BEYOND THE NUMBERS
Congress Should Finish 2023 Appropriations Now, Rather Than Punting Until the Next Session
Before ending its session, Congress should finish appropriations for fiscal year 2023, which began on October 1, by enacting a comprehensive bill (known as an omnibus), rather than enacting a full-year continuing resolution (CR) that sets funding levels at last year’s level except for a small number of exceptions to the general rule. Congressional Democrats, the White House, and Senate Minority Leader McConnell have all expressed support for finishing appropriations this session, with House Republicans apparently expressing mixed views. Continuing resolutions, including year-long CRs, are a bad way to govern. They allow agencies to continue operating, but generally at the prior year’s funding level — regardless of how costs, needs, and priorities may have changed.
Annual appropriations bills cover a wide range of priorities, including most of the Defense Department, assistance for education and job training, medical care for veterans, housing and other assistance for families with low income, financial aid for college students, public health measures and other health services, scientific and medical research, management of national parks and forests, the Internal Revenue Service, administration of Social Security and Medicare, the Coast Guard, international assistance, and many other important functions.
So far, no regular 2023 appropriations bills have been enacted, and all government agencies and programs funded through annual appropriations are currently covered through December 16 by a short-term continuing resolution, which allows them to temporarily continue operating but at the prior year’s funding levels and conditions. Short-term CRs essentially put the government on autopilot until appropriations bills can be resolved.
That’s why it’s critically important for Congress to finalize regular full-year appropriations before adjourning in December. While enacting a full-year CR would at least give federal agencies certainty regarding the resources they will have for the rest of the year, it remains problematic. A full-year CR can be improved in some areas if policymakers include funding adjustments to address critical needs, but there are no guarantees and the number of these exceptions likely would be quite modest. Extending the CR for the rest of fiscal year 2023 with only limited exceptions would continue outdated (and often inadequate) funding levels for most programs.
Among other problems, a CR that freezes funding at last year’s level would intensify the squeeze on non-defense appropriations that started in 2011. Funding for non-defense programs other than veterans’ medical care fell by about 11 percent between 2010 and 2022, after adjusting for inflation and population growth. If non-defense funding (excluding veterans’ medical care) for 2023 were frozen at 2022 levels, the cumulative cut since 2010 would grow to about 16 percent. Enacting regular appropriations bills would be preferable, as it would allow Congress to address the specific needs of each agency and program.
Another option that has been floated — enacting another short-term CR now and leaving regular appropriations to be finalized next year — would be worse. This would create more uncertainty for federal agencies, and it’s very likely that reaching agreement will get harder, not easier, in the new Congress. Indeed, there are concerns that Congress may be unable to reach agreement next year on 2024 appropriations, raising the possibility that the federal government could operate under CRs for two years.
A final agreement on full appropriations bills that raises both defense and non-defense funding above 2022 levels might be possible. There is significant pressure, particularly among Republicans, to markedly increase defense funding. Meanwhile, many members recognize the substantial needs for investments in non-defense areas, including in areas such as child care and housing where costs are rising and need growing. In recent years, a principle of rough parity that provides equal increases in funding for defense and non-defense programs has yielded bipartisan agreements to roll back some of the cuts made by the Budget Control Act. A parity principle should be used to facilitate agreement again.
One challenge with parity in the past has been that veterans’ health care has required substantial funding increases due to rising health care costs and a growing number of veterans needing care. While veterans’ health care could be thought of as either defense or non-defense spending, it’s been “counted” on the non-defense side of the ledger in prior parity agreements. That’s left too little for other unrelated non-defense programs. A better way to conceptualize parity would be to settle on the needed increase in veterans’ health care — costs that stem directly from defense-related policy — and then have parity in the increase in other defense and non-defense program areas.
More CRs and freezes need not be inevitable. Appropriations for 2023 are unfinished business of the current Congress and are urgently needed for a fiscal year that began two months ago.