TBD: Final Action on FY 25 Funding In December or a CR Until Next Year?
This week’s Analysis and Commentary is entitled: “FDA Impacted by the Larger Transition: Some More Q&A.”
TBD: Final Action on FY 25 Funding In December or a CR Until Next Year? The current Continuing Resolution (CR) is set to expire on December 20. So far, no formal announcements have been made regarding next steps.
The outcome of the election is the key variable as to whether Congress completes FY 25 appropriations this year or finishes up in the new Congress next year. As of November 14, the Senate will have a projected Republican majority of 53-47, assuming recount efforts confirm the defeat of U.S. Senator Bob Casey (D-PA).
The House is expected to have a Republican majority. Pending resolution of the last 8 House races, Republicans have a margin of 218 to 209 seats, giving them a certain but thin majority.
There are two camps as to what should come next. Some argue a final bill should be done by the end of the year to clear the way for unencumbered action by the incoming Trump Administration and Republican Congress on FY 2026 and other budget and funding questions (e.g. budget reconciliation). Others argue there should be a CR through March so Republican majorities in the House and Senate can lower FY 25 spending levels.
After the 2016 “change of Administration” election, the federal government operated under a CR through May 5, 2017. By comparison, after the change of Administration election in 2020, final action on FY 21 appropriations was completed on December 28, 2020.
Budget Reconciliation May Dominate Early 2025. Regardless of whether FY 25 funding bills pass in December or are held over to 2025 by the passage of a Continuing Resolution, the primary means of altering federal spending will be a Republican-led budget reconciliation effort that will occur early next year.
According to the Congressional Research Service, the purpose of reconciliation is to change substantive law so revenue and mandatory spending levels are brought into line with budget resolution policies. Reconciliation has generally been used to reduce the deficit through spending reductions or revenue increases, or a combination of the two.
The key advantage of the reconciliation process is a party controlling the Presidency and Congress can rapidly move a large set of priorities through Congress under favorable procedural rules. The most notable–but not the only–such advantage is that only a majority vote is required in the Senate (e.g. filibuster rules do not apply).
One of the limitations of the reconciliation process is the need to distinguish revenue and spending changes (generally permitted) from policy questions that should be resolved through legislation other than reconciliation.
The reconciliation process was used in the first Trump term to enact the Tax Cuts and Jobs Act on December 22, 2017. It was used in the Biden term to enact the American Rescue Plan Act of 2021 on March 11, 2021.
There are a lot of specifics about how reconciliation works and how it has been used as a tool to effect important changes in government fiscal and program policies. We expect to come back to this topic in future Friday Updates.
Change of Administration Drives Different Timeline for President’s FY 26 Budget Request. Following the pattern of past budget requests following a change of Administration, we expect a two-part Trump budget: a “skinny budget” that highlights broad policy perspectives, followed by a detailed budget that offers specifics by agency and program.
After his 2016 victory, President Trump submitted his 2018 Budget Blueprint to Congress on March 16, 2017. The detailed budget was not submitted until May 23, 2017. By comparison, President Biden’s FY 22 discretionary funding request was submitted on April 9, 2021, with detailed Congressional Justifications sent on May 31, 2021.
Robert F. Kennedy Jr. Nominated as Secretary for HHS. President-elect Trump has nominated Robert F. Kennedy Jr. to be Secretary of the Department of Health and Human Services (HHS), which oversees FDA. The President-elect has promised to let Kennedy “go wild” with health and food policy in his administration. Kennedy has said he wants to “clean up corruption, stop the revolving door between industry and government, and return our health agencies to their rich tradition of gold-standard, evidence-based science.”
More about the potential of the Kennedy nomination is in this week’s Analysis and Commentary.
Cassidy to Chair Senate HELP Committee. U.S. Senator Bill Cassidy (R-La.), a policy-focused gastroenterologist, will chair the U.S. Senate Committee on Health, Education, Labor, and Pensions (HELP), which includes FDA in its jurisdiction.
According to POLITICO, Chris Gillott, Cassidy’s former longtime legislative director, Cassidy worked “hand in glove” with Trump. “Cassidy will want to build on that relationship to focus on surprise medical billing, leveraging AI technology, protecting patient health information, and improving the functioning of NIH, CDC, and FDA. He is first and foremost a policymaker and consensus builder,” Gillott said.
More about the implications of the Cassidy chairmanship are in this week’s Analysis and Commentary.
Department of Government Efficiency to Advise on Overhaul of Federal Agencies. President-Elect Trump has announced a new “Department of Government Efficiency” to exist “outside of Government,” giving advice to those in the White House about overhauling federal agencies. It is to be headed by Elon Musk and Vivek Ramaswamy, with a deadline of July 4, 2026, to conclude its work.
There is a long history of these types of efforts being organized by Presidents to provide outside analysis and recommendations on government organization and efficiency. The result is usually a combination of proposals the Administration can implement by itself, with a much larger mix of recommendations that would require Congressional approval.