Appropriations Update: January 14, 2022

With funding for the federal government set to expire on February 18, lawmakers must come together on a bipartisan agreement or once again extend funding at current levels. Currently, the government is operating on a continuing resolution (CR) with funding levels provided under the last budget signed into law by former President Trump in 2020. The Chairs and Ranking Members of the House and Senate Appropriations Committees – known as the four corners – face significant challenges to reach an agreement. 

Senate Appropriations Chair Patrick Leahy (D-VT) and Ranking Member Richard Shelby (R-AL) and House Appropriations Committee Chair Rosa DeLauro (D-CT) and Ranking Member Kay Granger (R-TX) met this week to discuss the path forward. According to their staffs, the bicameral, bipartisan meeting was “constructive,” although no deal has emerged. All four members released a joint statement stating, “We look forward to further conversations in the coming days, with the shared goal of finishing our work by the Feb. 18 government funding deadline.” Senator Shelby and his staff indicted that there is a significant amount of detail that needs to be ironed out before any deal could be reached. He indicated that another short-term CR may be needed. Senate Appropriations Chairman Leahy said, “We appreciated the opportunity to have a constructive Four Corners conversation today on completing fiscal year 2022 appropriations,” on Thursday. 

However, there is emerging concern about ongoing disruptions created by the current funding levels, particularly for the military. Military officials have warned of effects to service member bonuses and other delays in investment and modernization plans. The Pentagon has expressed concerns, as Admiral Michael Gilday, the chief of naval operations, stated “A yearlong [continuing resolution] is completely new territory that we have not dealt with before that will have significant impacts across our military.” 

Additionally, the delay in passing a budget could impact federal hiring, COVID relief funds, annual health care and tax related extension provisions, and other national security measures. As OMB awaits the confirmation process of Acting Director Shalanda Young, the agency has not began directing agencies to prepare for a shutdown. However, OMB in late 2021 did warn of the hiring freezes and funding gaps if Congress passes a year long CR. To see the White House fact sheet, please see here

Given the limited amount of time on the Congressional calendar, there is not much time to advance a deal. Of note, if the Build Back Better Act does not advance, there is a possibility an appropriations package would be utilized as a vehicle to include riders such as tax extenders, climate related priorities, and other competitive measures. However, any traction for riders would require a bipartisan agreement. Representative Marcy Kaptur (D-OH), chair of the Energy and Water Appropriations Subcommittee, recently stated, “Build Back Better isn’t ready yet. We are, and we need to get that done.”