The U.S. Congress’ most fundamental power — the power of the purse — is often overlooked in policy discussions. It is especially important in today’s Congress because in addition to giving lawmakers the ability to dictate how taxpayers’ money is spent, the appropriations process gives Congress a way to enact contentious policy initiatives unrelated to government spending that have stalled through traditional legislative means. In a divided Congress, like the one set to begin in January, appropriations legislation becomes an important tool to bypass gridlock.

Republicans control the House of Representatives until the end of the year, but the ongoing negotiations to fund approximately 25 percent of the federal government and pass the remaining seven appropriations bills for fiscal year (FY) 2019 show how difficult funding the government, and legislating, may become when Democrats hold the House majority. Without an agreement by December 21, the unfunded 25 percent of the government will shut down. The most contentious issue has been whether and how to fund immigration initiatives, including a border wall but it appears that Congress and the White House have agreed to delay immigration decisions and pass a short term extension that will fund the remaining part of the government until February 8, 2019.

Critical upcoming issues include:

1. Reassessing earmarks. Republicans banned congressionally directed spending, or “earmarks,” in 2011, but many lawmakers in both parties want to repeal the moratorium. Proponents believe earmarks help give lawmakers an incentive to bridge policy differences by providing them the opportunity to advance constituent interests. They also believe that these targeted measures are an important way for legislators to manage the challenge of applying general principles in complex laws to specific situations, and they argue that earmarks protect legislators’ role in a system of separated powers. Opponents of restoring the practice often cite the high-profile scandals of the early 2000s to argue that the earmarking process is irreparable and led to abuse, corruption and wasteful spending.

Before 2011, it was common for individual members of Congress to secure funds — ranging from tens of thousands to millions of dollars — toward a variety of projects in their districts or states. Generally, earmarks included initiatives like capital investment grants for public transportation improvements; funding for university research and for specific public water or wastewater projects; funding of healthcare initiatives supporting certain patient classes; or financing for public broadband or cybersecurity projects. When the practice was prevalent, requests were granted to both for-profit and nonprofit entities, although only a few members of Congress sought appropriations for for-profit entities unless there was a clear governmental purpose for the appropriation. For example, a private entity was awarded funds for a solar lighting demonstration project for use by the Department of Energy, and a nonprofit university was awarded funding to increase biomedical research. If restored, subsidies may be available for similar initiatives. However, qualification criteria may be created. Some possible restrictions:

  • requiring lawmakers to publicly post funding requests and justifications online, providing public access to the process
  • narrowing the scope of earmark requests to just infrastructure, flood control or water resource development projects; the rules might include a requirement that the requests originate from a state or local government
  • prohibiting directives for the private sector
  • requiring that directives originate in the original, base bill, prohibiting provisions from being added to a measure late in the process, for example, a conference report

Because presumptive Speaker of the House Nancy Pelosi (D-Calif.) and newly elected House majority leader for the upcoming Congress, Steny Hoyer (D-Md.) — former members of the Appropriations Committee — support the return of earmarks, earmark reform is widely expected to be part of a comprehensive House rules package bill that will pass at the beginning of the year. Regardless of the specifics, anticipated chair of the House Appropriations Committee, Nita Lowey (D-N.Y.), has promised members more control over funding decisions to address local projects.

2. New budget deal. Next year, lawmakers will work to increase budget caps on discretionary spending, which will create opportunities to fund various government programs. Lifting the ceiling on discretionary spending will likely be part of negotiating a new Bipartisan Budget Act for FY 2020 and 2021. The current political climate makes agreement challenging, but if a new deal is not reached next year, spending levels will decrease by approximately $90 billion through a process known as sequestration. The threat of sequestration began in 2011, but Congress has raised the caps and prevented mandatory cuts to federal programs three times, most recently in February 2018. In addressing the budget caps, Republicans will likely prioritize increasing the defense spending cap, while Democrats will push for raising the nondefense cap to grow programs in such areas as scientific research, environmental protection and public health. Negotiations may include additional funding for other nondefense legislative priorities, such as opioid and mental health treatment and infrastructure improvements for veteran clinics, highways, water and rural broadband.