Overview
CR Woes: Welcome back! After a much-needed recess, Congress is back in session for a final sprint heading toward election day. With just three weeks until government funding runs out and members set to hit the trail for their final campaign push in October, Congress has a major task on its to-do list in ensuring a funding bill is passed.
Late last week, Speaker Johnson unveiled his continuing resolution (CR), which would fund the government for six months and included the controversial SAVE Act, which requires proof of U.S. citizenship to vote in federal elections. The SAVE Act passed the House earlier this year with the backing of five Democrats and has the support of President Trump. However, as soon as the CR was released, the problems began. In addition to Democratic opposition to the SAVE Act, several defense hawks spoke out against the CR, saying this funding patch would pause new Pentagon programs for too long. Eventually, recognizing his proposed bill did not have enough support within the Republican party to pass, Speaker Johnson pulled the resolution from consideration on Wednesday.
A "clean" CR (free of additional legislation) to extend funding levels until sometime in December would garner more widespread support. Senate appropriators are already drafting a measure that runs until December 13th, which would be ready to go if the House is unable to reach an agreement.
The administration complicated matters further with a long list of budget anomalies, including an additional $15.4 billion for the Social Security Administration, among others. The request warned of major delays in Social Security benefits if Congress does not include this funding for the agency in the CR.
Lame Duck: While most of the energy in Congress is focused on the November election, there is still some buzz around what could be considered in the lame duck. Early this week, House Appropriations Chair Tom Cole (R-OK) stated that the President's $4 billion emergency funding request to address the collapse of Baltimore's Francis Scott Key Bridge along with several other natural disasters could be considered after the election. Although highly dependent on the outcome of the election, Congress could finalize the FY25 spending bills in December.
Debt Crisis Grows: The nonpartisan Committee for a Responsible Federal Budget released a report in late August that nominal spending is projected to increase by $3.5 trillion over the next 10 years. 87 percent of this growth is driven by Social Security, federal health care programs, and interest payments on the debt. Net interest costs will nearly double by 2034, growing from $892 billion this year to $1.7 trillion because of a combination of existing debt rolling over to higher interest rates and the addition of new debt totaling more than $20 trillion over a decade. Expect figures like these to loom large in any funding discussion, particularly among Republicans.
