House and Senate negotiators reached an accord to unlock final fiscal 2024 appropriations bills after nailing down the final defense and nondefense spending limits, party leaders announced Sunday.
The deal will allow for the total level of spending laid out in last year’s debt limit agreement, with $886.3 billion for defense and $772.7 billion for nondefense programs. The latter figure includes spending agreed upon but not written into the legislative text of the debt limit law.
Lawmakers tweaked the mix of offsets and budgetary accounting to hit the $69 billion nondefense “side deal” target, which comes on top of a “base” funding level in the law totaling $703.7 billion.
Gone is $10.5 billion in spending designated as an “emergency” to get around the regular limits and another $10 billion offset by caps on “mandatory” funds that weren’t going to be spent in the first place — known as zero-outlay changes in mandatory programs, or CHIMPs.
Speaker Mike Johnson, R-La., instead was able to secure $16 billion in additional rescissions of previously-appropriated funds, which includes $6.1 billion in new clawbacks of pandemic aid and $20.2 billion in IRS funding rescissions, more than double the earlier agreement.
Office of Management and Budget Director Shalanda Young on Friday said the White House wouldn’t accept any additional IRS rescissions beyond the $20.2 billion that’s included in the pact announced Sunday. The original deal last spring called for $10 billion taken out of IRS funding in fiscal 2024, and the same amount in fiscal 2025.
House Republican leadership staff said Sunday that they will continue to pursue additional IRS rescissions in the future and there is no agreement that additional IRS clawbacks are off the table in future negotiations.
An extra $1.4 billion would taken out of the Commerce Department’s “nonrecurring expenses fund” that had been set aside for next year’s bills. And some additional funds are freed up as a result of some extra housing-related receipts that have been identified, according to House Republican leadership staff.
Also, none of the $13.7 billion in emergency spending that Senate Appropriations Chair Patty Murray, D-Wash., and ranking member Susan Collins, R-Maine, included in their initial bills will be part of the final deal. That included $8 billion in Pentagon funds as well as $5.7 billion for nondefense accounts.
On the pandemic aid rescissions, aides to Senate Majority Leader Charles E. Schumer, D-N.Y., pointed out that clawbacks would come mainly from unused funding recently recovered by the Department of Health and Human Services. The cuts wouldn’t affect development of new vaccines and treatments, aides said.
In addition, Schumer rejected attempts to cut unspent housing aid provided in the 2021 pandemic relief package and climate-related provisions in the 2022 budget reconciliation law.
All in, the framework allows for a very slight overall increase in nondefense funding, about 0.2 percent above the previous year or a little more than $1 billion. Defense and security-related spending would rise by nearly $28 billion, or more than 3 percent.
Plenty left to hash out
While the agreement is a major step forward for the appropriations process, there is no deal yet on controversial policy riders that will need to be settled before a final appropriations package can be put together. Typically, an agreement on policy riders accompanies a topline deal, sources familiar with the process say.
Johnson said in a letter to his conference released Sunday afternoon that the deal would allow Republicans to “fight for important policy riders included in our House fiscal 2024 bills.”
However, in a joint statement Senate Majority Leader Charles E. Schumer, D-N.Y., and House Minority leader Hakeem Jeffries, D-N.Y., said they made it clear to Republicans that they “will not support including poison pill policy changes in any of the twelve appropriations bills put before Congress.”
In his letter, Johnson said that while the deal does not “cut as much spending as many of us would like,” it would allow Republicans to move the process forward and “reprioritize funding within the topline towards conservative objectives, instead of last year’s Schumer-Pelosi omnibus.”
That’s a reference to the $1.63 trillion fiscal 2023 spending law that cleared just before Christmas two years ago, negotiated in part by former Speaker Nancy Pelosi, D-Calif.
Schumer and Jeffries said the nondefense level laid out in the deal will “protect key domestic priorities like veterans benefits, health care and nutrition assistance from draconian cuts sought by right-wing extremists.”
Johnson wrote that after factoring in a small increase for the Department of Veterans Affairs that was part of the debt limit agreement, all other fiscal 2024 nondefense spending would fall below the previous year, for the first time in seven years.
Still, early reaction from members of the House Freedom Caucus, which has fought for deeper spending cuts and conservative policy riders all year, wasn’t enthusiastic.
In a message posted on X, formerly Twitter, Rep. Chip Roy, R-Texas, said abiding by the debt limit agreement’s spending limits was “terrible” and “we keep spending money we don’t have.” He wrote that conservatives would “wait to see if we get meaningful policy riders” but added the deal on the fiscal 2024 National Defense Authorization Act wasn’t a good omen.
There is also not yet an agreement on another short-term stopgap spending measure, which appears likely to be needed to avoid a partial government shutdown Jan. 19. The current stopgap bill runs out after Jan. 19 for four of the spending bills totaling roughly 20 percent of annual discretionary spending.
Agencies funded by the remaining eight bills would see their appropriations lapse after Feb. 2. That gives lawmakers little time to write the final legislation and get it passed through both chambers before a partial government shutdown ensues.
Johnson has pledged not to do any more short-term extensions, but sources familiar with the situation there’s been some talk of one more continuing resolution that would run through March 1 to give lawmakers time to write and pass all 12 bills.
Paul M. Krawzak contributed to this report.