Barely two months removed from finalizing Fiscal Year 2024 appropriations, Congress is in full swing in the funding process for Fiscal Year 2025. FY25 begins on October 1, 2024.

The House of Representatives passed the Military Construction-VA bill (H.R. 8580), the first of twelve annual appropriations bills that fund the government, by a mostly party-line vote of 209-197. The MilCon-VA bill is traditionally regarded as one of the least controversial funding bills to pass. Several policy riders were adopted to the underlying bill in committee that made the funding bill more partisan.

House leaders are determined to pass all 12 FY25 spending bills out of their chamber prior to the August recess. However, they face a steep challenge as there is currently no bipartisan agreement on funding levels.

Also this week, the House Appropriations subcommittees marked up the Defense, Financial Services and General Government, and State-Foreign Operations and Homeland Security bills. These bills illustrate the turbulent debate and challenge facing lawmakers seeking agreement on funding:

• The Financial Services and General Government Bill, which is the traditional vehicle Congress uses to weigh in on what sort of raise federal employees will receive in the coming year, cuts the Treasury and Internal Revenue Service (IRS) budgets by 10 percent. The IRS budget would be cut by $2.2 billion from this year’s level. "This bill reins in wasteful spending and takes steps to prevent agencies like the IRS from unfairly targeting hardworking Americans," Subcommittee Chairman David Joyce (R-OH) said.
• The House Defense Appropriations Subcommittee approved its spending bill, which would provide $833 billion for the Department of Defense – a 1 percent boost from FY24’s $824.3 billion – and includes a 4.5 percent pay raise for the uniformed military. It includes an additional $2.5 billion for a 15 percent raise for junior enlisted servicemembers. However, the bill contains a number of social policy riders that may jeopardize its passage in the House and negotiations with the U.S. Senate.

Elsewhere, the Congressional Budget Office said it will release its updated 10-year budget baseline and economic outlook on June 18, and its analysis of the president's fiscal 2025 discretionary spending requests on June 27. These documents are critical tools for lawmakers and their appropriations negotiations for FY25.