Will the Next Minibus Secure the Homeland?

On March 9, the President signed the Consolidated Appropriations Act, 2024 (P.L. 118-42), providing funding for six of the twelve appropriations bills (Agriculture/FDA, Commerce, Justice, Science, Energy and Water, Interior/EPA, Military Construction/Veterans, and Transportation/Housing bills), avoiding a partial government shutdown. The $446 billion law, constitutes about 27% of the

$1.66 trillion discretionary funding agreement between Senate Majority Leader Schumer (D-NY) and Speaker Johnson (R-LA). That agreement provides for essentially a freeze at FY 2023 levels for non-defense programs and a $28 billion (+3%) increase for defense programs.

In completing action on the Consolidated Appropriations Act, the bipartisan leadership reached a significant compromise on both funding and controversial “poison pill” riders. The funding, consistent with the Schumer/Johnson agreement, essentially freezes funding for non-defense programs at the FY23 level which is $51 billion below President Biden’s FY24 Budget request for the six bills. In trade for these funding cuts, the House agreed to drop virtually all of their policy riders related to abortion, guns, climate change, diversity and other issues. House Freedom Caucus opposition to the Schumer/Johnson funding agreement forced the decision to drop the controversial riders in order to garner the Democrat support needed for the House to pass the bill on a 339-85 vote. The Senate passed the bill 75-22. See Chart I  for a breakdown by Appropriations Subcommittee.

SECOND FY24 PACKAGE

Congress now faces a March 22 deadline for completing the remaining six appropriations bills, including Defense, Financial Services, Labor-HHS-Education, Legislative Branch, State-Foreign Operations, and Homeland Security. That package would reportedly total about $1.2 trillion. Shadowing those negotiations will be the future of the National Security Supplemental, including funding for Ukraine, Israel, humanitarian assistance for Gaza, Taiwan, the defense industrial base, and potentially border security.

In negotiating the final six bills, House and Senate negotiators need to comply with the Schumer/Johnson topline agreement, reconciling Senate bills, which have a modest increase in non-defense programs and House bills that feature a 21% cut in non- defense programs relative to FY23.

Major issues will need to be resolved, such as:

• Will the National Institutes of Health be reduced below FY23 levels as proposed by the House or get a modest increase as proposed by the Senate?
• Will Advanced Research Projects – Health, President Biden’s cancer initiative, be cut by 2/3, as proposed by the House or sustained at FY23 levels, as proposed by the Senate?
• Will the House approach, substantially reducing the Federal government role in Education, such as significant reductions in Title 1 Education for the Disadvantaged grants and freezing the size of Pell grants be adopted, or the Senate approach of freezes or small increases?
• Will the Legislative Branch bill continue the Member pay freeze that has been in place since 2009?
• Will Internal Revenue Service base funding be cut by $1 billion below FY23, as proposed by the House, or sustained at FY23 levels, as proposed by the Senate?
• Will family planning funding be eliminated in Labor-HHS or substantially reduced and restricted in Foreign Operations as proposed by the House, or sustained at FY23 levels as proposed by the Senate?
• Will the restrictions on Department of Defense health care services for women in the House bill be included?
• Will $75 million in election assistance grants to State and local governments opposed by Republicans be included in the Financial Services portion?
• Will the State-Foreign Operations bill ban funding for the United Nations Relief and Works Agency?

NATIONAL SECURITY SUPPLEMENTAL 

The Senate passed a $95.3 billion National Security Supplemental, H.R.815, on February 13, by a 70-29 vote. With opposition from former President Donald Trump and Senate GOP conservatives, the Senate-passed bill did not include compromise border security funding or immigration policy provisions. An earlier $118 billion version with border funding failed to get a Senate Floor vote. More than a month later, Speaker Johnson continues to link House action on the supplemental bill, including aid for Ukraine, to border security funding and policy/ legal changes.

Border security issues now affect the outlook for the national security supplemental, the FY24 Homeland Security bill, and the second FY24 package.

HOMELAND SECURITY APPROPRIATIONS

Of the six FY24 appropriations bills currently facing a March 22 deadline, the bill most likely to end up in a full-year continuing resolution is Homeland Security. For the first ten years after the Department of Homeland Security (DHS) was established in 2003, the measure was one of the most bipartisan bills in Congress (in the Senate, passing 93-1, 93-0, 96-1, 100-0, 89-4, etc.). Since 2014, the border security/immigration issue has taken center stage making the Homeland bill highly partisan. In FY15, it was the only bill left out of the FY15 Omnibus, as Congress focused on the status of Dreamers, resulting in enactment of a freestanding bill five months late.

Under the Fiscal Responsibility Act (implementing the June 2023 agreement Biden-McCarthy agreement), if any accounts are in a short-term continuing resolution beyond April 30, a 1% sequester would be imposed on all civilian and defense discretionary spending.

This trigger increases pressure on Congress to complete the Homeland bill. When Senate Republicans blocked the compromise border security package, Majority Leader Schumer eliminated $20 billion of border security funding in the National Security supplemental. It will be difficult to complete negotiations on the base Homeland bill without a resolution of the supplemental funding issue.

A full-year continuing resolution, operating at the levels established for the prior year, would be ineffective for any agency, but particularly for an agency like the Department of Homeland Security, whose mission is to prepare for and respond to the latest threats. For example, such a full-year continuing resolution, absent supplemental appropriations, would not include necessary resources to:

Increase the number of Border Patrol agents to deal with or reduce the surge of migrants at the border:

• Procure non-intrusive inspection equipment and hire staff to address the fentanyl crisis
• Increase the number of Immigration and Customs Enforcement detention beds
• Increase the number of asylum officers to deal with the millions of people who have been allowed into the country pending resolution of their asylum claims
• Deal with the latest cyber threats, particularly during an election year
• Upgrade Coast Guard assets such as the Fast Response Cutter and Polar class icebreakers to address drug, immigration, and climate change issues

A full-year continuing resolution for Homeland would also result in fewer and smaller procurements, potentially limiting any new starts.

The fights over the second minibus risk the potential of a partial shutdown as the March 22 CR deadline approaches. Will another CR extension be needed before the package is adopted? It’s looking more and more likely. If so, how long will the extension be? That’s important because the FRA 1% sequester trigger is required if full-year funding isn’t finalized before April 30.

With the March 22 deadline approaching, leadership had to decide this weekend whether to include Homeland as a full bill, a full-year continuing resolution, or perhaps a fifth continuing resolution through April 30, in order to provide more time for resolution of the national security supplemental/border issues. Congress had to decide by this past weekend if they wanted to move forward with: a five-bill minibus plus a full-year CR for DHS; a five bill minibus with a CR for DHS that runs only through April 30 (or less); or regular FY24 full-year funding for all six remaining bills. Sunday evening, negotiations got back on track, though not before more drama when Republicans turned down an intervention from the White House seeking $1.56 billion in border-related funding, arguing that a CR freezing funding at last year’s level wouldn’t meet current requirements. We still don’t have a bill to review but as of the morning of March 18, the plan is to move ahead with a six-bill regular FY24 package that includes DHS to be released later on the 18th or perhaps the 19th. That will squeeze the House timeline where rules require 72 hours to allow members to read a bill before requiring a vote.