Congress Reaches Funding Deal for Remainder of FY22

In the early morning hours of March 9, congressional budget leaders released the legislative text of the funding deal party negotiators have been haggling over the past few weeks. With limited time to spare, lawmakers will likely avoid a shutdown provided the Senate takes the necessary steps before 11:59 p.m. on March 11. The $1.5 trillion package included a few surprises and faced some potentially stiff headwinds before a controversial provision was removed at the last minute.  From a topline perspective, the bill provides a boost for both defense ($782 billion) and domestic spending ($730 billion). Additionally, earmarks will be included for the first time in over a decade – although there is a set limit on how much can be used for that purpose. The bill would also reauthorize protections in the Violence Against Women Act that lapsed nearly three years ago. Finally, the bill provides emergency funding for aid to Ukraine.

The potential headwinds came up as details of the package emerged. The primary sticking point was the proposed inclusion of additional funding for pandemic measures. Several Senators opposed including any additional coronavirus aid which caused the White House to lower the funding request to roughly $15 billion. Further complicating the plans to include the language was where negotiators landed on how to pay for the spending boost – in part, rescinding some of the funding that Treasury had yet to disburse from the American Rescue Plan’s Coronavirus State and Local Recovery Funds Program. Ultimately, the provision was removed as the House approached the vote on the bill. Coincidentally, the White House this week is celebrating the one-year anniversary of the law’s enactment by highlighting success stories such as how states and local governments are using funds.

Late Wednesday evening, the House passed the spending package along with a four-day short-term funding extension. The funding patch is needed because the Senate does not have enough time procedurally to pass the larger package before the Friday 11:59 p.m. deadline. The chamber is expected to move quickly on that bill and potentially pass the broader spending package as early as this weekend.