5 big funding questions awaiting Congress in January

Congress is, yet again, ramping up the risk of a government shutdown — with less than a month left until the first deadline.

Lawmakers departed the Capitol earlier this month without an agreement on overall spending levels, which are a critical prerequisite to negotiating a broader funding deal. They wanted that Step One agreement weeks ago, but disagreements over issues such as how severely to cut non-defense spending and how to handle controversial riders have held up discussions.

Even when they can get those numbers, it typically takes Congress several weeks to hammer out the thousands of details needed to write a government spending pact. When lawmakers return, they'll have only two weeks before the first deadline on Jan. 19 — which could shutter parts of the government — and another two weeks after that before a total shutdown on Feb. 2.

That's to say nothing of the stalemate over border security and Ukraine aid.

Unlike more recent shutdown threats, a short-term patch is not an obvious escape hatch this time. Democrats and some Republicans are harshly rejecting Speaker Mike Johnson’s fallback plan to extend a stopgap spending bill through the rest of the fiscal year, citing funding limits in the summertime debt deal that would impose tens of billions of dollars in cuts if that happens.

That debt package, negotiated by President Joe Biden and former Speaker Kevin McCarthy, should have taken care of the heavy lifting, setting the parameters for a spending compromise. Instead, House Republicans have repeatedly undercut the deal as senators have embraced additional emergency spending that exceed the debt deal's caps.

These five sticking points remain as negotiations continue:

More defense funding

The debt package set a funding level for national defense programs that is one of the least controversial items in a bitter spending fight. But there's still a debate to settle.

That debt agreement also set a ceiling of $886 billion for national defense programs, a 3.2 percent increase in line with Biden’s budget request for the fiscal year that began on Oct. 1. Lawmakers used that total to write their compromise annual defense policy legislation, known as NDAA, which passed both the Senate and the House with bipartisan support.

However, there's still widespread desire to provide the military with additional money. Senate Democrats and Republicans have wanted to add about $8 billion in “emergency” funding to pad out the Pentagon’s budget, deeming the amount requested by Biden inadequate. But House conservatives are demanding absolutely no funding above the debt law’s spending caps.

Big cuts to non-defense funding

The debt accord limits non-defense funding to $704 billion for the current fiscal year, a more than 9 percent cut compared with current funding levels. But a handshake deal that accompanied the agreement softened that blow, potentially providing up to $69 billion in additional money for domestic programs.

Conservatives, of course, want to nix that extra money. Democrats, in turn, have balked at their demand. More on that below.

Separately, Senate Democrats and Republicans also agreed to spread an additional $6 billion across their appropriations bills that would fund the Department of Homeland Security, the Department of Health and Human Services, the State Department, the Justice Department and more. But again, House hard-liners are pushing to strictly adhere to the debt law’s funding limits, which senators are unlikely to accept.

Conservatives oppose ‘emergency’ cash

That $69 billion handshake deal — as well as the Senate’s effort to pad out their spending bills with $14 billion extra — both fall under the category of "emergency" cash, a routine maneuver that is designed to get around the debt law's funding caps.

Democrats reject the categorization of the handshake deal as a “side agreement” to the debt accord, arguing that it was a critical part of the law negotiated by both parties. That includes about $25 billion in “changes in mandatory programs,” a budget tactic used by both parties in which savings are scored on paper and used to boost spending elsewhere.

The side deal also fulfills a Republican priority by rescinding about $10 billion for IRS enforcement that Democrats provided through their party-line health care, climate and tax law last year. It yanks back about $11 billion through a certain Commerce Department expense fund and includes $23 billion to multiple agencies that bypasses the debt law’s caps.

House conservatives want to ditch all of that, even the routine pieces, chalking it all up to “gimmicks.” But Democrats insist the side agreements are just as much a part of the deal as the caps, which hard-liners insist on following.

“We all shook hands, we passed it,” Senate Appropriations Chair Patty Murray (D-Wash.) said in an interview earlier this month. “And now the speaker is saying: ‘Never mind, we’re going to go backwards.’”

Even some House Republicans disagree with the hard-liners’ approach, arguing that these complicated "side" parts of the debt law serve a real purpose.

“A rescission is not a gimmick,” said Rep. Mario Díaz-Balart (R-Fla.), a senior appropriator. “A lot of them are real savings.”

Poison pills

Lawmakers on both sides agree they need to ditch contentious policy provisions, known as “poison pill” riders.

That’s especially important this time around, as timing comes down to the wire with no clear off ramp. House Republicans loaded up their versions of spending bills with provisions that would severely restrict abortion access, ban funding for drag shows and Pride flags, defund diversity and inclusion efforts across the federal government and much more — all of which Senate Democrats and the White House are sure to reject.

But getting rid of those provisions will prove tough for Johnson, who is continually walking a fine line between hard-liners hellbent on including such policies and vulnerable moderates who don't want to have to defend them back home.

“Some will survive, some will not. I think the ones that cause a problem will probably not be there,” Rep. Tom Cole (R-Okla.), a senior appropriator, said of policy riders. “If both sides don't agree, you're not going to put it out there.”

How to sell it

Typically, the obvious way to package all 12 spending bills together and pass them quickly is what's known as an omnibus. But some members have lost patience on using that type of broad funding vehicle, which means leaders might need to find another piecemeal way to pass spending bills — taking up more time they don't have.

Johnson tried to stagger government funding deadlines in an attempt to avoid that outcome. Money for the Departments of Agriculture, Transportation, Energy, Veterans Affairs and more will expire on Jan. 19. Cash for the rest of the government, including the biggest domestic programs and the Pentagon, runs out on Feb. 2.

Congressional leaders could certainly package their annual spending bills in two or more smaller funding bundles and pass them before both deadlines, which would technically be more of a "minibus" than an omnibus. But that strategy further risks time running out, compared with muscling one behemoth bill across the finish line.

The last time lawmakers didn’t use the omnibus approach, there was a record-breaking partial government shutdown under former President Donald Trump.