EXPERTS NOW EXPECT FY’25 APPROPRIATIONS TO SLIDE INTO NEXT YEAR

Hopes for having FY’25 appropriations measures passed by the end of this calendar year are fading with more budget watchers expecting final action only in the late winter/early spring of 2025, similar to what was seen for this year.  One factor driving at least part of this belief is that any measures passed now would be seen as a “Biden budget”.  As there will be no Biden Administration after January 20th, both presidential candidates and their Congressional supporters may want a chance to craft spending bills that more closely align with their priorities.  Another factor is time.  There are only three weeks remaining to pass even a continuing resolution, let alone make progress on permanent spending measures.  Although subject to change, the House and Senate calendars currently forecast no October session.  This means that the earliest FY’25 appropriations work could take place would be in the lame-duck session in November and December.  While cutting the fiscal year in half is inherently a less efficient way to run the government, political realities may cause it to happen in successive years.  Contractors and their federal customers should prepare for this possibility now.  Lessons learned during the FY’24 appropriations process should be applied to avoid the most damaging outcomes.  Contractors may also want to talk with customers about whether at least some planned projects could technically be started now, allowing work to continue under a CR.  There is currently no indication of a government shutdown this year but keep in mind that delaying the FY’25 appropriations process into next year may bring the debt ceiling issue back to the forefront of discussions just as a new president and new Congress try to get to work.