1. Government Shutdown Begins After Congress Fails to Pass Short-Term CR

As a midnight deadline to fund the government came and went, Congress failed to approve a fourth Continuing Resolution (CR) that would have once again extended FY17 funding levels – triggering a government shutdown. The last government shutdown in October 2013 lasted for 16 days. Congress plans to work through the weekend on an agreement to end the shutdown, which could come as early as Monday.

The shutdown is not expected to have an immediate or significant impact on programs funded through the International Affairs Budget. This is due to the fact that many operations and programs are funded by multi-year or no-year (indefinite) appropriations and would not be immediately impacted by a lapse in funding as long as existing funds remain available. However, the consequences of a prolonged shutdown could be more severe. More details on the potential effects of a shutdown can be found on USGLC’s blog.

2. Budget Deal Lifting Spending Caps Remains Elusive

With disagreements over immigration and health care still unresolved, Congressional leaders have been unable to reach a budget deal that lifts the caps on defense and non-defense discretionary spending. Congress has been funding the government through a series of short-term CRs since the 2018 fiscal year began on October 1. The lack of a budget deal, now compounded by the government shutdown, has prevented the House and Senate Appropriations Committees from finalizing their FY18 spending bills.

As mentioned previously, a budget deal that raises the non-defense discretionary spending cap is critical to ensure sufficient funding for the International Affairs Budget in FY18.

At an AEI event this week, Senate State-Foreign Operations Appropriations Chairman Lindsey Graham (R-SC) struck an optimistic tone saying, “[W]ithout soft power, we’re doomed to lose, and this cutting the State Department’s budget was really crazy. And I’m in charge of that budget, and we’ve restored the 2017 funding, and we’re gonna restore the 2018 funding.”

The Administration is expected to release its FY19 budget request early next month, but with Congress still focused on FY18 spending bills the FY19 appropriations process may get off to a late start.

3. House Approves AGOA and MCA Modernization Act

On Wednesday, the House passed the African Growth and Opportunity Act and Millennium Challenge Act Modernization Act, which would make improvements to both laws. The bill – introduced by House Foreign Affairs Committee Chairman Ed Royce (R-CA), Ranking Member Eliot Engel (D-NY), and Reps. Chris Smith (R-NJ) and Karen Bass (D-CA) – seeks to make the African Growth and Opportunity Act (AGOA) more transparent by creating a public website, among other measures. It also aims to strengthen the Millennium Challenge Act (MCA) by permitting concurrent compacts for eligible countries. The bill now advances to the Senate where a companion measure has been introduced by Senators Ben Cardin (D-MD), Johnny Isakson (R-GA), and Chris Coons (D-DE).