# Congress Returns from August Break Facing FY25 Deadline September 03, 2024 When Congress returns next week from its August recess, three weeks will remain until current government funding expires at the start of the new fiscal year and until Congress’ scheduled adjournment for fall campaigning ahead of November’s consequential general election. With this brief window, and with leadership and most members motivated to avoid a shutdown right before the election, Congress is expected to focus its September session on negotiating an extension of current funding – a continuing resolution (CR) – to run into the post-election lame duck or potentially into 2025 and the new Congress. This will delay final funding decisions into a new fiscal year and a reshaped political environment. These looming fiscal deadlines have also forestalled action on most other measures, although some, like the annual National Defense Authorization Act, seem queued up for final action during the lame duck session. Members continue to lay markers on their priorities for the must-do funding and defense bills as well as for legislation on the docket for the next Congress. Following is an update on the FY25 appropriations process, the differing approaches in the House and Senate, and an overview of other top issues on the Congressional agenda. **Fiscal Year 2025 Appropriations** The bipartisan 2023 budget deal, the [Fiscal Responsibility Act](https://ofr.harvard.edu/news/congress-makes-progress-appropriations-ndaa), set overall spending levels for defense and non-defense accounts for FY24 and FY25 and provided a modest one-percent increase for FY25. Despite this head start on the core issue of topline funding and some progress in each chamber on developing bills, final agreement among the House, Senate, and Administration seems distant as the process has become mired in divisive political issues and sustained pressure to cut funding significantly, particularly from House conservatives. Given this dynamic, leadership will be focused in September on negotiating the terms of the CR. While some members have pushed for inclusion of policy riders on a CR, like a proof of citizenship requirement for voting, it is expected that these issues will be set aside, and the main question will be the length of the CR. Some are pushing for the CR to extend into 2025 in the hopes that the election will strengthen their negotiating position. That said, most members believe funding issues need to be resolved this year to provide certainty for critical federal accounts, as well as to clear the deck for the new Congress and a new Administration. In the midst of this uncertainty, House and Senate Appropriations Committees have made significant progress on the twelve FY25 appropriations bills. To date, they have collectively wrapped up committee work on all but one of their respective drafts. Similar to previous years, Senate appropriators adopted a more bipartisan approach to drafting their bills. House Republican appropriators pursued a path with low funding levels and inclusion of controversial policy riders. The House bills include cuts below the budget caps with an overall six percent reduction in non-defense spending, with the bulk of those reductions in the Labor-Health and Human Services-Education spending bill with an 11 percent cut. Nearly every House bill also includes partisan policy riders focused on DEI, reproductive health, LGBTQ rights, climate and environmental issues, and other culture-war topics. The House passed five of its bills on the floor but failed to pass several others amid unified Democratic opposition and deteriorating Republican support from moderates concerned the bills went too far and from more conservative factions who believe the bills did not go far enough. In the Senate, appropriators, led by Chair Patty Murray (D-WA) and Vice Chair Susan Collins (R-ME), increased funding above the caps by $34.5 billion in emergency funding and eschewed policy riders to maintain bipartisan support for their bills. The additional funding allowed Senate appropriators to propose modest increases in most accounts, including a $2 billion proposed increase for NIH. The major differences between the House and Senate’s FY25 bills present a similar dynamic to past years. Congressional and Administration leaders will need to engage post-election and agree on a topline spending level and will likely leave the details of program-level funding to appropriators. In the past, this has resulted in flat or modest increases in most accounts and the elimination of most (or all) of the controversial policy riders. However, there is little that goes as predicted in Congress, and a long CR into next year or the new political landscape when the Congress reconvenes in November could change the dynamics significantly. Below is a chart of the House and Senate bills’ proposed funding for key university priorities. ![FY25 Appropriations](/sites/g/files/omnuum12061/files/2024-09/FY25%20Chart.png) **Remaining Agenda** Although the focus for September will be on the CR, committees and members will be continuing to work to tee up action on legislation in the lame duck session and in the new Congress that convenes January 3. *National Defense Authorization Act (NDAA)* The annual NDAA sets policy for the Department of Defense and recommends funding levels for programs across the Pentagon and branches of the military, including defense science and technology. As one of the few bills that routinely passes Congress each year, NDAA is both a major vehicle for policy in national security and international affairs and a magnet for other, unrelated provisions and amendments. The House completed action on its NDAA earlier this year, and the Senate bill has been approved by the committee and is awaiting floor action. It is unclear if the Senate leadership will be able and willing to prioritize the floor time necessary for consideration and passage of the Senate committee version of the NDAA, or if they will press to go directly to informal negotiations with the House on a final measure. Among other areas, key issues for higher education include proposed cuts to defense research accounts as well as research security proposals to further regulate certain collaborations and engagements. In addition, there are underdeveloped proposals to link defense research to compliance with Title VI civil rights protections. *Budget and Tax Legislation* As Congress works to close out FY25, next year is likely to be dominated by a slew of fiscal challenges beyond those we see negotiated in each year’s funding bills. Early next year, the current suspension of the federal debt limit enacted as a part of the FRA in 2023 will expire, necessitating action by Congress likely in the first half of the year. In addition, key portions of the 2017 Tax Cuts and Jobs Act, including the cuts for individuals and families, will expire at the end of 2025. Given these two challenges, the Congress will likely pursue a comprehensive budget resolution to establish revenue and spending targets and that would spin off a reconciliation bill allowing for expedited consideration of a tax bill. Although the debate will revolve around macro-budget policies, the decisions made are consequential for the University. In the past, these bills have set tight and even decreasing discretionary funding caps spanning across a decade as well as downward adjustments in Medicare and Medicaid that have affected medical education. A tax bill also poses risks. Already members have indicated that next year’s tax bill will be an opportunity to consider changes to the current endowment tax affecting certain private colleges and universities, including Harvard, which was enacted in the TCJA. In recent months, individual members have been laying markers for this debate and have introduced legislation to expand the tax to increase its toll in addition to its reach, as well as proposals to attach other policies and prohibitions to schools affected by the endowment tax, (such as limitations on participation in federal student aid and reduced facilities and administrative reimbursements.) **Next Steps** In all these areas – federal funding, research policy, budget and tax – the University is broadly engaged, working directly with allies and supporters on Capitol Hill, engaging across the range of viewpoints, and coordinating with our peers, broader institutions, higher education associations, and others to advance stronger policies. Harvard’s DC-based federal relations office will stay in touch with developments, including a full breakdown of the election results in November. If you have any questions in the meantime, please feel free to reach out to Suzanne Day ([suzanne\_day@harvard.edu](mailto:suzanne_day@harvard.edu)), Kara Haas ([kara\_haas@harvard.edu](mailto:kara_haas@harvard.edu)), or Peter DeYoe ([peter\_deyoe@harvard.edu](mailto:peter_deyoe@harvard.edu)). See also:- [ Budget and Appropriations ](/issues/budget-appropriations) - [ Washington Updates ](/news-source/washington-update) Share on:- [ Facebook ](#) - [ Twitter ](#) - [ Linkedin ](#)