Guaranteeing A Continuing Resolution for the Start of Federal Fiscal Year 2025

Introduction

The October 1st start of federal fiscal year 2025 is still more than 120 days away, but it is not too soon to predict that Congress will fail to enact all of the regular appropriations bills by then, thus necessitating – hopefully – the enactment of a Continuing Resolution (CR) to keep some or all of the government open and functioning. Congress will certainly keep their CR streak intact; in all but three of the past 47 fiscal years, there has been at least one CR enacted at the start of the fiscal year, and for twelve of the last fourteen consecutive years, including the last five consecutive years, all federal agencies started the federal fiscal year without their regular appropriations having been enacted into law.
How can I be so certain in my prediction so far in advance? Besides a lengthy track record, four factors that are already known form the basis for my current prediction.

Deciding Factors

First, the House Appropriations Committee has set a contentious foundation for the start of this year’s appropriations cycle. President Biden submitted his proposed Fiscal Year 2005 budget to the Congress on March 11. To its credit this House Committee is out of the starting gate early in the annual appropriations cycle by announcing on May 16 the subcommittee allocations that form the basis for its subsequent markup of the twelve individual appropriations bills. Appropriations Committee Chair Tom Cole stated that this allocation adheres to the top-line funding levels set by the 2023 Fiscal Responsibility Act. However, Democrats strongly disagree, noting that it fails to provide for the one percent increase in both the defense and the non-defense accounts provided for in that law, and ignores the “side-agreements” negotiated between President Biden and then-Speaker McCarthy to get that Fiscal Responsibility Act adopted. Chairman Cole acknowledges these omissions, saying that his allocations are “an opening position in negotiations, the way you always start.”

Second, the Democratically controlled Senate, along with House Democrats, are likely to insist on a very different funding allocation, one that is aligned with the overall Fiscal Responsibility Act levels, including both the one percent increase for both defense and non-defense accounts as provided for in the 2023 law, as well as following through on the side deals negotiated last year. Given the near equality of Republicans and Democrats in the House, at least for now the Democrats on both sides of the Capitol have a strong bargaining position on any contentious legislation such as appropriations levels and policy riders.

Third, this November is the hotly contested presidential election and both political parties and both chambers of Congress will likely not want to lock in federal funding until the next president is elected. In addition, there is a high number of congressional voluntary retirements and congressional contests that could further change the configuration of the new Congress that is to be sworn in on January 3, 2025, so members will want to provide as much time as possible after Labor Day for campaigning and for avoiding “tough” votes.

Finally, as has been the practice for every presidential four-year cycle since 2008, Congress starts the new federal fiscal year with a Continuing Resolution that runs from October 1 through, typically, mid-November, at least. Once the outcome of the presidential election is known – if it is known by then – Congress could respond to the election of a new President by adopting a further Continuing Resolution extending coverage until some weeks after the January 20, 2025, Inauguration.

Action Already Underway

The House Appropriations Committee is already moving quickly on its promise to markup the Fiscal Year 2025 regular appropriations bills. On May 21, the Subcommittee on Military Construction and Veterans Affairs adopted its legislation, although on a party-line vote. On May 23, the full Committee approved that Subcommittee bill, with further amendments, also on a party-line vote. In addition, the Legislative Branch Subcommittee adopted its proposal on May 23.

During June, the House Committee intends to have all twelve subcommittees complete their individual subcommittee markups, and the full Committee plans to approve all twelve of the regular appropriations bills by July 10. Floor action on appropriations is expected to begin in early June and, according to House Republican majority leader Scalise, conclude by mid-August. That’s an ambitious schedule even under ideal circumstances. I’m also expecting White House veto threats on every bill the House considers.

The Senate Appropriations Committee has not yet announced its subcommittee allocations nor set a schedule for its subcommittees or full committee action. But action by only the House will not do enough to alleviate the need for a CR to start Fiscal Year 2025 on October first.

Conclusion

Agencies and federal contractors should not be surprised at the likelihood of enacting a CR at the start of federal Fiscal Year 2025 for all or most of the Federal Government. Preparations are easy with so much lead-time and the checklist for preparations by contractors is well-known. While the specific duration and scope of the CR is not yet knowable, what is certain is that at least one CR will be enacted to begin Fiscal Year 2025. Act accordingly.

At Centre Law, we have extensive experience supporting contractors in dealing with the preparation for and fallout from continuing resolutions and delayed agency funding and contracting.

If you have any questions about this blog or the covered information, or need any additional information, please do not hesitate to contact the author or the Centre Law attorney with whom you work.