In a worst-case scenario if Speaker Mike Johnson carries out his threat of a yearlong continuing resolution, large-scale furloughs of federal workers, contract cancellations and severe disruptions in a range of government services are likely, according to Senate Appropriations aides.
In one example provided by GOP staff, the Federal Aviation Administration would be forced into a hiring freeze and could have to furlough workers for more than 20 days if across-the-board cuts that would trigger under a full-year continuing resolution take effect.
Johnson, R-La., is taking a hard line in negotiations with Democrats over spending ceilings for final 2024 appropriations bills in part because of the leverage he has with those automatic cuts as a backstop.
Senate Appropriations ranking member Susan Collins, R-Maine, is highlighting potential impacts to try to preempt House GOP pressure tactics, as is her counterpart, Senate Appropriations Chair Patty Murray, D-Wash., who on Thursday released her own fact sheet on what a “sequester” would mean.
The pushback from Collins, a fellow Republican defense hawk, may carry more weight with Johnson, a former Armed Services panel member who represents several military installations in his congressional district, including Barksdale Air Force Base.
Under a yearlong CR, defense could be level-funded at the current rate of $859.8 billion. Still, that’s a 3 percent reduction — before inflation — from the fiscal 2024 cap agreed to in the spring debt limit law and envisioned in the defense authorization conference report.
In a Nov. 30 letter to Collins shared with CQ Roll Call, Air Force Secretary Frank Kendall said his service faces a $13 billion reduction in buying power under a flat-funded CR for the rest of the year. In a worst-case sequester scenario, with the likelihood of an exemption for military personnel funding, the remaining Air Force accounts could take an 8 percent hit, Kendall wrote.
Even with personnel accounts exempt from cuts, the department would struggle to fund its NDAA-mandated 5.2 percent pay raise for servicemembers next year. A yearlong stopgap measure would delay ground- and air-based legs of the nuclear “triad” modernization effort; delay 19 specific initiatives to counter China totaling $4.8 billion; prevent 34 new military construction projects totaling $1.6 billion; and more, Kendall wrote.
In a letter released late last month, Joint Chiefs of Staff Chairman Gen. CQ Brown Jr. laid out his view of impacts on all the services, which Collins highlighted in a floor speech and Murray pointed out in her fact sheet.
The exact level of defense spending in a full-year CR remains unclear; it could be flat-funded or subject to a 1 percent haircut, depending on the White House budget office’s eventual interpretation. That would push cuts to more than 4 percent from the fiscal 2024 spending cap, and higher if military personnel are granted an exemption, since other accounts would have to absorb the blow.
‘Side deal’ sidelined?
For nondefense accounts in fiscal 2024, the debt ceiling law set a cap on spending nearly 7 percent lower than the previous year’s for all programs outside of veterans health care, which was universally assumed to get a slight bump. After factoring in a “side deal” to boost available spending through various gimmicks and accounting maneuvers, comparable nondefense funding would at least be level-funded, however.
But with House Freedom Caucus and other conservatives pushing to throw out that side deal, the actual amount of nondefense spending allowed would be held to $703.7 billion. That’s more like an 11 percent cut from the all-in fiscal 2023 total if VA health care is exempt.
A straight “date change” CR extending fiscal 2023 spending for the rest of the new fiscal year, with only limited exceptions, would breach that cap and trigger automatic cuts to most nondefense discretionary programs. The Veterans Affairs Department and Pell Grants would be exempt under the law.
Due to scoring complications with a CR and uncertainties about how the White House budget office would implement the cuts, it’s unclear what the exact percentage reductions would be. Informal calculations by CQ Roll Call and some experts on and off Capitol Hill range from 7 to 10 percent.
In the absence of clarity on how big the cuts ultimately might get, Senate GOP appropriations aides looked at just the impact of flat funding on various programs — what a yearlong CR would mean in the absence of further across-the-board cuts:
- Federal law enforcement aid would suffer “operational cuts” of $1.2 billion, or more than 4 percent, by having to shift available funding to keep pace with inflation and higher rents. That would lead to an across-the-board hiring freeze at agencies like the U.S. Marshals Service.
- Approximately 300,000 households could be affected by a loss in Section 8 housing assistance due to lost purchasing power.
- Student borrowers facing their first repayments of federal loans since before the pandemic struck will see longer wait times for live support, which could lead to increased loan delinquencies and defaults.
- The Centers for Disease Control and Prevention would find itself with too much money on pandemic-era programs, and not enough to respond to new threats.
Murray’s staff, meanwhile, used a scenario assuming cuts north of 9 percent on nonexempt federal programs under a yearlong CR that triggers the automatic sequester.
Some potential impacts they found are the loss of nutrition aid for 2.7 million low-income women and children; quadrupled wait times at border ports of entry; over 900 fewer food-safety inspectors; and hundreds of thousands of households losing federal housing aid.
In line with Collins’ staff analysis, Murray’s memo cites furloughs of FAA safety inspectors and air traffic controllers and services shut down at more than 100 air traffic control towers with resulting flight delays and cancellations.
The full fact sheet is here.
‘Law of the land’
The simplest way to avoid such impacts on both the Defense Department and domestic agencies would be to negotiate full-year spending bills. But it’s not that simple as Johnson and his Senate counterparts have different ideas about what was agreed to in the debt limit law.
The speaker wrote in a letter to GOP colleagues Thursday that the debt limit law is “the law of the land, supported by over two-thirds of our conference, and it provides the framework from which we are negotiating final outcomes.”
Both parties in the Senate and House Democrats are calling for final numbers that reflects the side deal negotiated in the debt limit talks between then-Speaker Kevin McCarthy, R-Calif., and President Joe Biden. On top of that, Senate appropriators want to add nearly $14 billion in emergency spending.
Influential House Republicans, ranging from Rules Chairman Tom Cole, R-Okla., himself a senior appropriator, to House Freedom Caucus Policy Director Chip Roy, R-Texas, want Johnson to toss out that side deal and push for a topline agreement at the levels laid out in the text of the debt limit law.
Accordingly, there was no indication that a topline deal is imminent after both chambers left town on Thursday. When they return after the weekend, they’ll have one more week with both chambers in session to settle on numbers the Appropriations Committees could use to write their final bills.
Otherwise, it could be exceedingly difficult to pass all 12 spending bills by the two-tiered Jan. 19 and Feb. 2 deadlines under the latest stopgap law. And with Johnson’s pledge to avoid any more short-term CRs, it’s either a bicameral deal on full-year bills or the full-year stopgap bill senators and the military abhor — or a partial government shutdown.