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November 13, 2023

What to expect in Washington (November 13)

House Speaker Mike Johnson (R-LA) over the weekend unveiled a two-step continuing resolution (CR) to extend government funding beyond November 17, by which Military Construction-VA, Agriculture, Transportation-HUD, and Energy & Water appropriations bills would be extended through January 19 and the remainder of appropriations through February 2. The fate of the measure, which could get a House vote as soon as Tuesday, is uncertain as House conservatives criticize the lack of spending cuts, Democrats are reluctant to lend their support, and some GOP senators have questioned the bifurcated process. The Wall Street Journal said, "The measure wouldn't impose spending cuts, and it also wouldn't implement tougher anti-immigration rules at the U.S.-Mexico border, which some Republicans had said was critical to get their support." Rep. Chip Roy (R-TX), a Freedom Caucus member, said, "It's a 100% clean. And I 100% oppose."

The Journal story said "The two-step plan was also structured to put the defense-spending components of the federal budget, which account for more than half of discretionary spending, into the tranche that would expire in early February. That means that the part of the budget traditionally most popular among Republicans — military spending — would be put on a slower track, easing worries among Democrats that the GOP would try to enact spending that they favor without tackling spending favored by Democrats. 'It's a good thing the speaker didn't include unnecessary cuts and kept defense funding with the second group of programs,' a Senate Democratic leadership aide said."

Politico reported, "Privately, Democrats said Saturday that they still don't favor Johnson's two-date approach — in part because it may not avoid a one percent cut that could kick in early next year under the terms of a debt deal reached over the summer … Johnson told the House GOP that if this package fails to pass the chamber, he plans to bring a full-year stopgap spending bill to the floor. That package would include blanket cuts to non-defense spending, he said." A Politico reporter said Speaker Johnson has acknowledged some Democratic support would be necessary given expected Republican defections.

Under the Fiscal Responsibility Act (FRA), there will be temporary caps at 99% of current funding levels (FY2023) if all 12 appropriations bills are not passed by January 1 of either 2024 or 2025, respectively (with the technical sequester enforcement mechanism related to the funding reduction taking effect on April 30). As described by the Congressional Research Service: "The FRA includes a provision that has been described as incentivizing Congress to enact regular full-year appropriations legislation instead of relying on [CRs]. This provision requires that in the event a CR is in effect on January 1 of 2024 or 2025 for any budget account, the discretionary spending limits for that fiscal year would be automatically revised."

The New York Times reported, "Setting two different end dates in what Mr. Johnson is calling a 'two-step continuing resolution' was an effort to allay the concerns of hard-right lawmakers who have long railed against the now-routine practice of funding the entire government through one mammoth bill. Some members of the ultraconservative House Freedom Caucus have endorsed the two-step idea in recent days. 'The bill will stop the absurd holiday-season omnibus tradition of massive, loaded-up spending bills introduced right before the Christmas recess,' Mr. Johnson wrote on social media … "

Below is a table on the status of the appropriations bills.




Two-step CR end date

Agriculture, Rural Development, FDA

Week of November 13

Passed November 1

January 19

Military Construction, Veterans Affairs

Passed July 27

Transportation, HUD

Week of November 13

Energy and Water Development

Passed October 26


Commerce, Justice, Science

Week of November 13

February 2


Passed September 28

Financial Services & General Government

Stalled week of November 6

Homeland Security

Passed September 28

Interior, Environment

Passed November 3

Labor, HHS, Education

Week of November 13

Legislative branch

Passed November 1

State, Foreign Operations

Passed September 28

Senate — The House CR would exclude Israel and Ukraine aid, which may be addressed separately. In a November 12 post, Speaker Johnson referred to not only preventing a holiday omnibus, but delivering "the debate the American people deserve on supplemental spending." Senate Republican leaders have mostly reserved their comments for the separate national security supplemental funding bill, which the House has passed as an Israel-only measure with $14.5 billion in aid and an equal amount in IRS funding rescissions. Senators from both parties support considering Israel aid in conjunction with money for Ukraine, and some Republicans insist on including a border plan that Majority Leader Chuck Schumer (D-NY) called "radical."

Senate Republican leader Mitch McConnell (R-KY) may for now be inclined to remain on the sidelines of the government funding debate. Senate Democrats are largely on the same page regarding funding, with the Appropriations Committee acting in a bipartisan manner to pass FY2024 bills at FY2023 spending levels, rather than the steeper cuts and controversial riders advanced in the House at the insistence of conservatives. It is Appropriations Ranking Member Susan Collins (R-ME) who has been cited most frequently as questioning a two-step approach and the resulting complexity. But some Senators are in favor. Senator Ron Johnson (R-WI) posted, "Speaker Johnson did not create the mess we are in but is acting responsibly to avoid a shutdown and put an end to the finely-honed process that has mortgaged our children's future. I am asking all congressional Republicans to support his decision."

A story in the Sunday Washington Post on Senator McConnell's ability to keep Republican senators aligned said, "up to a dozen or more Senate Republicans publicly second-guess McConnell's decisions, leaving him less able to wheel and deal like he so often did a decade ago during fiscal showdowns. 'He's a master at the process,' said Sen. John Cornyn (R-Tex.), who aspires to succeed McConnell whenever he steps aside. 'But I think there is a little more individuality, shall we say, certainly in the Republican conference.'"

Health — Health care and related provisions in the two-step CR include:

  • Health extenders
    • Extension for Community Health Centers, National Health Service Corps, and Teaching Health Centers that Operate GME programs
    • Extension of Special Diabetes Programs
    • National Health Security Extension
  • Medicaid
    • Delaying Certain Disproportionate Share Payment Cuts
    • Medicaid Improvement Fund Reduction
  • Human Services
    • Extension of Child and Family Services Programs
    • Sexual Risk Avoidance Education Extension
    • Personal Responsibility Education Extension
  • Medicare
    • Extending Floor For Work Geographic Index
    • Revising Phase-In of Medicare Clinical Laboratory Test Payment Changes
    • Medicare Improvement Fund

Congress — The House is expected to consider the CR this week and possibly resume consideration of two regular-order appropriations bills that hit some roadblocks last week. The Transportation-HUD bill was stalled over Amtrak funding. The Financial Services & General Government appropriations bill (which funds the Treasury Department and IRS) was pulled from House consideration over issues related to reproductive rights and funds for a new FBI headquarters, Politico reported.

The Ways & Means Committee has scheduled a hearing, "From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing," for Wednesday, November 15 at 2 p.m.

The Senate returns to session at 3 p.m. today, November 13, with a judicial nomination vote at 5:30 p.m. Following the confirmation vote, the Senate will take a procedural vote related to H.R. 815, the legislative vehicle for a Senate-authored Continuing Resolution, which reportedly will extend government funding into December. The Senate Finance Health Care Subcommittee has scheduled a hearing, "Ensuring Medicare Beneficiary Access: A Path to Telehealth Permanency," for Tuesday, November 14 at 2:30 p.m.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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