It’s a little hard to sort out.
Wait. The government runs out of money next week?
I thought the House and Senate just passed a budget?
When do the House and Senate vote on President Trump’s “big, beautiful bill?”
Doesn’t that address the debt ceiling?
I don’t blame you if it’s hard to follow. There are really four distinct issues with which Congress is grappling. So let me try to sort it out for you.
THEME OF TRUMP’S ADDRESS TO CONGRESS REVEALED
Let’s first explain government funding.
The deadline for Congress to avoid a government shutdown is 11:59:59 p.m. ET on Friday, March 14. The House and Senate must figure out how to either re-up all current funding at existing levels for a short time period – or face a shutdown. The other option – which is utterly unrealistic at this point – is for the House and Senate to pass all 12 of the annual spending bills which run the government. The House approved several of these last year, but the Senate hasn’t OK’d any of those bills.
Keep in mind, these are spending measures for fiscal year 2025. They were due Oct. 1, so both Democrats and Republicans have stumbled in this effort.
Congress finally approved a “skinny” stopgap spending package just before Christmas to keep the lights on. That was after adopting another interim measure to avoid a government shutdown last Oct. 1 – the start of fiscal year 2025.
What does all of this mean? Well, for starters, Congress is already running behind funding the government for fiscal year 2026 – which begins this coming Oct. 1. Lawmakers are trapped on a vicious treadmill. That’s because it’s been years since Congress finished its bills on time. Congress didn’t approve the final spending plan for fiscal year 2024 until April of last year, seven months and change after the deadline.
House Speaker Mike Johnson, R-LA, and President Donald Trump are signaling they’re good with another “year-long” Continuing Resolution, or CR in Congress-speak. That just renews the funding at existing levels through the fall. House Appropriations Committee Chairman Tom Cole, R-Okla., says to expect text of a CR over the weekend.
But some conservatives are opposed to all CRs. Military hawks have yet to weigh in on the consequences of a CR, but those who support the military generally hate them. The reason? The Pentagon consumes about 55% of all money that Congress appropriates to federal departments and agencies annually. So a CR is disproportionately damaging to the armed forces. No department likes to operate under a CR because spending doesn’t go up, but it’s particularly troubling for the military since it enjoys the largest slice of federal dollars doled out by Congress.
SEVERAL DEMOCRATS TO BOYCOTT TRUMP’S ‘PEP RALLY’ SPEECH TO CONGRESS
Funding the government is completely separate from what House and Senate Republicans prepped in late February: a budget. Yes, a “budget” may sound like the legislative vehicle to run the government, but it’s not. A “budget” is a general, non-binding blueprint which lays out the prospective expenditures for all federal programs. That includes “discretionary” spending – which is what Congress allocates to run the government each year – and “mandatory” spending. That includes dollars which lawmakers green-lighted at one point for Medicare, Medicaid and Social Security. Beneficiaries of those programs receive assistance based on qualifications. A big chunk of the mandatory spending pie includes interest on the debt. Congress doesn’t draw up a bill to alter this spending each year, but it could, and that’s where Republicans are eyeing cuts.
Note that entitlements and mandatory spending comprise about 65% of every dollar spent by the government. Earlier, I wrote about how the Pentagon consumes more than 50% of discretionary spending. That’s a pittance compared to what goes out the door for entitlements. And that’s why it’s such a challenge for Republicans to cut spending – and cut taxes – without blowing an even bigger hole in the already yawning deficit chasm.
But mechanically, here’s what must happen next.
The House and Senate approved different budget frameworks. The House plan went all the way with major spending cuts and a renewal of the 2017 Trump tax cuts. The Senate version was leaner – focused on border security.
Here’s the most important thing I will write in this column.
The only reason Republicans want to develop a budget blueprint is so they can sidestep a Senate filibuster when it comes to advancing their final piece of legislation. It’s about the math. Republicans only have 53 Senate seats. Sixty votes are required to overcome a filibuster. So while Republicans might be able to thread the needle and approve the plan with their narrow majority in the House, moving it through the Senate is tough.
Unless…
They can avoid a filibuster.
That’s why House and Senate Republicans prepared a budget framework. Then they have the opportunity to plop their final bill into the budget reconciliation vehicle and avoid a filibuster. Otherwise, the gig is up.
Still, there are lots of problems for the GOP.
In order to use budget reconciliation, the House and Senate must approve the SAME framework. That hasn’t happened yet. Then, via the budget reconciliation process, the House and Senate must align on the same bill.
There’s a lot of work ahead.
And don’t forget that a government shutdown could sidetrack or delay all of this.
That brings us to the debt ceiling.
First, let’s define the debt ceiling. It is a distinct issue from government funding and the budget frameworks lawmakers are now working on. The debt ceiling is simply a threshold as to how much red ink the federal government can carry at any one time. That figure is now around $36 trillion. A failure to address the debt ceiling could make the stock and bond markets go bonkers.
President Trump tried to get Congressional Republicans to shoehorn an increase or suspension of the debt ceiling into the CR to avoid a government shutdown last fall. The president parachuted this demand into talks to fund the government at the last minute – even though Johnson and others had not heard anything about that request until two days before the deadline.
It’s unclear whether the debt ceiling could wind up in a spending measure or attached to another piece of legislation in the next few months. Some Republicans have never voted for a debt ceiling increase. A successful increase of the debt limit will likely need the assistance of Democrats voting yea on the floor. The numbers won’t work out for House Republicans. Plus, Democrats would be necessary to break a filibuster on the plan, since Republicans only hold 53 Senate seats.
The government technically hit the debt ceiling in January. But via a mechanism the Treasury Department calls “extraordinary measures,” the government can delay an actual drop-dead date for a few months. That means the true debt ceiling deadline probably comes in April or May.
So there you have it. Four distinct fiscal issues facing Congress right now: government funding, a “budget” for the “reconciliation” process to avoid a filibuster, President Trump’s policy agenda, and a race to avoid a debt ceiling collision.
None are directly related, but yet all intertwined. The only thing Congress must do is fund the government and wrestle with the debt ceiling. And an imbroglio over those issues could sidetrack efforts to finalize the budget framework and move the president’s policy agenda.
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