(1) Federal shutdown looming Friday of next week; (2) House and Senate GOP split on Medicaid, tax cuts; (3) OMB, DOGE Continue Worker Firings, Illegal Impoundment of Funds, As Litigation Continues; (4) The Road to Autocracy: Congressional Republicans Abandon Power of the Purse as President Trump Aligns with Russia; and this week’s Budget Fact Check.
1. Federal shutdown looming Friday of next week
Temporary funding for the current fiscal year expires on Friday, March 14, 2025, at midnight. (Background.--When fiscal year 2025 began last October 1, Congress temporarily continued 2024 funding levels through December 20, 2024, and then again through next Friday, March 14, 2025.)
Without passage of the 12 regular appropriation bills for 2025 or another temporary funding bill, the government will shut down as required by the Antideficiency Act. (Background--The longest government shutdown in U.S. history—35 days—occurred during the first Trump term.)
The outlook is complicated because Republicans lack the votes to pass an FY 2025 funding measure on their own (60 votes being required in the Senate), while some Democrats may demand including provisions that limit or rollback Office of Management and Budget (“OMB”) or DOGE actions freezing grants, canceling contracts, engaging in mass firings of workers, or gaining access to private information at Treasury, the Office of Personnel Management, and other agencies.
At this juncture, President Trump and Speaker Mike Johnson are opting for a full-year extension of funding at 2024 levels (a so-called “clean continuing resolution” or “CR”). (Background.--This would mean discarding all of the detailed work and program oversight conducted by the House and Senate appropriators, and dropping all congressional earmarks).
However, House Democrats are saying the GOP has not approached them with a CR proposal—possibly suggesting that Speaker Johnson believes he can pass a CR without any Democratic votes. Even then, a clean CR in the Senate would require at least 7 Democratic votes to reach the necessary 60—requiring bipartisan negotiation.
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2. Budget Resolution: House and Senate GOP split on Medicaid, tax cuts
While lawmakers are grappling with the impending government shutdown, House and Senate Republican leaders are trying to bridge the differences between the House-passed (H.Con.Res. 14) and Senate-passed (S.Con.Res. 7) budget resolutions.
The congressional budget resolution is key to the GOP strategy to advance the Trump Administration’s multiyear agenda for large tax cuts (the 2017 individual and estate tax cuts expire at the end of 2025 and Trump wants new cuts to the corporate tax rate and new tax exemptions for tip income and Social Security benefits); large permanent spending cuts in entitlements; and immediate spending increases for defense, immigration enforcement and border security.
The budget resolution is key to the GOP strategy because it unlocks the “budget reconciliation process” – a fast-track, filibuster-proof legislative vehicle that can pass the Senate with only 50 votes, rather than the 60 votes typically needed to bring debate to an end on controversial measures. (The GOP holds only 53 seats in the Senate.)
Key House-Senate differences under negotiation are:
1) The House-passed resolution includes the Trump tax cuts (costing $4.5 trillion), while the Senate resolution does not. Some GOP senators want to put off tax cuts until later in the year to speed passage of immigrant deportation funding, while others favor including the tax cuts but believe the House hasn’t gone far enough, wanting the tax cuts to be permanent.
2) The House resolution would pay for the tax cuts partly by instructing its Energy & Commerce Committee to come up with $880 billion in entitlement cuts—most of which would inevitably come from cuts to Medicaid—the federal-state program providing health and long-term care coverage to more than 80 million low-income children, adults, seniors, and people with disabilities.
Nearly half the states have close to 1 out of 5 people on Medicaid and 19 states have more than that. There are more Americans receiving Medicaid than Medicare—the national health insurance program for 65 million seniors and disabled workers—giving some in the GOP serious concerns about the House plan.
Nevertheless, House Speaker Johnson said last Wednesday, “we’re going to cut the fraud, waste and abuse out of Medicaid.”
3) The House-passed resolution would instruct its Agriculture Committee to cut spending by $230 billion—much of which would likely be taken from food stamps (now called “SNAP”) and other nutrition programs.
4) The House resolution would increase the statutory debt limit by $4 trillion; the Senate budget resolution would not. When, and how, to increase the debt ceiling is always a highly contentious matter.
5) The House budget plan uses a budget “scoring” gimmick to hide its $2.8 to $4 trillion increase in the public debt (by adopting overly optimistic assumptions about economic growth). Some budget hawks want the bill to be deficit neutral without gimmicks.
Bottom line: the budget reconciliation process will not begin unless, and until, the House and Senate arrive at a compromise budget resolution.
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3. OMB, DOGE Continue Worker Firings, Illegal Impoundment of Funds, As Litigation Continues
Russell Vought, White House Budget (OMB) Director, and Elon Musk, de facto director of the White House government efficiency or “DOGE” office, are continuing to advance federal firings, cancellation of grants, contracts, and entire programs, and shutter entire agencies, in violation of the Impoundment Control Act (“Act”) which requires passage of a rescission law before any congressionally appropriated funds may be canceled. The following are key developments including key court actions:
· 30,000 workers already fired, including 6000 veterans: New York Magazine’s tally early last week estimated 30,000 federal workers had already been fired. The firings are occurring without any notice to Congress which, under its Article I authority, appropriates funds for specific levels of federal personnel deemed appropriate to fulfill statutory agency missions. According to House Democratic appropriators, the 30,000 fired include 6000 veterans.
· Latest news on agencies and operations across the federal government facing deep personnel cuts without congressional oversight or authorization: Consumer Financial Protection Bureau; Dept. of Education; Federal Aviation Administration; Internal Revenue Service; National Weather Service; Social Security Administration; U.S. Agency for International Development; and Veterans Affairs.
· OMB formally instructed agencies to prepare for “large-scale reductions in force” without congressional authorization.
· A Federal Judge ordered the Office of Personnel Management (OPM) to rescind directives that initiated mass firing of probationary workers. However, the next day, Elon Musk reportedly sent another round of threatening emails to federal civilian workers demanding a list of activities—or be fired. President Trump reinforced Musk’s threat saying employees failing to answer are “on the bubble.”
· Shutting down an agency without congressional notification or rescission: The Administration reportedly intends to fire nearly all Consumer Financial Protection Bureau staff and wind down the independent agency—set up by statute after the 2008 financial meltdown to protect consumers from predatory and deceptive lending practices. Last year, the Supreme Court explicitly acknowledged in CFSA v. CFPB that the agency was funded via Congress’ constitutional appropriation authority.
· Key court actions last week impacting federal spending, workers and programs (for full details, link to the Just Security website): In a challenge to OMB’s freeze of grants, loans, and assistance programs, the U.S. District Court, D.C., granted an injunction barring the administration from implementing the blanket freeze on disbursement of federal funds; In a challenge to OPM ordering the termination of tens of thousands of probationary employees, the U.S. District Court, Northern District of CA, ruled that the OPM directives were “unlawful, invalid, and must be stopped and rescinded”; In a challenge to the Administration’s stop-work order for foreign assistance grants, the Supreme Court last week granted a temporary pause in enforcement of a District Court order barring the blanket suspension of foreign aid funding; In a challenge under the Administrative Procedure Act (APA) and Privacy Act to DOGE having access to Treasury, OPM, and Dept. of Education information systems, the U.S. District Court, Maryland, granted a temporary order barring disclosure of sensitive information; In a challenge to the removal of an independent agency leader (Special Counsel Dellinger who protects federal whistleblowers), the U.S. District Court, D.C., issued an order barring his removal.
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4. The Road to Autocracy: Congressional Republicans Abandon Power of the Purse as Trump Aligns with Russia
President Trump and his congressional enablers have placed the U.S. on the dangerous road to dictatorship by weakening Congress’ constitutional authority over appropriations and placing in question continued U.S. adherence to key NATO Treaty obligations.
· GOP abandons Power of the Purse: Our Founders viewed Congress’ “power of the purse” as the surest hedge against executive branch tyranny. However, James Madison and the other Framers of the Constitution did not anticipate United States Representatives and Senators placing loyalty to a political party or an autocratic individual above their own constitutional prerogatives.
Yet, last week, the Chair of the House Appropriations Committee, Rep. Tom Cole (R-OK), said in a stunning statement of subservience to President Trump and Elon Musk, “A Republican Senate and a Republican House are not going to limit what a president can do.” Cole’s counterpart in the Senate, Appropriations Chair Susan Collins (R-ME), has been largely silent, as Russell Vought’s OMB and Elon Musk’s DOGE have canceled, without legal authority and in blatant violation of the Impoundment Control Act, a wide swath of federal programs, grants, and contracts, fired thousands of federal employees and shuttered entire agencies established and funded by Congress.
· Backing away from America’s NATO Treaty Obligations: Under Article VI of the U.S. Constitution, treaties are “the supreme Law of the Land.” The 1949 NATO treaty is currently the most significant U.S. Treaty, having unified western democracies against Soviet (now Russian) aggression and expansionism, and effectively deterred a 3rd World War for the last 75 years.
However, President Trump’s alignment with Russia’s dictator in his February 28 meeting with Ukraine’s President Zelenskyy, has left NATO members wondering if President Trump can be trusted to fulfill U.S. NATO treaty obligations.
This week’s Budget Fact Check:
If you think the illegal mass firings are somehow justified as an “emergency” deficit reduction effort—as asserted by Elon Musk—don’t be fooled. In 2022, compensation for federal civilian employees cost $271 billion, less than one-fifth of that year’s $1.4 trillion budget deficit and only 5 percent of that year’s total spending. Moreover—and this should be quite revealing—at the same time that illegal mass firings of workers are under way, Congress is debating a budget plan that would add another $2.8 to $4 trillion to the public debt in order to finance more tax cuts—the largest benefits of which go to the wealthiest taxpayers. Any serious effort to tame the federal debt would begin by doing no harm—not making the public debt needlessly worse.
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About the author: Charles S. Konigsberg, J.D., served as Assistant Director at the White House Office of Management and Budget for three successive Budget Directors; General Counsel at the U.S. Senate Finance Committee; Minority Chief Counsel at the U.S. Senate Rules Committee; Staff Attorney at the U.S. Senate Budget Committee; Director of Congressional Affairs at CFPB and CNCS; and Staff Director of a national bipartisan budget task force. He is an Independent, having served Democratic and Republican Administrations and Senators.
He is author of the book, Trillions: A Primer on Federal Spending, Taxes, the U.S. Debt Ceiling, and Fiscal Law. (2024-25 edition currently available at LexisNexis.com; the 2025-26 edition will be published by Amazon.com after release of the Trump FY 2026 budget this spring.)
He is also Publisher of Appropriations.com which tracks appropriation bills; and GovBudget.com which tracks major federal developments, by subject area, each day.
Speaking engagements for your organization and press interviews can be scheduled by calling: (202) 818-8578. Email comments, suggestions, and questions to: ckonigsberg@capitolpublicpolicy.com.