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POLICY INSIGHT
BEYOND THE NUMBERS

House Bills Will Tighten Squeeze on Non-Defense Appropriations

The Republican majority on the House Appropriations Committee is pursuing cuts in non-defense appropriations for 2025 that would deepen funding shortfalls — resulting in a cumulative 22 percent cut in funding for non-defense programs outside veterans’ medical care since 2010, after adjusting for inflation and population growth.

House Appropriations Committee Chair Tom Cole has announced plans to fund non-defense programs below what Congress and the Biden Administration had previously agreed on for 2025 as part of a bipartisan agreement in 2023 to raise the federal debt ceiling. Those negotiations yielded the Fiscal Responsibility Act (FRA), which set appropriations caps for 2024 and 2025, and related agreements to supplement non-defense funding so that it would remain roughly flat in 2024 at the 2023 level and increase by just 1 percent in 2025. This compromise followed a decade of tight funding caps under the Budget Control Act of 2011.

But House Republicans now intend to fund 2025 non-defense appropriations bills 6 percent below the 2024 level rather than provide the 1 percent increase. This move is possible because the 2023 agreement set the non-defense caps in the FRA below the intended funding levels — $70 billion lower for 2025. The gap was meant to be filled by what had become known during the debt limit negotiations as “side-deal” adjustments. These agreed-to adjustments provided additional funding while complying with the FRA caps by, for instance, giving emergency designations (and thus exemptions from the caps) to funding that’s really for ongoing needs, or by rescinding existing funding (usually funding that was provided in legislation other than annual appropriations bills) to offset additional funding provided to other program areas.

When he announced his proposed 2025 funding allocations among subcommittees, Cole indicated that bills would be written at the cap level, but that the agreed-on adjustments would not be used, even though those adjustments were central to enacting the FRA and, more importantly, critical to ensuring more adequate funding in a host of important areas. Under Cole’s approach, non-defense programs would be cut by an average of 6 percent between 2024 and 2025.

When evaluating funding trends over multi-year periods, it’s important to account for inflation and population growth, as inflation leads to higher program and operating costs and population growth increases the number of people the government serves. It’s also useful to separate out funding for veterans’ medical care, which is by far the largest item within non-defense appropriations but which has followed a very different funding path than other non-defense programs: from 2010 to 2024, funding for veterans’ medical programs increased by 79 percent (adjusted for inflation), reflecting rising costs, growing needs, and the high priority Congress places on veterans.

Under the 2023 debt limit agreement (including the agreed-on adjustments), the total decline from 2010, after adjusting for inflation and population and excluding veterans’ medical care, would reach 15 percent in 2025. That path is shown in the dotted blue line in the graph below.

The cut proposed by House Republicans would accelerate the erosion of non-defense appropriations’ purchasing power, as the dotted red line in the graph shows. The overall cut from 2010, adjusted for inflation and population and excluding veterans’ medical care, would be 22 percent — leaving funding at the lowest level by this measure seen since before 2010.

That would have a real impact: non-defense appropriations fund many important public services, including support for education, help to people and families with low incomes in affording decent housing and child care, infrastructure, scientific and medical research, law enforcement, environmental protections, and basic government services like administering Social Security, to give some examples. Shrinking funding in these areas would leave even more needs unmet and undermine basic government functioning.

Policymakers should reject House Republicans’ decision to cut overall 2025 spending below the already low levels set in the debt limit agreement. Rather, they should step back, reevaluate, and strive for funding levels that can accommodate rising costs and better meet the nation’s needs.

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