The way Congress funds the government is a mess. The reasons can be petty or structural, but most Americans only see the end product — dysfunction and enmity. Partisanship, worries about the deficit, and delays from previous years all contribute to Congress’ inability to pass appropriation bills by Oct. 1, the beginning of the fiscal year. To ensure the government does not shut down, Congress increasingly relies on a stop-gap measure — Continuing Resolutions.
Imagine sitting down with your partner/spouse to discuss next year’s finances. There are some major and minor items on the to-do list. It’s time to ditch your toddler’s crib for a bed. You want to spend more on dining out. You need to plan for your sister-in-law’s destination wedding. You want to replace the fence, but your spouse wants to replace the washer-dryer.
Now, consider that you agree on everything except the fence vs. appliance issue. There is just no budging for either of you. What if that impasse made it so you couldn’t buy the bed or the plane tickets?
Welcome to the world of federal government spending.
The Constitution (Article I, Section 9, Clause 7) requires that Congress create the legislation necessary to appropriate funds from the US Treasury to the various agencies. Normally, those bills are for a single fiscal year that starts October 1 and ends September 30. Just like within our families, Members of Congress often disagree on what should or should not be in those bills. If Congress is unable to come to an agreement by October 1 of any given year, agencies can no longer draw money from the Treasury, and their operations must cease.
Only three times since 1977 has Congress fully funded the government by Oct. 1. It is a good thing they have a backup plan – the dreaded Continuing Resolution (CR). CRs generally allow agencies to continue to draw funds at the current (or sometimes a lesser rate) for a defined period. But they come at a steep cost.
Functionally, CRs block agencies from beginning new projects. You are no longer able to buy that toddler bed or purchase that plane ticket. CRs also tend to increase the cost to the government — those goods probably cost less today than they will in the future. Because CRs rarely increase funding, you cannot spend more on dining out at this time either.
If the funding is delayed long enough, agencies may be unable to hire or contract for the services they had planned, leading to delays and increased costs as projects get moved further and further into the future.
This is not academic. It has happened. Over the past 45 years, Congress has needed to enact approximately four CRs per year. And in the fiscal year 2001, the worst year on record, Congress enacted 21 continuing resolutions from October 1 to December 21.
Some years, Congress is unable to agree on what the top line should be – the total amount of government spending. Prior to the Budget Control Act of 2011 (BCA), that slowed the process. However, under the BCA, from FY13-FY21, those top lines were set in statute removing that impediment. While Congress often modified those toplines, during those years, Congress averaged three CRs a year and never finished before mid-December. Not much of an improvement.
The obstacles are challenging and have very little to do with the actual dollar amounts given to programs. For Congress to work effectively compromise is a necessity. Yet, in the current political environment, compromise comes with no reward for politicians of either party.
Another factor that has caused a slowdown over the last decade was a change in practice. In 2011, Congress effectively did away with the practice of earmarking funding for specific projects. Remember the bridge to nowhere? But in doing so, they took away a key piece of leverage that appropriators and party leaders used to get support for spending bills.
In general, Members of Congress reflect their constituents; otherwise, they become former Members of Congress. And, in general, people think the government spends too much. But they don’t agree on where the cuts should be.
That leads many Members to reflexively oppose spending bills. However, with member projects (earmarks), Members could go back to their voters and say “I know you didn’t want me to support that extra spending, but look what I have for you: a new senior center and improvements to the Air National Guard Base.” Earmarks allowed for the cobbling together of majorities, and more importantly, supermajorities in the Senate to get these bills passed.
Congress is doing directed funding again. I, for one, hope they do it judiciously but consistently, as this will help to wrangle the votes necessary to get bills passed sooner rather than later. Last year, the new direct spending system allows House Members to request up to 10 projects across all 12 appropriations bills. In the Senate, old rules seemed to apply and there were no obvious limits to how many or the magnitude of projects in the bills. This year seems to be following the same basic pattern.
Back to our family example. After much discussion, you have achieved agreement on the numbers. You know the type of toddler bed, how often you will go out to eat, whether to make wedding travel arrangements, and a starter amount to consider a fence while purchasing a new washer. Then you think, this is going well, let’s talk about a few other things that never get resolved on their own. You want your spouse’s parents to give one month’s notice before visiting and your spouse wants a puppy (knowing you are allergic to dogs).
These are called legislative riders, add-ons to funding bills that are not necessarily funding-based. Those are the main impediment to finalizing appropriations bills, as they are put in by Congressional leadership, not the appropriators. Notable issues that lend themselves to being riders include abortion policy, vaccine mandates, Guantanamo Bay detainees, and many more.
This year Democrats are in nominal control of the House, the Senate, and the White House. That would lead one to believe they can set the terms for the bills and ensure their priorities are funded. But in the Senate, because of the filibuster, you need 60 votes – not a simple majority of 51- to enact spending bills. And even 51 is hard to come by as we saw with the Inflation Reduction Act. Republicans are supporting their constituents’ desires for the status quo, and Democrats, who may lose control of the majority in January, believe they have the right for the bills to reflect their priorities.
Funding the government on an annual basis is a difficult process. A lack of incentives to buck the party line makes it even harder. Changes in how the process works, like eliminating the filibuster in the Senate, could provide measurable help, but they won’t solve the entire problem. Only a groundswell of discontent from voters at the inefficiencies caused by the delays would move the needle. But that is a long shot unless there is total government failure.
In the meantime, expect Congress to miss deadlines, waste resources, and pass more CRs.