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Big Picture on Fiscal Year 2018 Funding Still Unclear

September 21st, 2017

The U.S. federal government will be operating on a Continuing Resolution (CR) from October 1 through December 8, 2017. Essentially, this provides level funding for federal agencies, while Congress and the White House negotiate an overall spending number for Fiscal Year (FY) 2018. The CR was part of a larger deal that received much visibility earlier this month because it involved an agreement between President Trump and Congressional Democrats. In reaching the deal, the immediate threat of a government shutdown on October was averted.

Meanwhile, both the House and Senate have been moving forward various appropriations bills. House appropriators reported out all twelve appropriations bills, and then packaged them in two mega-bills for floor debate. Earlier this summer, the House passed four bills that were related to national security issues, and took up the remaining eight bills – referred to as an “octobus” by some – in early September. The legislation, H.R. 3354, passed the House on September 14th, but has little chance of getting through the Senate because it includes border wall funding and exceeds the budget caps for only defense spending, neither of which are appealing to Senate Democrats. Still, the House powered its way through over 200 amendments and two weeks of debate to get this done. On the Senate side, the Appropriations Committee is advancing its bills, and signaling an early holiday gift to NIH (another $2 billion increase) if all goes as planned.

Looming large and very much setting the stage for FY 2018 is the need for Congress and the White House to agree on a deal to raise the budget caps. The Budget Control Act (BCA) of 2011 continues to set limits on “discretionary” spending (both defense and non-defense) in the federal budget through 2021. The caps set for FY 2018 already require a cut of about $5 billion from FY 2017 levels. As a result, many in Congress are calling for a budget deal to lift the caps. Despite a temporary lifting of the sequestration level caps on two previous occasions, the overall BCA caps remain in place. Now that the government is funded for two months into FY 2018, attention has begun to turn to raising the caps.

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