The House and Senate reconvened last month for the second session of the 118th Congress. The House and Senate 2024 calendars illustrate that, as in most election years, lawmakers will have limited time to move legislation forward.

Legislation of interest to local governments on the congressional to do list includes:

• FAA Reauthorization: Like surface transportation programs that rely on an authorized Highway Trust fund to keep programs operating, the FAA needs Congress to authorize the aviation trust fund and the taxes that fund it. The House approved its version of the bill (HR 3995) last year, but Senate Commerce Committee disagreements over pilot training policies are holding up a final version of this measure. The short-term extension Congress enacted last year expires on March 8.
• Farm Bill: A one-year extension of rural development programs, subsidies for agricultural production, and nutrition programs expires on September 30, and House Republican efforts to pare back spending on programs such as the Supplemental Nutrition Assistance Program (formerly known as Food Stamps) will make this difficult to reconcile.
• WRDA: The biannual Water Resources Development Act is slated for an update in 2024. This measure with jurisdiction over water resources policies at the Army Corps of Engineers often finds a bipartisan path to enactment, most recently in 2022. WRDA also authorizes funding for specific flood control, navigation, and other water resources projects, but those projects must seek funding from the corps each year after the annual appropriations process.
• Job Training: The Workforce Investment and Opportunity Act (WOIA) is up for reauthorization next year. The House Education and the Workforce Committee approved a bipartisan reauthorization bill (HR 6655) last year. The House bill tweaks federal job training programs, including requiring states and local workforce investment boards to conduct a collaborative, three-year review of geographic boundaries of local workforce development areas (a process that could pose a threat to local control of job training programs).
• FY 2025 Appropriations

FY 2024 Budget

However, before Congress can fully focus on the FY 2025 appropriations process, they must still finalize FY 2024 appropriations bills. Indeed, the House and Senate returned to Washington, DC, this week after a one-month holiday break to immediately face the now all-too-familiar threat of a government shutdown.

The year started on a positive note with an early January announcement by Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Mike Johnson (R-LA) that they had agreed on a “top-line” spending limit for FY 2024 of $1.659 trillion, which is the amount agreed upon in the bipartisan debt limit deal enacted last spring. (That top line amount would allocate $886.3 billion to Defense spending, a 3% increase from FY 2023, and $772.7 billion to non-Defense spending, a 0.2% increase from FY 2023.)

However, as January wore on, members of the conservative House Freedom Caucus expressed anger both publicly and privately with the speaker’s decision. That group has been advocating for deep non-Defense spending cuts in the FY 2024 budget as well as wholesale changes to immigration policy outlined in an immigration bill (HR 2) approved by the House last year. That plan does not have the support of the majority of the Senate or the President. However, changes to immigration policy remain part of the discussions, but the stalemate on that issue poses perhaps the biggest obstacle to finalizing the FY 2024 budget. In addition, negotiations on the FY 2024 budget also include emergency aid for Ukraine, Israel, and Taiwan, increased spending on border security, allocating the top line number to specific programs, and resolution of disagreements over policy riders to the appropriations bills.

Even if House-Senate-White House negotiators can reach an agreement on all the issues wrapped into finalizing the FY 2024 budget, it would take staff weeks to write before a final budget could be crafted by House and Senate negotiators.

To that end, in late January House and Senate leaders muscled through yet another short-term Continuing Resolution (CR) that extends funding for federal agencies and programs through early March. The CR (HR  2872) is another “clean” one—meaning it does not include any major policy riders or cuts to federal agencies—and continues the “laddered” approach to addressing the budget that is favored by House Speaker Mike Johnson (R-LA). The new deadlines will come fast: March 1 for the Departments of Agriculture, Energy, Transportation, Housing and Urban Development, Veterans’ Administration, Army Corps of Engineers, and Bureau of Reclamation and March 8 for the rest of the federal government (at which point we will be five months into the fiscal year).

The Senate approved the CR (77-18) and the House quickly followed, overwhelmingly approving  it (314-108). However, the House vote also revealed some potential problems for Speaker Johnson. A majority of House Republicans voted for the CR, but just barely, 107-106, and the conservative wing of the House GOP Conference continues to seek deep budget cuts and major immigration policy changes before agreeing to just about anything that comes to the House floor at this point. 

Bringing legislation to the floor that has more Democratic support than Republican support is what cost former House Speaker Kevin McCarthy his job last fall. This is Johnson’s second clean CR since he took the top job in the House and while no member has filed a “motion to vacate” the Chair of the House, it only takes one and there are certainly more than one House Republican who objects to the current FY 2024 budget negotiations. 

It is important to remember that if Congress cannot enact all 12 annual appropriations bills by April 1, last spring’s budget agreement includes a mechanism that would automatically enact a year-long CR with a 1% across-the-board cut to all programs, including Defense, the idea being that such an outcome would be so unpalatable it will force an agreement. In addition, a year-long CR would also likely mean the demise of all of the Community Project Funding projects (earmarks) included in the FY 2024 appropriations bills pending in the House and Senate.

Tax Relief for American Families and Workers Act of 2024

Meanwhile, the respective chairs of the congressional tax writing committees announced a deal on a tax proposal (HR 7024) that addresses a major Republican priority (extension of the Research and Development tax credit) and a major Democratic priority (expansion of the Child Tax Credit). Tax bills are notoriously difficult to move through Congress, so the plan is not a done deal, but its bipartisan nature may yield results. The House Ways and Means Committee approved the bill by a vote of 40-3 and the full House and Senate Finance Committee may take up the bill soon. 

Administration

In addition to action on Capitol Hill, key issues for local governments in 2024 will include ongoing implementation of the Infrastructure Investment and Jobs Act/Bipartisan Infrastructure Law and of the Inflation Reduction Act.

On the latter, a key development for local governments is ongoing Treasury Department and Department of Energy guidance, regulations, and forms for the law’s Elective Pay/Direct Pay provision, which allow entities without tax liability, including local governments, to claim some of the law’s clean energy tax credits.

The IRS and White House Elective Pay websites have detailed information:

In addition, local governments will continue to track the Administration’s regulatory agenda, including new drinking water and clean air standards.