The current continuing resolution (CR) funds the federal government through March 14, five and a half months into the current 2025 fiscal year (FY25). The CR was enacted on December 21, 2024, to prevent a shutdown, maintaining FY24 funding levels. With less than five weeks remaining, the nation is again facing the threat of a shutdown, counting on lawmakers to either pass another CR or finalize appropriations. Typically, the administration would have already released the President’s budget request for FY2026 by this time in February. To complicate matters further, Congress will also need to address the federal debt limit.
The Senate Budget Committee, chaired by Senator Lindsey Graham (R-SC), is marking up their proposed fiscal 2025 budget resolution today, offering a budget framework that advances their two-bill approach. The first bill would encompass the border, energy, and defense, while the second would tackle tax policies. To pass a government funding bill, Senate Republicans will need support from at least seven Democrats. Minority leader, Senator Chuck Schumer (D-NY) wrote a “Dear Colleagues” letter, stating “Democrats stand ready to support legislation that will prevent a government shutdown. Congressional Republicans, despite their bluster, know full well that governing requires bipartisan negotiation and cooperation.”
It is worth noting that the Senate blueprint does not address the debt ceiling. According to former Treasury Secretary Janet Yellen, the federal government is currently using “extraordinary measures” to delay reaching the debt ceiling, which was expected to be hit on January 21. Yellen noted that the duration of these measures is uncertain due to the challenges of predicting the government’s payments and receipts months ahead. Some estimates suggest that the “X-date,” the point when the government runs out of funds to cover its obligations, may not occur until the summer.
Over in the House, lawmakers were struggling to reach a consensus on a budget resolution that would advance a one-bill strategy combining Trump’s priorities with an extension of expiring tax cuts. Like in the Senate, due to the extremely narrow margins, any funding bill will require Democratic support. On Wednesday, the House Budget Committee announced their fiscal blueprint. The draft blueprint includes up to $300 billion in new funding for border security and defense while permitting Republicans to increase the debt limit by $4 trillion. A markup is expected to happen today.
While Congress is dutifully moving forward with the appropriations process, President Trump and OMB Director Russell Vought have been taking aggressing administrative actions that disregard the FY25 budget. Vought has openly shared his plans to ‘impound’ – refuse to spend appropriated funds. Impoundment is currently limited by the Budget Control Act of 1974, preventing the President from withholding funds without Congressional approval, except in certain cases like rescissions, where Congress is asked to cancel the funds. However, recent actions fly in the face of these limitations.
FABBS will continue to monitor these developments and update our funding dashboard accordingly.
