CONGRESS PASSES FIRST APPROPRIATIONS MEASURES, MAKING GOOD PROGRESS ON OTHERS

Congress passed the first six FY’24 appropriations bills late last week after intensive work to finalize all spending details.  Funding for the Departments of Veteran Affairs, Transportation, Energy, Agriculture, and HUD is now in place. This first “minibus” measure also includes funding for military construction and water projects.  In the meantime, progress continues to be made on the second six bills that comprise 80% of all federal discretionary spending.  Appropriators believe that they are very close to an agreement on defense spending, with the Labor appropriations bill close behind.  The Labor-HHS-Education funding measures, the largest for civilian agencies, does, however, face a potential problem.  House Republicans banned earmarks from the bill this year, but senators did not.  That difference will have to be worked out.  In fact, contractors may want to review each spending measure as earmarks providing funding for very specific projects are back in force.  DHS appropriations negotiations are also proving to be difficult.  The second six measures will also likely be considered in one, consolidated, package, which poses a problem for the House Freedom Caucus.  The passage deadline for these measures is midnight March 22nd a date that is actually very important as Congress is scheduled for a two-week Easter recess starting March 23rd.  Provided that the above issues can be addressed, there appears to be enough votes in each chamber for passage.  Absent any last-minute delays, this means that all individual federal offices could have their spending numbers by late April or early May.  That is in no way ideal, but it does provide contractors and their government customers with a timeline they can use to be prepared.  We are not at the goal line yet but are definitely in the red zone.