FY24, Are We There Yet?: Following a weekend where the hopes of avoiding a shutdown appeared dim, our previously stated optimism was validated when congressional leadership struck a deal to kick the can down the road for (hopefully) the last time in the FY24 appropriations cycle. Yesterday, Congress passed another FY24 continuing resolution, the first step to temporarily avoid a shutdown. While Speaker Johnson secured the majority of the GOP's vote (113), he has acknowledged that his reliance on Democratic support for every funding bill thus far has undermined his leverage in negotiations.
Under the new CR, Congress has until March 8 to complete its work on the Agriculture, Energy and Water, MilCon-VA, and T-HUD bills, along with Interior and CJS. Appropriators are aiming to release the first round of bills this Sunday and hold a vote on the House floor by Wednesday. If the House can stick to this schedule, the Senate should have sufficient time to vote and send the package to Biden's desk before the first shutdown deadline.
The real challenge comes with the second tranche, which includes Homeland Security and must be completed by March 22. This may be the bill where Speaker Johnson takes an uncompromising position. Any additions of "poison-pill" provisions in these bills would undermine their passage in the Democratic-controlled Senate and could lead to (yet another) continuing resolution or partial shutdown. One option we think the Speaker may consider is a package of five of the six remaining bills and a CR to the end of FY24 for Homeland Security. Three weeks is an eternity, so a lot can change.
Ukraine Aid: Leader McConnell announced Wednesday that he will be stepping down from leadership in November, meaning Ukraine is about to lose its biggest Senate GOP advocate. The supplemental appropriations package - which includes funding for Ukraine, Israel, and Taiwan – passed the Senate on February 13 by a vote of 70-29, but remains stalled in the House.
Leader Jeffries suggested on Thursday that Democrats may protect Speaker Johnson from removal if he allows a vote on Ukraine funding. Rep. Marjorie Taylor Greene has previously said she would seek to remove Speaker Johnson if he brought Ukraine funding to the floor. Although we do not believe Speaker Johnson will buck his conference on this issue, Democrats raising this possibility is notable. It also has the potential to further embolden those on the right who would see Johnson's support for Ukraine as a betrayal.
State of the Union and the FY25 President's Budget: The President will speak to a Joint Session of Congress on March 7 on the State of the Union. In addition, the White House is scheduled to release the FY25 budget on March 11. We expect this only to be an FY25 outline, or "skinny budget," and hope to see budget justifications and other materials the week of March 18.
Client Alert: While FY24 is getting worked out, member deadlines for FY25 requests are already fast approaching. If you are considering funding or policy changes for FY25 and haven't spoken to us, now is the time to do so!
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