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New stopgap funding bill likely to extend into early 2022

Democrats, Republicans not yet settled on exact duration of temporary spending bill ahead of Friday deadline

House Appropriations Chair Rosa DeLauro, D-Conn., left, speaks with ranking member Kay Granger, R-Texas, before a full committee markup on June 29, 2021.
House Appropriations Chair Rosa DeLauro, D-Conn., left, speaks with ranking member Kay Granger, R-Texas, before a full committee markup on June 29, 2021. (Bill Clark/CQ Roll Call file photo)

Democrats and Republicans on Monday haggled over details of a stopgap spending bill that appears likely to run into late January at a minimum, with Republicans still trying to extend the duration into February or March.

Sources said House Appropriations Chair Rosa DeLauro, D-Conn., wants to file the temporary spending bill Tuesday with a goal of passing it in the House on Wednesday. That would presumably give the Senate enough time to clear it for President Joe Biden’s signature before the current stopgap funding law expires Friday.

Extending the continuing resolution into late January would represent a compromise between DeLauro, who previously was pushing for a shorter two-week CR, and senators from both parties who say more time is needed to wrap up work on fiscal 2022 appropriations bills.

Negotiations were ongoing, however, with Republicans arguing for more time. Senate Appropriations ranking member Richard C. Shelby told reporters Monday night that he prefers a stopgap through February or March. “I think it gives us more time to seriously sit down,” the Alabama Republican said.

The stopgap measure is expected to contain minimal tweaks to current spending levels, or “anomalies,” according to sources. Anomalies are provisions that allow federal agencies to alter their spending levels and start projects they wouldn’t otherwise be allowed to under CRs, alleviating some of the frustration with what’s supposed to be a fallback measure. 

Before Thanksgiving, DeLauro said she didn’t want any anomalies in the CR, as a means of keeping the pressure on lawmakers to compromise and finish the full-year bills. The Office of Management and Budget sent lawmakers a list of anomalies earlier this month that would be needed under a February stopgap bill, according to a person familiar with the talks. 

Hanging over the talks is the possibility of a full-year CR, which would generally continue spending at fiscal 2021 levels, if the House and Senate can’t reach agreement.

A full-year stopgap for all 12 appropriations bills would be unprecedented in modern budget history but would preserve anti-abortion language and other policies that were agreed to when Donald Trump was president.

The impact on the Defense Department, which has always had a regular appropriations bill enacted in modern times, would be particularly pronounced. For instance, Democrats point out that in order to meet the 2.7 percent pay raise for troops set to take effect Jan. 1, the rest of the Pentagon budget would need to be cut. 

“The impacts of a full-year CR are too onerous for the country to bear. This is unquestionably true for those who claim to care about defense programs and national security,” Senate Appropriations Chairman Patrick J. Leahy, D-Vt., said in a Nov. 4 floor speech. “This fact alone should bring all parties to the negotiating table.”

The two key appropriations holdups are funding levels and policy riders.

Republicans are opposed to a 2 percent boost for defense accounts in House bills while foreign aid and domestic programs would get around 16 percent more than the prior year. 

Senate Democrats’ versions of the fiscal 2022 spending bills are a little closer to the GOP position on allocations. They would boost defense by 5 percent, in line with bipartisan levels in the annual defense authorization bills, and add about 13 percent to nondefense funds above the previous year.

Shelby has insisted on parity — or equal increases between defense and nondefense. His House counterpart, Texas GOP Rep. Kay Granger, has been less dug in on strict parity and more interested in ensuring a robust defense and national security budget.

Republicans also are dug in on retaining restrictions on public funding of abortion and other policy riders that have been in place for years. And they want Democrats to agree to drop “poison pill” policy riders as a condition for negotiating full-year spending bills.

DeLauro said she would “entertain” a higher defense funding level but does not accept GOP senators’ “extreme position” that Democrats “recede on an unknown number of policy issues before” the two sides begin negotiations.

To-do list

Stopgap funding legislation sometimes serves as a catalyst for deal-making on other bills, by giving lawmakers a reason to stick around Washington late into the year. But punting the CR into next year doesn’t mean lawmakers can abandon another must-pass measure: raising the statutory debt limit.

Congress raised the debt ceiling by $480 billion last month, bringing the total limit to $28.9 trillion. Treasury Secretary Janet L. Yellen has urged Congress to raise the debt limit again by Dec. 15 to avoid any possibility of the government running out of money to pay all its bills on time.

Some independent analysts estimate the Treasury might not exhaust its borrowing authority until sometime after mid-December, perhaps into the first half of January.

But lawmakers appear unwilling to test financial markets’ patience, and bipartisan talks between Senate Majority Leader Charles E. Schumer and Minority Leader Mitch McConnell have begun on a potential path forward that may involve another short-term fix, according to sources familiar with the talks.

But it seems unlikely that any agreement along those lines would come together in time to be attached to the CR, which needs to be signed into law by Friday at midnight.

Also on next month’s priority list is the roughly $2 trillion budget reconciliation package that represents a major chunk of Biden’s domestic agenda. 

Punting a final resolution on fiscal 2022 appropriations until next year would give Democrats more room to try to round up the votes in the Senate to pass the reconciliation bill, which party leaders want to send to Biden’s desk in time for Christmas.

But it’s not a “must-pass” measure like stopgap funding or the debt ceiling, so a lengthier CR gives hesitant lawmakers like Sen. Joe Manchin III, D-W.Va., less of a reason to stick around and help expedite passage of the reconciliation bill.

Other riders, Medicare cuts

Still to be determined is what other legislative riders might be attached to the year-end CR, without the much larger omnibus funding package as a vehicle. Authorizations expiring Friday along with current stopgap funding include the National Flood Insurance Program and Temporary Assistance for Needy Families.

Without congressional action, on Jan. 1, across-the-board cuts to Medicare reimbursements will take effect after lawmakers delayed the cuts in April.

And without legislative language providing a waiver from statutory pay-as-you-go requirements, within 15 days of the end of the current session, more than $388 billion in cuts to mandatory program benefits, including Medicare, farm subsidies and many more, would be triggered.

Due to broad pay-as-you-go exemptions for large programs like Social Security, the Congressional Budget Office says that only about $80 billion to $90 billion would actually be cut, including about $36 billion from Medicare. But the remaining cuts could completely wipe out dozens of smaller programs.

Several hospital groups wrote to congressional leaders Monday urging them to stave off both sets of Medicare cuts, calculating that the combined hit to their reimbursements could top $14 billion next year.

“Additional Medicare reductions to providers are not sustainable and put our members’ ability to care for their patients at risk,” groups including America’s Essential Hospitals, the American Hospital Association and others wrote in the letter.

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