In The Mix – with Guest Commentary from Madeline Pike (Tai, Ginsberg and Associates)
Earlier in the year, ACPA provided thoughts to its members on what would happen to transportation programs if the United States defaulted on its obligations by not raising the debt ceiling limit. While our country avoided one crisis, it seems another is lurking around the corner if Congress fails to come to agreement on lingering appropriations bills. As ACPA members are aware, annual appropriations bills fund critical transportation programs, including some research funds relied upon by the CP Tech Center and other research institutions across the country. To provide commentary this week on the status of the appropriations bills and the possibility of a government shutdown, ACPA has invited Madeline Pike of Tai, Ginsberg and Associates to offer insight.
Unless Democrats and Republicans in the House and Senate can come to a government funding agreement or Continuing Resolution (CR), the federal government will shut down on October 1, 2023. With limited calendar days and several must-pass pieces of legislation on the docket (National Defense Authorization, Federal Aviation Administration Reauthorization), House Republicans and Senate Democrats need to make significant concessions via the appropriations process in order to avoid a shutdown. House appropriators are taking a hard line, partisan approach to the process while the Senate is largely moving forward in a bipartisan fashion. To appease members of the GOP who are frustrated about the budget agreement in the Fiscal Responsibility Act (the debt ceiling deal), Speaker McCarthy and House Appropriations Chair Granger announced they will pass funding at lower levels than agreed to in the recent law. While shutdowns are rare, and deals are often cut in the 11th hour, substantial disagreements over Ukraine and defense funding, culture war issues, and cuts to domestic programs make the possibility of a shutdown legitimate.
Under the Antideficiency Act (31 U.S.C. §§1341 et seq.), federal government agencies must cease operations when their budget authority expires, except in certain circumstances when continued activities are authorized by law (i.e. operations funded by the Highway Trust Fund). The relevant laws that govern shutdowns have remained relatively constant in recent decades. However, in practice, the extent of government closure can depend on the political dynamics and which party controls the White House (to demonstrate shutdown impacts to the public). The Office of Management and Budget (OMB) requires each agency to publish contingency plans in the case of a shutdown. These plans must include:
a summary of agency activities that will continue and those that will cease;
an estimate of the time to complete the shutdown, to the nearest half-day;
the number of employees expected to be on-board (i.e., filled positions) before implementation of the plan; and
the total number of employees to be retained (i.e., not furloughed), broken out into five categories of exceptions to the Antideficiency Act, including employees (1) who are paid from a resource other than annual appropriations; (2) who are necessary to perform activities expressly authorized by law; (3) who are necessary to perform activities necessarily implied by law; (4) who are necessary to the discharge of the President’s constitutional duties and powers; and (5) who are necessary to protect life and property.
A new element that makes a future lapse in appropriations particularly sticky for transportation is a provision included in the Fiscal Responsibility Act. House Republicans inserted a provision in the debt agreement to incentivize completion of full-year appropriations that, if triggered, would impact funding from the Infrastructure Investment and Jobs Act. Rep. Massie (R-KY) sought to put pressure on Congress to complete annual spending bills in a timely fashion, and in doing so, his language to put a January 1 deadline on the appropriations process was included in the deal. At that point, if Congress has a continuing resolution (CR) at the prior fiscal year’s funding rate in place, a 1% cut/sequester will be automatically implemented.
While the IIJA included $68.5 billion in advance appropriations, which become available starting on Oct. 1, the monies could get hit by the across-the-board spending cuts starting more than halfway through the fiscal year (May 2024). The $886.3 billion cap on defense and related programs for fiscal 2024 would drop to $849.8 billion, or 1 percent below the enacted fiscal 2023 numbers. For nondefense programs, the fiscal 2024 cap would actually rise, from $703.7 billion to $736.4 billion, though that’s still 1 percent below the current fiscal year.
Senior Republican Appropriator Tom Cole (R-OK) has called this new budget reality an “experiment” so we will see how it incentivizes Congress to pass bills. The new caps would apply to all programs, even those in any of the dozen spending bills that Biden had already signed into law. But lawmakers would still have until April 30 before the sequester enforcement mechanism actually goes into effect. And if Congress resorts to a full-year continuing resolution rather than completing the regular spending bills, the sequester would be turned off.
Thanks, Madeline! Please read on for new deadline for award submissions, remaining ACPA events for 2023, and announcements of the 2023 RAISE Award projects.