Sequestration Possible If Congress Does Not Act

As I noted in last month’s column, Congress returned to session in January with aspirations to solve the looming fiscal year 2024 budget crisis. Due to significant differences of opinion between the House and Senate late last year, Congress had elected to extend current funding levels rather than passing a full appropriations bill. The idea at that time was that the extension would give negotiators time to resolve their disputes and pass a long-term funding bill. Unfortunately, when they came back to D.C. last month, we saw that many of those differences—largely whether Congress should significantly reduce domestic discretionary spending—remain in place. As a result, Congress passed another short-term funding package, and the National Endowment for the Arts (NEA) and other federal agencies continue to operate in a state of uncertainty about which approach will ultimately be the chosen path forward.

Also complicating matters for appropriators hoping to get the budget deal done were the extensive deliberations that took place in January over legislation that sought to address immigration issues as well as provide emergency supplemental funding for the wars in Ukraine and the Middle East. Working on those issues is sucking a lot of the oxygen out of any budget talks. As this work continues, we at NASAA want to continue to raise awareness of the fact that, if Congress is not able to find a compromise on the FY2024 budget soon, the NEA and other federal agencies will pay the price—in the form of a one-percent across-the-board spending reduction. This measure, known as sequestration, was included in the agreement Congress passed last year when it agreed to raise the debt limit. That one-percent reduction will be triggered if Congress has not passed a full FY2024 appropriations bill by May 1, a circumstance that seems more plausible with each passing day.

The delay in resolving funding issues impacts our work preparing for the FY2025 budget cycle. Under normal circumstances, the President’s budget proposal to Congress would be public by now, leading to a furious push by advocates, including NASAA, to urge support of funding for the NEA. However, with 2024’s spending package still up in the air, that work is understandably put on hold. So we continue to meet with members of Congress and their staff to thank them for their steadfast support, and be available should any questions arise.

For you as an arts advocate, while it is too early to talk about the next budget proposal, it is completely appropriate, and helpful to congressional staff, for you to keep them in the loop about any developments at your agency that impact your operations. Once the funding process for FY2024 is resolved, Congress will have to pivot quickly to FY2025, and we will not have the usual amount of time to make our case. Remember that in addition to a tighter time frame due to the budget standoff, this is also an election year, which means members of Congress will spend less time in Washington and more time on the campaign trail.

Therefore, it would be timely and helpful for you to keep your representatives apprised about what you are working on and the general state of your agency. If you have any questions about how to have these conversations in this difficult environment, don’t hesitate to reach out.