Perhaps the most important and most predictable feature of congressional policy making over the decades—the appropriations process—has been profoundly disrupted in recent decades. The frequent breakdown of the process was generated by partisan differences over federal spending, often accompanied by divided party control of the House, Senate, and presidency. The breakdown has further centralized key decisions in the hands of party leaders and, at the same time, reduced congressional control over spending.
Some Background
The Constitution provides that “no Money shall be drawn from the Treasury, but in consequence of appropriations made by law” (Art. I, Sec. 9)—that is, Congress must approve federal spending. Congress approves federal spending in three general ways.
1. Mandatory Spending. Congress gives long-term authorization to spend money to some programs. The funding comes from government accounts generated by special taxes or fees or is provided annually by Congress to meet expected costs, which are based on formulas or entitlements written into law. This kind of spending is usually labeled mandatory. It accounts for about two-thirds of federal spending. It includes Social Security, Medicare, and other large entitlement programs. A little mandatory spending is covered by appropriations bills, but most mandatory spending is subject to permanent appropriations that remain in place until altered by Congress.
2. Discretionary Spending. Congress provides annual authorization to many departments and agencies through “appropriations” bills. Congress has more flexibility here and so the category is called discretionary spending. Most federal programs—defense, education, environmental, scientific, and so on—are in the category, but they add up to just a third of the budget. These are the primary subjects of the annual appropriations bills.
3. Interest on the Debt. Another category—interest on the federal debt—must be paid under an authorization from Congress, which has set a total debt limit that must be adjusted from time to time. Most of the spending in this category involves paying interest on U.S. Treasury bonds and securities that institutions and individuals buy. Paying interest on the national debt it is often considered mandatory.
Figure 7-1 shows the levels of spending in these categories. Since the 1980s, increases in entitlement spending has outpaced increases in discretionary spending. Major efforts to address entitlement spending, particularly for Social Security and Medicare, have broken down in partisan stalemate. The leap upward in mandatory spending in 2020 and 2021 is largely a temporary increase in unemployment benefits and a few other programs during the COVID-19 pandemic; mandatory spending fell back close to the long-term trend in 2022. Over recent decades, the most active battles have occurred over discretionary spending and measures to increase the debt limit, which usually involve Republican refusal to raise the limit necessary to allow the federal government to continue to borrow money without deep cuts in spending. For now, I’m interested in the discretionary category.
Congress divides discretionary spending into 12 categories, each of which is the subject of one appropriations bill. Each house of Congress has an appropriations committee with 12 parallel subcommittees with responsibility for drafting the 12 appropriations bills each year (House appropriations subcommittees; Senate appropriations subcommittees). Under current rules, these bills must be passed by October 1, the first day of the federal fiscal year. If all goes well, the 12 appropriations bills are enacted on time and Congress restarts the process in January for the next fiscal year.
The appropriations process requires the approval of all 12 bills by the House, Senate, and president (in the absence of a veto override). Failure to pass one or more of these bills can produce a shutdown of the affected agencies. Congress can pass temporary spending bills, called continuing resolutions (CRs), to extend spending authority for a specified period (long or short) while Congress attempts to act on one or more of the regular appropriations bills. Typically, continuing resolutions extend funding at a level identical to the past fiscal year. Even that process has failed several times since 1995, sometimes resulting shutdowns or year-long continuing resolutions. In some cases, Congress eventually passes an omnibus appropriations bill that groups some or all of the 12 measures into one large bill that represents a negotiated outcome.
Breakdown
The number of appropriations measures of each type that have been enacted since 1960 is shown in Figure 7-2. In most years, there are between 10 and 13 regular appropriations bills expected, along with supplemental appropriations to add funding for unexpected needs. Thus, in a “normal” two-year Congress, we should see 20-26 regular appropriations bills (12 per year, or 24 total, in recent Congresses). Before 2000, with only a few exceptions, the regular bills were passed (black bars). Since then, at least some and recently all regular bills failed to be enacted and were replaced by CRs or omnibus bills (red bars).
Actually, Figure 7-2 gives only a hint of the disruption caused by partisan battles in the last two decades. In some Congresses, the Senate appropriations committee has not bothered to send any bills to the floor. In most recent Congresses, everyone realized very early that little matters until late in a session when top leaders and the White House take control over getting CRs and omnibus bills enacted in some form.
Stalemate in the appropriations process has been reached numerous times in recent decades. In the 1980s, agencies were forced to furlough employees for a day or less on four occasions. Since then, the breakdowns have become more consequential. In 1995-1996, many agencies, including non-essential employees of the Department of Defense and Department of Health and Human Resources, were shutdown for an extended period—some a total of 26 days—in a standoff between a Republican-controlled Congress and Democratic President Bill Clinton. All agencies were affected by a 16-day shutdown in 2013 over congressional Republicans’ insistence on spending cuts that Democrats and President Barak Obama would not accept. And most domestic programs were affected by 35-day furloughs in 2018-2019 in a stalemate between House Democrats and Republican President Donald Trump, primarily over the issue of funding for a wall on the Mexican border. These long government shutdowns affected a wide range of government services and millions of Americans.
The Distribution of Power
At some point, even when the process is stalled for weeks or months, a CR or omnibus package is passed. Often multiple CRs are required until an omnibus measure is successfully negotiated and passed. In the case of omnibus appropriations bills, the appropriations subcommittees, and perhaps even the full committee, have determined most of the details of the bills that are then packaged into a larger bill. Even on omnibus measures, of course, the issues that made action of the regular bills impossible must be addressed and that is usually bumped “up” to central party leaders who negotiate with factions, the other party’s leaders, and the administration. The easy issues may be successfully address by committee members; the difficult issues usually involve serious partisan differences and require the involvement of party leaders.
What does the breakdown on the traditional appropriations process mean for policy making in Congress?
Most of the CRs and omnibus bills are considered under emergency circumstances and final details are left to a few party leaders and top appropriations committee leaders.
It reduces the incentive for appropriations committee members to scrutinize the details of the bills, particularly in the Senate. CRs usually lack detail and merely continue past levels of spending. Even for omnibus bills, larger partisan interests, rather than the nitty-gritty of agency performance, become the focus when the traditional committee processes are set aside.
It reduces the voice of legislators who do not hold seats on the appropriations committees on spending policy. In the House, floor amendments to CRs and omnibus measures often are not allowed and debate is limited. Their influence must be registered in party meetings or privately with appropriators and leaders.
Where Are We Headed?
In 2022, in line with what had become a pattern, Senate Republicans made clear that they would not support passing any regular appropriations bills before the November elections. They appeared to be hoping that their party would win House or Senate majorities later that year, which would influence their strategies about delaying spending decisions until the new Congress convened in January 2023. That’s not quite how it worked out. Republicans won a House majority, but Democrats retained a Senate majority, and Republicans chose to allow all 12 appropriations to be consolidated into one measure that was enacted in late December before the new Congress took office.
In 2023, the new House Republican majority began with the intention of returning to “regular order”—passing all 12 spending bills in the House well before the October 1 start of the fiscal year. A deal over suspending the debt limit included caps on discretionary spending that, at first, led legislators to be optimistic about passing the regular appropriations bills. However, while Senate appropriators of the two parties began to write bills at the levels of the caps, House Republican promised lower spending levels. At the time of this update (July 2023), House appropriators had approved six bills, with the future of the bills on the floor being uncertain because of disagreements among Republicans about whether deeper cuts were desirable. Senate appropriators of the two parties agreed on spending targets for their 12 bills and approved two of them, but the strategies Republicans will use when any of the appropriation bills are considered on the floor remain unknown. Most observers expect that Congress, with split-party control of the House and Senate, would not pass all 12 bills in a timely way because of deep partisan differences over the mix of domestic and defense spending and numerous more specific issues. The possibility of government shutdowns was again being threatened by the most conservative Republicans who advocated deep domestic spending cuts.
The tug-of-war over spending bills is not surprising, of course. Appropriations involve the most basic priorities of government and are central to the differences between the two parties. Divided party control over the House, Senate, and presidency overlaid upon deep partisan divide is a recipe for gridlock.
Reform?
Reform proposals have been offered for decades to address the brinksmanship, gridlock, and shutdowns, but little has been done since 1974, when the start of the fiscal year was pushed back from July 1 to October 1 to give Congress more time to enact fiscal measures each year. Here are just a few of the most common proposals.
Two-year budget cycle. This proposal is advocated by those who want to give federal agencies greater certainty about their funding and to reduce the number of times Congress can get bogged down by making the required fiscal measures.
Permanent appropriations. This proposal is usually applied to some but not all federal programs. It would give more programs—say, defense or medical research programs—the authority to spend funds at a specified level, perhaps with built-in increases, until Congress changed the law. This would reduce the number of programs requiring new appropriations each year and narrow the effects of partisan stalemate.
Simple majority cloture in the Senate. Because the Senate is often the place where some or all of the 12 regular appropriations bills are stalled, some reformers advocate that the Senate bar minority filibusters by reducing the cloture threshold to a simple majority, as it has for confirmation of presidential nominees to executive and judicial posts.
Automatic CRs. A more modest proposal is for the House and Senate to adopt rules that create automatic continuing resolutions to allow for some level of spending in programs affected by failure to pass regular or omnibus appropriations bills.
Congressional pay. A recurring proposal is to deny member of Congress their salaries during periods when spending authority is not in place.
Entitlement reform. As the major entitlement programs continue to grow, many reformers, particularly conservatives, advocate long-term changes in the eligibility and benefits of these programs. The largest of these programs (Medicare, Medicaid, Social Security) are not subject to annual appropriations bills, although some proposals would require periodic congressional approval. Other entitlement programs are subject to appropriations decisions so reformers advocate setting long-term caps on spending for them.
Enhancing the president’s power. Under current law, the president may propose rescissions of previously enacted appropriations, but Congress may simply not act on the president’s proposals. Some reformers would like Congress to adopt rules that require each house to vote on the president’s rescission requests.
Abolish, or make automatic, increases in the debt limit. While not directly connected to appropriations bills, the occasional need to increase the debt limit has been used as leverage to gain concessions on appropriations, thereby threatening a default on debt payments. Some reformers advocate eliminating the debt limit or making the statutory debt limit automatic or easy to increase without congressional action.
All of these proposals, if adopted, would alter the distribution of power over spending policy or shift tactical advantages among the partisans in conflicts over spending. In the Senate, a disadvantaged minority can prevent reforms from being adopted as a part of Senate rules. Budget-related reforms could be made in reconciliation bills, which cannot be filibustered, but even that path has not yielded enough agreement within and across the two houses to generate significant reforms of the appropriations process in recent decades.