Every year Congress must pass spending legislation to fund the government. This is handled by the 12 subcommittees of the Appropriations Committee that are in charge of deciding how federal funding will be distributed among all programs within all federal agencies. The process officially starts with the Administration submitting to Congress the President’s budget for that fiscal year. The President’s budget details a vision for spending, but Congress decides where the money will flow.
Category: Capitol Corner
On Monday, April 4th, congressional lawmakers unveiled a $10 billion agreement for emergency Covid-19 funding to help with costs like vaccines, tests, therapeutics and other supplies. Thankfully the bill does not rescind billions in state funding under American Rescue Plan Act (ARPA) funds to pay for the new spending package, after an earlier proposal called for taking back about $7 billion from 30 states, including North Carolina, to do so. Congressional negotiators had initially looked to take back funds promised to states to help pay for the emergency Covid funding while working on the $1.5 trillion omnibus spending bill for the current fiscal year.
Congress has passed the $1.5 trillion omnibus appropriations bill that funds the federal government through September 30, 2022 and delivers $14 billion to help Ukraine, clearing the bill for President Joe Biden’s signature. This is the first annual funding package in a decade not under the Budget Control Act of 2011 and therefore increases to many programs were possible. There is an almost seven percent increase for non-defense agencies to $730 billion. A six percent increase is included for national defense for $782 billion.
Congress is still working to finalize full-year funding for the federal government by agreeing to a broad framework that will allow them to hash out details and pass a package that could reach $1.5 trillion in the coming weeks. The federal government is currently operating under a Continuing Resolution (CR) through February 18 that keeps programs at fiscal 2021 levels, but Congress is expected to pass another short-term CR through March 11 until a final deal can be reached. The goal is to pass a fiscal 2022 omnibus bill, which would increase funding for many domestic programs and unlock the spending created with passage of the Infrastructure Investment and Jobs Act (a.k.a. Bipartisan Infrastructure Law).
If there was ever a good time to focus on federal competitive grants, it is now. Federal grants to states and local governments have risen 37%, outpacing the average annual increase of 4% in the prior half-decade. Relative to 2008, grants have increased 93% accounting for inflation. In the recently passed Infrastructure Investment and Jobs Act (IIJA), almost 80% of the $550 billion in new spending the law provides will go to projects funded entirely or primarily by grants. As a result, federal agencies are staffing up and on the same day President Biden signed the IIJA into law (now called the Bipartisan Infrastructure Law (BIL) by the Administration), he also released an Executive Order creating an Infrastructure Implementation Task Force and named Mitch Landrieu to serve as Infrastructure Implementation Coordinator.
On November 18th, after months of negotiations between state legislators, Governor Cooper signed into law North Carolina’s first budget in nearly three years. The $25.9 billion spending plan allocates state revenue funds and appropriates the $5.4 billion of American Rescue Plan funds received from the federal government. One of the most notable items is the $1 billion investment in broadband expansion, which, when combined with the state’s forthcoming allotment of federal funding from the Infrastructure Investment and Jobs Act, will help to improve internet access statewide.
In Washington, Congress is acting quickly to address a number of must-have spending measures before the end of the year while simultaneously trying to complete work on the Build Back Better Act (BBBA). BBBA is a social programs and climate bill that completes the President’s three-part economic agenda.
Centralina delegates recently met with Congresswoman Virginia Foxx to discuss regional priorities and local community needs. During the meeting, Congresswoman Foxx brought to everyone’s attention the little known benefit to businesses that are eligible for a tax exclusion of $5,250 for paying employees’ student loans. This assistance is also tax-free to the employee and available through 2025. Read more about this education assistance and the new flexibility for ARPA fund allocation.
On September 30, the end of the current federal fiscal year, President Joe Biden signed into law a continuing resolution (CR) to fund the government through December 3. The CR funds the federal government at current levels, averts a government shutdown and allows Congress more time to reach an agreement on FY22 appropriations. The U.S. House of Representatives has passed nine of the 12 annual spending bills, but the U.S. Senate has yet to pass any.
At the same time, negotiations reached a stalemate over the $1.2 trillion Infrastructure Investment and Jobs Act and the massive $3.5 trillion budget reconciliation. The budget reconciliation plan, known as Build Back Better, is a tax and spend package covering 10 years for social programs and climate action that is part of President’s Biden domestic agenda. Using the budget reconciliation process allows it to pass with a simple majority, without Republican support.
Congress returns in September to a legislative calendar packed with end-of-the-month and end-of-the-fiscal year deadlines, as well as high profile legislation such as the infrastructure bill and a $3.5 trillion reconciliation package that reflects President Biden’s American Families Plan. Meanwhile, Centralina’s members are meeting with our region’s congressional delegation.