Budget Talks at Impasse as Lawmakers Depart for Holiday Break

The stopgap measure funding the federal government is set to expire early next year, yet congressional leaders still have not reached agreement on topline spending limits for fiscal year 2024, a key prerequisite to finalizing agency-level budget allocations.

House Republicans are pushing to revise the budget agreement that former House Speaker Kevin McCarthy (R-CA) negotiated with the White House in the spring. Although that agreement resulted in Congress enacting a budget cap for non-defense spending that is below the current level, a verbal “side deal” not included in the legislative text permits tens of billions of dollars in additional spending on non-defense programs, effectively negating the cut.

New House Speaker Mike Johnson (R-LA) is arguing that Congress should adhere to the cap set in the legislation. By contrast, the Senate’s spending proposals exceed both the cap and the side deal by billions of dollars by designating the extra money as an emergency measure not subject to the cap.

The current impasse has raised fears that Congress will trigger a government shutdown or resort to holding agencies at their current funding levels for the remainder of the fiscal year.

Meanwhile, congressional leaders are also struggling to negotiate a supplemental spending package focused on national security priorities, mainly related to the Ukraine-Russia and Israel-Hamas wars. Senate Democrats have advanced a supplemental package totaling around $110 billion while Republicans are insisting that support for Ukraine be tied to changes to U.S. border security policy.

Although the package is mostly focused on expanding weapons procurement and humanitarian assistance, a portion addresses other goals such as shoring up supplies of radioisotopes that previously were acquired from Russia. The Democrats’ proposal includes $98 million for the Department of Energy to acquire equipment for producing isotopes, short of the $278 million requested for that purpose by the Biden administration as part of a separate proposal for a supplemental spending package focused on domestic priorities.

As lawmakers weigh potential supplemental spending packages, a set of science advocacy groups is proposing that Congress include $13 billion for R&D-focused activities.

The National Science Foundation would receive $5 billion of the total to support efforts such as its nascent Regional Innovation Engines, the prospective National AI Research Resource, and core research and infrastructure. The Department of Energy Office of Science would receive $2 billion in part to launch a major artificial intelligence R&D initiative, microelectronics research centers, additional Energy Earthshot Research Centers, and accelerated facility upgrades. Of the remaining funds, $2.5 billion would go to the Commerce Department’s Regional Technology and Innovation Hubs, $2.5 billion would go to NASA, and $1.6 billion would go to the National Institute of Standards and Technology.

The appetite in Congress for such spending is unclear, though Senate Majority Leader Chuck Schumer (D-NY) has expressed interest in advancing a bipartisan follow-on to the CHIPS and Science Act that would include funding for strategic technology areas beyond semiconductors.