PROGRESS ON FY’24 APPROPRIATIONS INCHES FORWARD

Each of the separate 12 Congressional FY’24 appropriations bills now has a top-line spending number, enabling subcommittees to allocate resources for specific programs.  This move was necessary for final work to be done on setting FY’24 appropriations levels and is good news for those hoping that Congress will meet, or at least come close, to its early March deadline for passing all spending measures.  First up are those agencies that need bills passed by March 1st.  Of those, Commerce, State, and Justice are expected to see spending cuts from FY’23 levels, while Military Construction and Energy and Water appropriators have said that they can “live with” their allocations.  Other civilian agencies, such as Labor, HHS, and Education will also see reductions.   This is consistent with earlier information suggesting that civilian agencies will generally see a reduction in overall spending, while DOD will see an increase.  No new numbers have been released for the DOD spending bill, but it will be no less than the original House level of $826.45 billion and will likely be somewhat higher.  There may also be an additional “supplemental appropriations” measure providing additional funds for both DOD and DHS.  Specifics on that, however, have not been determined.  The timeline to pass each measure remains tight as the House and Senate will take some significant time off for the mid-month President’s Day weekend. In addition, while House Speaker Mike Johnson (R-LA) has been able to keep his chamber from erupting into disarray, the factionalized nature of the chamber may make that difficult to continue.  Still, there is a new reason for optimism for contractors and their federal customers.  House and Senate appropriators appear to be working in a bi-partisan manner and significant pressure is being placed on Congress generally to address appropriations and other critical international issues, such as aid to Ukraine.  Contractors should continue to watch this space, but cautious optimism seems to be this week’s message from the Hill.