the VA's inaccurate forecast in the year(s) ahead.
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