Democrats and Republicans Battle to Reauthorize Appropriations Bills: Kiplinger Economic Forecasts

The U.S. Congress faces multiple spending battles leading up to the fall. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...

Congress must pass all 12 annual appropriations bills, which lawmakers have not done since the 1990s, to avoid an automatic 1% cut to discretionary spending. Should this happen, how the cuts are implemented will be up to House and Senate appropriators, who will then need to compete for a smaller pool of money. Figure on especially intense fights over funding for the Department of Justice, the FBI, the IRS, and Customs and Border Protection. 

Don’t be surprised if lawmakers resort to emergency spending packages for things like natural disaster relief and defense funding, especially military aid for Ukraine. The additional money would not count against the spending caps, so long as it’s reserved for “emergency” purposes. While Democrats are united in support of this strategy, Republicans are divided on circumventing the caps. 

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Meanwhile, lawmakers face several other looming legislative deadlines:

• The monster five-year farm bill, which covers everything from crop subsidies and insurance to agricultural research and the food stamp program. Historically, the farm bill has been a bipartisan affair, but fights over work requirements for food stamp recipients and other factors have made passage this year more difficult. 
• Federal Aviation Administration reauthorization, also a five-year bill. Democrats are pushing to eliminate airline “junk fees,” such as baggage fees and extra charges for changing and canceling flights. They are also advocating for a bill of rights for passengers that would provide better compensation for delays and cancellations. But it’s unclear whether they can get enough Republicans on board with these ideas. 
• The Pandemic and All-Hazards Preparedness and Advancing Innovation Act, first passed in 2019 and now up for renewal. Intended to promote medical emergency and response capabilities, the measure will be subject to increased scrutiny by Republicans, who want to limit some activities of federal health agencies. 
• The Coast Guard Authorization Act, which authorizes funding and policy for the Coast Guard, one of the nation’s six armed forces. This one is expected to be a fairly easy lift for lawmakers, but unforeseen issues could still crop up.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.