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In June, lawmakers avoided defaulting on the national debt by enacting the Fiscal Responsibility Act (FRA). That legislation suspended the debt limit and also established discretionary spending limits for two years. As lawmakers grapple with how to fund the government for fiscal year 2024, provisions in the FRA have reignited debates about spending levels and are complicating the legislative budget process. Lawmakers have not passed full appropriations for fiscal year 2024 (October 1, 2023, to September 30, 2024), but they passed a continuing resolution to temporarily fund the government until November 17, 2023. If lawmakers cannot agree on appropriation bills once that CR expires, there may be a government shutdown.
As defined by the House of Representatives, an appropriation is a law of Congress that provides an agency with budget authority. Appropriations allow agencies to incur obligations and to make payments from the U.S. Treasury for specified purposes.
In both the House and Senate, responsibility for appropriations is allocated across 12 subcommittees of the full Committee on Appropriations. The subcommittees are generally aligned according to particular government functions (for example, defense). Ideally, each subcommittee would report a separate bill, the House and Senate would come to an agreement between their versions, and send to the President for signature before October 1.
However, final appropriations are not typically completed before the beginning of the new fiscal year. Congress has only completed the process before the beginning of the fiscal year four times in the last 47 years, most recently for fiscal year 1997. If Congress fails to enact the 12 annual appropriation bills by October 1, a government shutdown could occur because agencies will not have authority to carry out most operations. Congress can avoid a government shutdown by passing a temporary funding bill, known as a continuing resolution (CR), which would allow governmental operations to continue. CRs expire after a designated timeframe (the current one expires on November 17, 2023), at which point Congress would need to agree on the 12 appropriation bills, send another CR to the President for signature, or risk a shutdown.
The Fiscal Responsibility Act affects appropriations in three ways:
The beginning of fiscal year 2024 has already begun, and lawmakers will need to find a permanent solution to continue funding government activities beyond the expiration of the CR. To avoid disruptions, lawmakers should focus on completing the appropriation process in a timely manner moving forward, which would allow for responsible consideration of competing spending priorities as well as acknowledge our unsustainable national debt.
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