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Congressional Updates
What’s the Latest From Washington, D.C.
There is a glimmer of hope for several of NCSL’s priorities for the final days of the 118th Congress. A few items could be attached to a continuing resolution, while others get punted to the 119th.
Fiscal Year 2025 Appropriations: Congressional leaders are working on another continuing resolution (CR) providing for fiscal year 2025 appropriations into March 2025. Lawmakers are working on finishing text that may include billions in disaster aid and other legislation waiting for reauthorization, such as the water resources bill and a one-year extension of the farm bill. Legislators expected text to be released over the weekend, but negotiators have delayed its release over disagreements on more economic aid for farmers impacted by natural disasters and market volatility. Current government funding expires at the end of day, Friday, Dec. 20.
Second Chance Act: The Senate unanimously passed the NCSL-supported bipartisan Second Chance Reauthorization Act, which would provide critical tools and support for formerly incarcerated people to successfully reenter society. We’re hoping to see the House follow suit before the end of the Congress.
The Thomas R. Carper Water Resources Development Act of 2024: The WRDA, which included the Economic Development Reauthorization Act, passed the House with an overwhelming 399-18 bipartisan vote. It is likely that the Senate could pass the bill under unanimous consent very soon. If that is not the case, the backup plan would be to attach the measure to the continuing resolution.
Farm bill: Congress is expected to pass another extension of the current law before the end of the year and look to pass a new, long-term bill when the new Congress is seated.
Disaster relief: The disaster relief fund, for which the Biden administration has requested over $100 billion in supplemental funding, is currently holding up the negotiations for a continuing resolution. Many Republicans would like to see the relief fund’s allocation decrease, but party members from areas tormented by extreme weather and natural disasters disagree.
Workforce Investment and Opportunity Act Reauthorization: The House and Senate reached an agreement on a reauthorization of the act in late November. The bill is considered unlikely to move on its own and would need to be attached to another legislative vehicle, such as a CR, to fund the government beyond Dec. 20.
Evolving Timeline for Federal Tax Legislation in 2025
Congressional leaders continue to develop legislation and discuss a timeline for passage of federal tax legislation in 2025. Last week, Sen. John Thune (R-S.D.), the incoming majority leader for the 119th Congress, said he expected federal tax legislation to pass by summer. “It’s going to take a while to put that big package together because there are so many moving parts,” he said. A tax bill, according to Thune, would be the second of two separate reconciliation bills focused on President-elect Donald Trump’s priorities, coming after an earlier reconciliation bill on border, defense and energy policy. However, other GOP leaders, especially in the House, seek a quicker timeline for movement of a tax package. Meanwhile, legislators are carrying into the next Congress their efforts to repeal the state and local tax deduction. House Majority Leader Steve Scalise (R-La.) recently acknowledged that concerns about the tax deduction and the cap put in place by the Tax Cut and Jobs Act could be an obstacle to a sweeping tax package next year. Scalise highlighted that five states are most affected by the cap, and with an even tighter majority for the next Congress, the support of Republicans from those states, especially California, New Jersey and New York, is critical to getting a tax bill passed.
Navigating Fiscal Shifts: What Budget Reconciliation Means for State Policymakers
As discussions in Washington, D.C., begin to intensify, it is increasingly likely that the budget reconciliation process will be used to move key legislative agenda items along. Senators, including John Thune (R-S.D.), have discussed how this measure could be used to avoid traditional legislative obstacles and promptly enact significant changes, specifically around fiscal policy. Understanding the reconciliation process is crucial, as it affects not only federal finances but also state budgets and programs across the country. Budget reconciliation is a legislative process that allows Congress to make changes to federal tax and spending laws to support a budget resolution. Unlike conventional legislation, reconciliation requires only a simple majority in the Senate, avoiding the filibuster.
Reconciliation is typically used to modify fiscal policies, such as tax rates, entitlement program funding and deficit reduction. While reconciliation’s focus is on federal finances, its effects often ripple down to states, especially in areas like Medicaid, health care, social services and federal grants. State budgets can be directly impacted by changes to these programs, requiring states to modify their own budgets or policies. With the potential for substantial shifts in key federal programs, understanding and monitoring reconciliation allows state leaders to prepare for or advocate against changes that could affect their residents’ well-being and their state’s financial health. Read more