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Congress Passes Short-term Fiscal Year 2023 Funding Bill

Published: September 30, 2022

Federal Market AnalysisBudgetPolicy and Legislation

The U.S. Congress has passed a short-term continuing resolution (CR) that funds federal agencies and averts a partial government shutdown.

On Thursday, the U.S. Senate passed the Continuing Appropriations and Ukraine Supplemental Appropriations Act of 2023, a stopgap appropriations bill to fund the federal government through December 16, 2022 and buy time for lawmakers to work out the details for a full-year spending bill.

Today, the bill passed in the U.S. House of Representatives so that it may be signed into law by the President in time to avert a partial government shutdown when fiscal year (FY) 2023 begins on October 1st.

With some exceptions highlighted below, the bill keeps spending at federal agencies at FY 2022 levels through mid-December. Further, the bill prevents funding provided by the CR from being used for new program starts and new activities.

Ukraine Assistance and the Department of Defense (DOD)

The legislation includes over $12B in security and financial assistance for Ukraine to defend itself from the ongoing Russian invasion.

Funding highlights include:

  • Appropriates $4.5B for Bilateral Economic Assistance to the Economic Support Fund administered by the White House
  • Provides $35M for Defense Nuclear Nonproliferation activities under the National Nuclear Security Administration (NNSA) at the Department of Energy (DOE)
  • Allocates $500K for the Intelligence Community Management Account

DOD funding highlights include:

  • Provides $7.8B for DOD “to respond to the situation in Ukraine and for related expenses,” broken out across multiple appropriations categories. (See table below.)

  • Allocates $3B for the Ukraine Security Assistance Initiative to provide assistance, including training, equipment, weapons, logistics support, supplies and services, salaries and stipends, sustainment, and intelligence support to the military and national security forces of Ukraine. (This amount is included under the Defense-wide Operations and Maintenance (O&M) category above.)
  • $1.5B may be used for the replacement of DOD stocks and for reimbursement for DOD services and military education and training under the Operation and Maintenance and/or Procurement categories above

Disaster Assistance

Funding and provisions to support disaster relief efforts include:

  • Dictates that specially designated funds including disaster, emergency, and program integrity, in FY 2022 appropriations acts should be considered the same type of funding under the CR
  • Authorizes a transfer of up to $3B previously appropriated to the Overseas Humanitarian, Disaster, and Civic Aid program at DOD to the State Department for continuation of activities associated with Operation Allies Welcome and the successor operation, Operation Enduring Welcome, related to Afghan resettlement
  • Extends authority for the Reclamation States Emergency Drought Relief Act and the Omnibus Public Land Management Act, ensuring the continuation of these Reclamation programs in 17 western states, including emergency drought relief, for the duration of the continuing resolution
  • Provides $18.8B for the Federal Emergency Management Agency (FEMA) to respond to current and future disasters, such as Hurricane Ian
  • Allows FEMA flexibility to spend at a higher rate from the Disaster Relief Fund during the continuing resolution to respond to declared disasters
  • Directs $2.5B in previously provided funding to carry out the DHS FEMA Hermit’s Peak/Calf Canyon Fire Assistance Act
  • Provides $2B to the HUD Community Planning and Development-Community Development Fund to help address unmet recovery needs in communities experiencing major disasters in calendar years 2021 and 2022
  • Allots $20M for previously authorized water and wastewater infrastructure improvements in Jackson, Mississippi

Technology and Cybersecurity

Funding and other highlights include:

  • Provides $21M for salaries and expenses to operate the Office of National Cyber Director at the White House, which was established in the FY 2021 National Defense Authorization Act
  • Authorizes the Department of the Interior (DOI) with the flexibility to use Working Capital Funds to implement critical enterprise cybersecurity safeguards
  • Extends authorization for the Department of Homeland Security (DHS) and the General Services Administration (GSA) to initiate innovative pilot programs to acquire emerging technology through the duration of this CR

General Provisions

Funding and other provisions include:

  • Allocates $15M in additional funding to the Federal Bureau of Investigation (DOJ) for investigative activities related to Afghan resettlements
  • Cancels $100M from DOD’s Afghanistan Security Forces Fund that would otherwise expire on September 30, 2022
  • Appropriates up to the rate necessary at the Small Business Administration in response to increased demand for general business loans
  • Adds $20M to establish the government-wide service-disabled veteran-owned small business certification program at the Small Business Administration
  • Allots $17M in additional funding to the Indian Health Services, and $1M under Indian Health Facilities, in costs related to staffing and operation of facilities opened, renovated, or expanded in FY 2022 and 2023
  • Supports the Administration for Children and Families Refugee and Entrant Assistance fund (HHS) with an additional $2M until September 30, 2025, for refugee and entrant assistance activities
  • Expands the Substance Abuse and Mental Health Services Administration—Mental Health fund (HHS) with an additional $62M towards suicide lifeline activities and behavioral health crises services
  • Provides an additional $400M to the Social Security Administration to sustain current levels of customer service
  • Extends authorities at the Veterans Administration relating to veterans health care, benefits, homeless assistance, etc.

COVID-19 and Monkeypox

Although the Biden Administration had sought to have more than $30B in funding included in the bill to fund further federal COVID-19 and monkeypox response efforts, Congress chose not to include funding in this CR.

Implications

Other than the increased appropriations related to Ukraine, DOD, disaster relief and a few other select provisions, the most relevant implication to federal contractors is the continuity of government operations, which is no small thing. That said, firms supporting the express provisions in these areas may have some sustained or short-term opportunities under this CR (or longer, if Congress extends the provisions in future appropriations come December.)

Another relevant aspect is that the bill prevents CR funding from being used for new starts and new activities, so this may mean that any solicitations, awards, or program announcements expected between now and December 16 may get pushed to beyond that date. But that also may depend on how an agency defines things. This provision highlights one of the major implications of CRs on agency efforts. They “keep the lights on,” but many priorities and initiatives cannot move forward until final full-year appropriations are passed.

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Fellow GovWin Federal Market Analysis (FMA) analysts Christine Fritsch, Angela Petty and Alex Rossino contributed to this article.