The ticking sound you hear is the final days of the fiscal year

Indecision mixed with turmoil and partisan politics. That’s the familiar brew on Capitol Hill this week. With precisely two weeks until the fiscal year ends, there’s no clear path to any budget deal at the moment. So it’s a busy week as we heard from Bloomberg Government deputy news director Loren Duggan on the Federal Drive with Tom Temin.

Interview transcript:

Loren Duggan Here we are. Every September, we have to do this dance where we figure out if the government will stay funded going into the new fiscal year. We’re a little bit away from a clear answer, as you indicated, based on the turmoil last week around the continuing resolution deal that Speaker Mike Johnson (R-La.) offered on behalf of the Republicans, which ran into resistance, frankly, from both parties and in both chambers. So we’ll see what they do to get over some of those hurdles this week.

Tom Temin And I guess a lot of it had to do with that voting provision. Is that the thing that even some people in the House Republicans didn’t want?

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Loren Duggan Yeah, well there’s always kind of three questions around a CR first, how long does it go? Second, what adjustments do you make the funding levels? And then third, what rides along with it? Because this must pass legislation, it’s unattractive vehicle to try to force something. So on the length front, that was a big problem in both parties. Speaker Johnson proposed six months well into next year, get it past the election and into the next administration, because either way you have a new president. Some people push back, because some people want to clear the slate for the new president or just six months of funding uncertainty isn’t great for defense and other agencies. So that was an issue. Second, the adjustments, the anomalies that were in there weren’t making everyone happy. And then third, as you mentioned, was this provision to require proof of citizenship to register to vote. That’s illegal throughout the country. You can’t vote in a federal election if you aren’t a citizen. But there’s a desire on some Republicans parts to enact legislation around that, and that was rankling people in the Senate as a nonstarter. So there’s kind of a mix of things, but really length in that SAVE act provision where come the key stumbling points.

Tom Temin It seems like no matter what Johnson proposes, 3 or 4 different factions are going to object to something.

Loren Duggan It could be. If you take out this SAVE act provision, and you have a straightforward extension of funding, probably only until later this year to get it into the lame duck session rather than into next year, there’s a mix of votes there, I would think, in both chambers to get through that. But you have to make your own faction pleased before you can get to that point potentially for Johnson. And that’s what they were going into the weekend trying to figure out.

Tom Temin All right. Well, we’ll wait and see then, at this point, what they introduce and how long it will go. The headlines last week were saying increases the shutdown prospects, but not necessarily.

Loren Duggan Not necessarily. There’s still two weeks to go. And last year, I remember we were going in to Sept. 30 with that threat, and they pulled the rabbit out of the hat in the last minute and got it through both chambers, averting that. So is the risk zero? No, because it never is until there’s a deal that people are backing. But there’s still time here to figure this out.

Tom Temin And in the idea of beating the dead horses, or at least the horses that haven’t come back to life yet, the Senate Homeland Security Committee is looking at the national security risks of replacing nonpartisan civil servants with political appointees.

Loren Duggan Yeah, this goes back to Schedule F, which was the Trump administration’s late stage executive order that would have made it easier to shift people from career to political appointees. And that got a lot of pushback, including the Biden administration, as soon as it took over, was getting rid of that. But it’s come up again in the context of the election and things like Project 2025, that although, candidate Trump has distanced himself from that, certainly an idea he already put forward when he was president. So this is going to feature some former civil servants or former officials like Elaine Duke, who was deputy secretary at DHS under the Trump administration, and was there before under Obama. And also, they’ll hear from a former Trump official, James Sherk, who is still working on these issues, even though he’s no longer in government. So it could be an interesting discussion about what the resumption of Schedule F in a potential second Trump administration would look like. And of course, as the hearing title suggests, they’re going to talk a lot about the national security part at both DoD, DHS and other institutions of the government.

Tom Temin We’re speaking with Bloomberg government Deputy News Director Loren Duggan. And another big issue is VA needs $3 billion, it says, to get through the current fiscal year, which is not very long. I don’t know what that means, in terms of their bill paying. And they say that they’re under the two year deal. Their funding is $15 billion short for the following year. Prospects of that happening or some relief coming?

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Loren Duggan There’s a bill separate from the CR that the Republicans in the House have introduced that would give that $3 billion or so to VA in this immediate fiscal year. So it’s a fiscal 2024 supplemental separate from the 2025 question. So there is a potential solution to that on the board. I think they were aiming to do that in a bipartisan basis under a quick procedure, try to get that through. And we’ll see if the Senate picks that up as well. But there is a proposal on the table that would take care of that separate from the CR.

Tom Temin What about nominees? The Senate has some of those to deal with.

Loren Duggan They’ve been focused so far in September on judicial nominees. And that’s been a legacy that President Biden and Chairman Dick Durbin (D-Ill.) of the Judiciary Committee have really tried to push through. They have more than 200 judges. They’ll continue chipping away at that because that’s a legacy that extends beyond the Biden administration and want to get their folks on there. Some other nominees did get hearings last week for the Amtrak board of directors and State Department personnel. So there is still this kind of churn of nominees that will continue going into this week, and they’ll see what they can do before they leave at the end of this month and then in the lame duck session to try to lock people in. Obviously, the ones that are beyond this administration are probably more important and more likely to move if they can get those through than somebody just for the remaining weeks of the Biden administration, if you will.

Tom Temin And Labor Department has still not got a permanent, so to speak, secretary. And that looks like that’s not going to happen this session either.

Loren Duggan Yes. Julie Su, who is nominated twice and has been in an acting capacity, that nomination just seems stalled. And as I said earlier, it’s kind of one of these things we do with that before the end of the year or wait until the next administration, whether it’s Harris or Trump, there will probably be a new chance to nominate someone there, but haven’t heard anything about that one advancing.

Tom Temin And back to the House again. There’s a few other things they’re dealing with on the idea of investment strategies for publicly held companies.

Loren Duggan Yes, these are bills that they’re calling Anti-woke, and they go at things like ESG investment strategies, whether it’s in broader financial services terms, what proxies are trying to do and and advisory firms, things like that in the financial services space. The Education and the Workforce Committee has one that deals with risks and retirement plans and how ESG, environmental, social and governance strategies factor into those plans. And then what’s going on in college campuses as well. So a package of bills dealing with those issues, which are something Republicans want to push in this last month before the election as part of their broader messaging strategy about how they want to approach government. These bills don’t probably have legs beyond this year, but they do lay the groundwork for what a potential Republican administration would do if they were able to take office next year.

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Tom Temin Right. And so just to extend this conversation a bit, how much more time in September do they have to work? Do they work to the very end? And what about the year remaining in the calendar year? That schedule is not all that heavy either because of the election.

Loren Duggan That’s right. So they are scheduled to be in the rest of September, two more weeks. They could always leave early. We saw the House leave early in July. And if they were able to fund the government, maybe they do that again. They won’t come back till after the elections where I think there’s two weeks scheduled in November, and maybe 2 or 3 in December if they have to deal with government funding in the lame duck session, that could make that a busier period. But there’s other things that members want to do, too. Probably waiting till then, whether it’s defense authorization, a farm bill, other legislation that maybe a chairman who’s retiring or gets defeated wants to do as their swan song before they leave. So not a lot of time over the next several months to do things. And when they are in, it’s going to be, I think, a little bit more hectic as they try to wrap up what they can.

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