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What happens if Congress never passes a budget?

Sen. Patty Murray has been sounding alarm bells recently about the possibility of a full-year continuing resolution. This would happen if the House simply gave up on enacting a budget for the current year and instead extended current spending through September.

But there's a catch to a full-year CR: The debt ceiling deal has a provision that says budgets will be cut 1% from 2023 levels if a CR is in effect on January 1. This would take effect in May if no budget has been passed by then.

But then there's another catch: someone has to decide what 2023 levels were and then shave them by 1%. You'd think this would be a black-and-white issue: just look at last year's appropriations bills and add everything up. But no. In practice, the Congressional Budget Office is forced to estimate appropriations levels:

Some bills...name specific amounts....Other bills authorize the appropriation of “such sums as may be necessary”....And still others set forth programmatic directions...that do not explicitly authorize appropriations for those purposes.

In 2022, CBO estimated that nondefense discretionary spending would be $987 billion. At the end of 2023 it recalculated and decided that it had actually been $917 billion. That's a reduction of $70 billion. Add a 1% cut and you have a reduction of $77 billion. This appears to be the amount that Patty Murray is upset about.

I am completely befuddled by this. For starters, every other source puts 2023 spending at $744 billion. This includes the usually reliable Congressional Research Service just a couple of months ago. That's nowhere near either of CBO's estimates.

Second, the CBO's reduction doesn't represent a real reduction. It's merely a new estimate of how much was actually appropriated and spent. A 1% cut would still be 1% from actual 2023 spending levels.

Third, there's a different explanation for Murray's alarm, namely that it involves "side deals" which were part of the debt ceiling talks. Those deals were made by Kevin McCarthy, and Mike Johnson is (allegedly) ignoring them. This amounts to a difference of about $70 billion.

Finally, David Dayen has yet another explanation here, namely that the CR merely has some technical errors that haven't been fixed. But I can't make sense of that either. The CR is a simple, brute force law that says appropriations will continue "at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2023." There's not much room for technical errors, and those errors would only amount to a few billion dollars anyway.

So would a full-year CR really produce enormous cuts to actual spending, as opposed to merely a change in how spending is estimated? I'm confused. If I find a definitive answer, I'll let you know.

17 thoughts on “What happens if Congress never passes a budget?

    1. MarissaTipton

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    2. HokieAnnie

      Often the supplemental appropriations (allocations are a lower level) are multi-year or no year funds so they can be spent into the CR until they run out.

  1. HokieAnnie

    A CR means cuts to existing programs due to regular inflation. Also it freezes things in place, no new starts. Instead we are wasting time to impeach Secretary Myorkas of DHS and going after Hunter Biden.

  2. bbleh

    Those deals were made by Kevin McCarthy, and Mike Johnson is (allegedly) ignoring them.

    Congressional Republicans acting in ... bad faith? O noes! It's unpossible!

  3. bharshaw

    I remember in 1986 there was the Gramm-Rudman-Hollings legislation which called for cutting programs across the board, which was a nightmare to administer. I'm not sure how those provisions compare with the current setup. https://en.wikipedia.org/wiki/Gramm%E2%80%93Rudman%E2%80%93Hollings_Balanced_Budget_Act#:~:text=The%20term%20%22budget%20sequestration%22%20was,United%20States%20federal%20budget%20deficit.

    IIRC we just had one year where it came into real effect before Congress and the administration figured out how to evade it sufficiently that it became ineffective.

  4. KJK

    Well first they need to threaten shutting down the government unless they can build a 2000 mile boarder wall and set up migrant detention camps. Then they have to impeach Mayorkas and Hunter's dad, and investigate all university's DEI initiatives.

    So much to do, so little time to do it in between fundraising and campaigning to keep their jobs and benefits.

    1. Salamander

      Not to mention Xitting, Facebooking (Faceplanting??), grandstanding on OnAmNewz, and the like. Busy, busy, busy!

    2. bbleh

      ... and their supporters will keep voting for them, the cultists because they viscerally crave the WWE-like entertainment and are too ignorant to understand governance, and -- arguably worse -- the half or so who style themselves "moderate" and "sensible," because ... uhh ... they'll make the trains run on time? And who believes all that silly nonsense about "camps" anyway?

  5. WanderinMCD

    Does it even matter what the debt ceiling deal says? If two laws conflict, the newer legislation is what counts, right?

    1. bharshaw

      Don't believe so. I've seen clauses in bills which say something like: "notwithstanding any provision in any other law, for purposes of this law xx shall be defined as yy". But typically the bill drafters working for Congress and the attorneys in the affected agency know where there might be conflicts between existing laws and the new bill and avoid it.

      1. bbleh

        I think WanderinMCD is right. Such a "notwithstanding" provision can apply to other laws in effect at the time, but Congress can always pass a new law saying effectively "law X is no longer operative." It's pretty settled that "Congress cannot 'bind' future Congresses."

        Now if there's some question, eg if a new law does not invalidate -- either explicitly or implicitly -- an older one, then it probably would fall to the courts to sort it all out. But I'd guess generally deference would be given to newer laws when in doubt.

        (Plus of course, a "deal" is not a law.)

  6. Mitch Guthman

    I’m interested in whether Speaker Johnson is honoring all of the terms of the deal. If he isn’t. Why are the Democrats apparently letting him slide? If the Democrats were a real political party, they’d be out hollering and wanping up a storm denouncing Johnson and the Republicans instead of being nonpartisan and sitting on the sidelines waiting to see what the Republicans are going to allow to come to pass.

    The Democrats are just feckless. We need an opposition party that can actually stand up for what’s right.

    1. Yehouda

      "... , they’d be out hollering and wanping up a storm denouncing Johnson ..."

      I think the logic is that anybody that even considers voting for a Republican will not be swayed by just failure to honor an agreement, so it is not going to convince anybody.

      1. Mitch Guthman

        Somehow the Republicans are able to dominate the political sphere and set the narrative. Somehow Republican hooping and hollering is frequently effective. Maybe the Democrats should try standing up for themselves occasionally. Maybe it will change a few minds.

  7. civiltwilight

    "For starters, every other source puts 2023 spending at $744 billion". We don't know the spending/income/deficit for 2023. Private companies do not have a solid number for their 2023 spending/income/profit or loss. It is only January 3rd.
    According to the CBO, in 2022, the federal government spent 6.3 Trillion and acquired 4.9 Trillion for a net loss of 1.4 Trillion.

  8. Pingback: The federal budget — explained! – Kevin Drum

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