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FY25 Continuing Resolution: National Defense and Key Issues

ByArmyConnect™ Reading Time: 13 minutes

Here We Go Again, Budgetary Woes Again, National Defense Takes a Back Seat

BLUF

As the House and Senate gear up to negotiate the first continuing resolution (CR) for FY25, the impact on government spending and Army operational readiness is a critical concern. The disagreements over policy language for discretionary expenditures between the two bodies will lead to the need for a CR, affecting various defense and non-defense programs. Let’s delve into the details of this ongoing situation and its implications.

Oh, and we should note that the Department of Defense is headed towards a budgetary critical mass with an increase in recruiting adds to the Army’s force and payroll bill (base pay, BAS, BAH/BAQ, medical, etc.), Ukraine Security Supplemental funding in FY25, continued Israel Defense Aid, Hamas Humanitarian Aid, Indo-Pacific security assistance, and training and modernization; specifically sUAS, artificial intelligence, cybersecurity, and mobile lethality)(U.S. Senate Committee on Armed Services 2024).

Our FY25 budget list is not all-encompassing. There are many factors to to take into account starting with the 2024 election, Congress going to work and doing…stuff, and the temperament of world powers. Does NATO get frisky with Russia? Will the Middle East continue to heat up? What about Taiwan? What About Bob? What about me? It isn’t fair. I’ve hand enough now I want my share. Sorry, small tangent. If you are in the Armed Forces, you need to know a few 80’s pop rock ballads. Also, you need to understand how current events impact your ability to “deploy, fight, and win our Nation’s wars by providing ready, prompt, and sustained land dominance by Army forces across the full spectrum of conflict as part of the Joint Force (Esper and Milley 2021).”

A piggy bank and stacks of coins are placed on wooden blocks that spell "BUDGET. National Defense and continuing resolution.

Introduction

In the labyrinth of fiscal policy and legislative maneuvering, few events capture the essence of political brinkmanship, like negotiating the Federal Budget. As the House and Senate reconvene on September 9, all eyes will be on the intricate dance of compromise and contention that will shape the first CR for FY25. This event isn’t just another budgetary ritual; it’s a high-stakes game with far-reaching implications beyond mere numbers on a spreadsheet. The stakes? National defense, essential non-defense programs, and the very fabric of American governance. Picture this: the House Appropriations Committee has dutifully reported all twelve bills, yet they have only passed five.

Meanwhile, the Senate Appropriations Committee lags slightly behind, having reported eleven bills but holding off on Homeland Security due to unresolved issues. Neither the House nor the Senate adheres to the statutory requirements established in the Fiscal Responsibility Act (FRA) of 2023, which “increases the federal debt limit, establishes new discretionary spending limits, rescinds unobligated funds, expands work requirements for federal programs, and modifies other requirements related to the federal budget process (118th Congress (2023-2024) 2023).” The FRA of 2023 reduces funding limits to 1% below FY2023 levels starting January 1, 2024, or January 1, 2025, if all 12 appropriations bills are not passed by the end of the previous year and a continuing resolution is in effect (118th Congress (2023-2024) 2023).

The discord is palpable: while the House leans heavily towards defense funding, the Senate seeks a more balanced approach, even proposing a noteworthy increase in emergency spending. This divergence highlights the ideological rifts between the two chambers. It sets the stage for a potentially tumultuous negotiation period, where every decision could influence the nation’s priorities, people, and defense.

The Significance of FY25 Continuing Resolution

A continuing resolution (CR) is a temporary funding measure that allows the government to continue operating when Congress fails to pass a regular appropriations bill by the end of the fiscal year (U.S. Government Accountability Office 2022). In the case of FY25, we cannot overstate the significance of a continuing resolution. It serves as a stopgap to keep essential government functions running while lawmakers negotiate and finalize the budget for the upcoming fiscal year. A funding gap would lead to a partial government shutdown without a continuing resolution. Closing parts of the government would have severe consequences for various sectors, including national defense, essential non-defense programs, and even ordinary citizens who rely on government services. The negotiation and passage of a continuing resolution are crucial because they provide stability and certainty in funding for federal agencies and programs. It ensures that critical operations can continue without interruption while Congress works towards reaching an agreement on the full-year appropriations bills.

House vs Senate Approaches to FY25 Budget

The differing approaches between the House and Senate regarding the FY25 budget have contributed to the need for a continuing resolution. The House Appropriations Committee has reported all twelve bills but has only passed five. On the other hand, although the Senate Appropriations Committee has reported eleven bills, none have been taken up by the Senate. One significant point of contention between both chambers is their respective red-lines for discretionary spending in FY25. The House bills fund defense programs at 1% above FY24 levels as established in the Fiscal Responsibility Act (FRA). However, they funded non-defense programs at $54 billion below what was agreed upon by President Biden and then Speaker McCarthy (R-CA).

In contrast, the Senate bills propose increasing emergency spending based on an agreement between Senate Appropriations Chair Murray (D-WA) and Vice Chair Collins (R-ME). This increase amounts to $34.5 billion, with $21 billion allocated for defense programs and $13.5 billion for non-defense programs. As a result, the Senate’s approach increases defense spending by 3% above FY24 levels and non-defense spending by 2% above FY24.

What Is the Current Status of The Appropriations Bills for FY25 In the House and Senate?

The House Appropriations Committee has reported all twelve bills, but the House has only passed five. This incomplete process has triggered negotiations for the CR for FY25. As of now, here’s the current status of the FY25 appropriations bills in the House and Senate:

House of Representatives

  • Progress: The House has made some progress on its appropriations bills, with several bills passed out of committee. However, they have not brought all bills to the floor for a vote.
  • Challenges: There have been internal disagreements and delays, particularly around spending levels and policy riders. These disagreements may slow down the process or require further negotiation to reach a consensus.

Senate

  • Progress: The Senate has also moved forward with its appropriations bills, with several passed through committee. Some bills have been brought to the floor and debated.
  • Challenges: Similar to the House, the Senate faces challenges, including reconciling different priorities and addressing any contentious issues arising during the debate.

Key Points of Concern

  1. Deadlines: Both chambers are working against tight deadlines to finalize appropriations before the end of the fiscal year to avoid a government shutdown.
  2. Reconciliation: Once both chambers pass their versions of the appropriations bills, they will need to reconcile any differences between the two versions, which can be a complex and time-consuming process.
  3. Continuing Resolutions: If the politicians on the Hill do not complete the appropriations process by October, Congress may need to pass continuing resolutions to keep the government funded temporarily.

For the most current and detailed information, it would be best to check the latest updates from the House and Senate appropriations committees or trusted news sources covering legislative activities.

What Are the Differences in the FY25 Discretionary Spending Between the House and Senate?

The House and Senate have significantly different expectations for FY25 discretionary spending, with disagreements over policy language necessitating a CR. The statutory requirements established in the Fiscal Responsibility Act (FRA) are not followed by either body, leading to funding variations.

For the Fiscal Year 2025 (FY25), the critical differences in discretionary spending between the House and Senate are:

Overall Spending Levels:

  • House: The House has proposed a lower overall discretionary spending than the Senate. This difference is often due to different priorities and political considerations.
  • Senate: The Senate typically proposes a higher discretionary spending level, which may include additional funding for various programs and initiatives.

Defense vs. Non-Defense Spending:

  • House: The House often allocates a more significant proportion of discretionary spending towards defense-related programs.
  • Senate: The Senate may allocate more funds towards non-defense discretionary spending, including education, healthcare, and infrastructure.

Specific Program Funding:

  • The House and Senate may differ significantly in funding specific programs and agencies. For example, one chamber might prioritize increased funding for healthcare programs, while the other might focus on infrastructure or environmental initiatives.

Policy Riders and Conditions:

  • The House’s discretionary spending bills might include more policy riders (provisions that direct or restrict how the government uses funds) that align with their legislative priorities.
  • The Senate’s bills might have different or fewer policy riders, focusing instead on broader funding allocations.

Emergency and Supplemental Funding:

  • Differences might exist in how each chamber addresses emergency and supplemental funding needs, such as disaster relief or responses to unforeseen events.

The exact figures and details vary annually based on negotiations, economic conditions, and political dynamics. For precise numbers and program-specific information, it would be best to refer to the official budget documents released by each chamber’s appropriations committee. We recommend copious amounts of caffeine (within recommended limits allowed by the FDA), a 12th grade reading and comprehension level, and the dedicated attention span of a Stephanie Kwolek (inventor of Nomex and Kevlar).

How Do the Funding Levels for Defense and Non-Defense Programs Differ in The House and Senate Bills?

The House bills fund defense programs at the FRA level of $895 billion, while non-defense programs are funded $54 billion below the agreed level. On the other hand, the Senate bills increase defense spending by 3% above FY24 to $916 billion and non-defense spending by 2% above FY24 to $793 billion.

The differences in funding levels for defense and non-defense programs in the House and Senate FY25 appropriations bills reflect their priorities and political considerations. Here’s a snapshot of these differences based on the latest available information:

House Appropriations Bills

Defense Spending:

  • The House typically allocates a significant portion of its discretionary budget to defense. For FY25, the House has proposed higher funding levels for the Department of Defense, focusing on military readiness, modernization, and personnel benefits.
  • Specific areas of increased funding may include new weapon systems, cybersecurity initiatives, and enhanced pay and benefits for military personnel.

Non-Defense Spending:

  • The House has proposed comparatively lower funding levels for non-defense discretionary programs—these reduced allocations for areas such as healthcare, education, and environmental protection.
  • Some social programs and domestic agencies may face tighter budgets or cuts than in previous years.

Senate Appropriations Bills

Defense Spending:

  • While the Senate also prioritizes defense spending, the proposed increases are generally more moderate than the House. The Senate’s defense allocations focus on maintaining military capabilities while addressing emerging threats.
  • There may be an emphasis on research and development, especially in advanced technologies like AI and hypersonics.

Non-Defense Spending:

  • The Senate usually allocates more funds to non-defense discretionary programs than the House. For FY25, the Senate has proposed higher funding for healthcare, education, infrastructure, and climate change initiatives.
  • Key focus areas might include expanding access to healthcare services, increasing funding for public education, and investing in renewable energy projects.

Key Differences

Prioritization:

  • The House prioritizes robust defense spending, often at the expense of non-defense programs.
  • The Senate aims for a more balanced approach, with significant investments in defense and non-defense areas.

Policy Riders:

  • The House bills may include policy riders restricting or directing how funds are used, particularly in non-defense areas.
  • The Senate bills might have fewer or different policy riders, focusing instead on broader funding allocations.

Allocation Strategies:

  • The House might allocate funds to specific defense projects and initiatives that align with their strategic priorities.
  • The Senate could emphasize broad-based investments in public welfare programs and infrastructure improvements.

It’s best to refer to the official appropriations bills and summaries of the House and Senate Appropriations Committees for precise figures and detailed program-specific information.

Ideological Rifts in Defense Funding

The differing approaches to defense funding between the House and Senate highlight ideological rifts within Congress. The House bills fund defense programs at the FRA level of $895 billion, representing a 1% increase above FY24. On the other hand, the Senate proposes an even higher defense funding level with a 3% increase above FY24 levels, amounting to $916 billion. This difference reflects contrasting priorities and perspectives on national security and military readiness.

The Stakes: National Defense and Essential Programs

The stakes are high when negotiating a continuing resolution for FY25. National defense is at the forefront as decisions on defense funding will directly impact military readiness, modernization efforts, troop support systems, and overall national security (Vergun 2024). Equally important are essential non-defense programs that provide critical services to citizens across various sectors, such as healthcare, education, transportation infrastructure, environmental protection, scientific research, social welfare programs, and more. The level of funding allocated to these programs determines their ability to meet public needs effectively.

FY 2025 Defense Funding Levels

FY25 Defense Funding Levels (in billions of dollars)
Department of Defense $ 878.4
Department of Energy $ 33.4
NDAA Topline $ 911.8
Defense-related Activities Outside NDAA Jurisdiction $ 11.5
National Defense Topline $ 923.3

A Continuing Resolution (CR) can significantly impact U.S. National Defense in several ways:

1. Funding Levels

  • Status Quo Funding: Under a CR, defense funding levels are typically maintained at the previous fiscal year’s levels. This can prevent the Department of Defense (DoD) from accessing any planned increases in funding for new programs, initiatives, or cost-of-living adjustments.
  • Delayed Increases: Planned budget increases for new projects or expansions of existing programs are delayed, affecting overall military readiness and modernization efforts.

2. Program Delays and Disruptions

  • New Programs: CRs generally prohibit initiating new programs or projects not previously funded. These interruptions can stall new acquisitions, technology developments, and other critical initiatives.
  • Contracting Issues: The uncertainty caused by CRs can complicate contracting processes. Vendors and contractors may hesitate to enter into new agreements or continue existing ones without assured funding.

3. Operational Readiness

  • Maintenance and Training: Funding constraints can delay maintenance and reduce the availability of equipment and training exercises, impacting overall troop readiness.
  • Logistical Challenges: Supply chain and logistics operations might face interruptions, affecting the timely delivery of essential supplies and equipment.

4. Long-term Planning

  • Strategic Planning: The DoD relies on stable and predictable funding to plan long-term strategies and investments. CRs introduce uncertainty, making it challenging to execute multi-year plans effectively.
  • Budget Management: Managing budgets under a CR can be inefficient, as departments within the DoD may have to repeatedly adjust their plans based on short-term funding extensions.

5. Morale and Retention

  • Personnel Impact: Uncertainty in funding can affect morale among military and civilian employees. Concerns over potential pay delays or cuts to benefits can impact retention and recruitment efforts.
  • Civilian Workforce: Civilian employees may face layoffs or reduced hours, which can disrupt operations and lead to a loss of experienced personnel.

6. Research and Development

  • Innovation Slowdown: Funding restrictions can delay research and development projects critical to maintaining technological superiority. These limitations can impact advancements in cybersecurity, artificial intelligence, and advanced weaponry.

While a Continuing Resolution allows the government to avoid a shutdown by maintaining funding at current levels, it introduces significant challenges for the Department of Defense. The inability to start new programs, delays in funding increases, disruptions to operations, and impacts on morale and long-term planning can collectively hinder the effectiveness and readiness of U.S. National Defense.

Looking at specific reports or statements from the Department of Defense or related oversight committees is helpful for more detailed impacts.

What Is the Timeline for Resolving the Differences in Funding Between the House and Senate?

The $88 billion difference in funding between the House and Senate may not be resolved until mid-December or potentially late March or April of 2025, depending on the outcome of the November elections.

How Likely Is a Government Shutdown on October 1, And What Measures Can They Take to Avoid It?

If you’ve been paying attention the last 2-3 years, a government shutdown is very likely. Call us pragmatic.

What can Congress to do avoid the budgetary equivalent of a Thanos snap? In short, go to work and do their job. Nothing says “I love you” more than short-changing 55,000 new recruits the ability to train,

There is a fantastic amount of suspension of disbelief where the public can vote someone into a political office where they collect $174,000 and enjoy 177 work days (48%) in 2023 (118th Congress (2023-2024) 2024). For comparison, the average American works 260 days per year. For the warfighters in uniform, that is probably closer to 300 days per year. Regardless, the Army is ran and legislated by the people through politicians who can sometimes seems more self-absorbed than looking at the bigger picture. America’s ability to operate continuously matters. For our Armed Forces, this is doubly so. Indecision and partisan politics do not instill a sense of confidence.

Next up, when is our country going to stop using the Federal Star Card and start paying off our insanely massive debt?

A government shutdown on October 1 is highly unlikely, but avoiding one requires adopting a CR that funds all programs at the FY24 level without introducing new priorities, starts, or procurements. We will note that anything is possible and could be completely wrong. This approach aims to maintain operational readiness and support the ongoing development of a lethal joint force.

Conclusion: National Defense Deserves Budgetary Predictability

The negotiations surrounding the CR for FY25 highlight the complexities of government spending and the critical need to ensure our Nation’s operational readiness across various programs. The House and Senate can continue to grandstand with classic delay tactics, gaslighting their constituents or work towards resolving funding differences, the focus remains on avoiding a government shutdown and supporting key defense priorities.

How is the looming CR impacting you, your soldiers, and your organization’s operational readiness?

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