President Biden's fiscal 2025 budget request generally calls for small increases to funds for agencies, but Congress may not approve a full budget before the end of the year. PM Images / Getty Images
Agencies expect small fiscal 2025 funding increases — at best
The Professional Services Council’s federal budget forecast predicts that fiscal 2025 appropriations will edge up slightly at best or face potential stinging GOP-led cuts.
While Congress has yet to pass appropriations bills to fund federal agencies for the current fiscal year, the Professional Services Council expects they will look similar to President Joe Biden’s fiscal 2025 budget request.
That budget request, which included $1.67 trillion in discretionary spending, largely tracks with caps in the 2023 Fiscal Responsibility Act that limit growth in funding for defense and non-defense agencies to 1% for fiscal 2025.
“History has shown that regardless of how much machinations and churn there is in the budget process, it generally settles out to about what the president's budget is when it's submitted,” said Lou Crenshaw, a volunteer for PSC’s Vision Federal Market Forecast Conference, at a press briefing on Monday.
However, the trade association for federal contractors acknowledged that with Republicans soon to be in control of the White House and Congress, fiscal 2025 appropriations could look more to the GOP’s liking, including a potential 10% cut to non-defense agency spending.
And Crenshaw presented a potential bipartisan scenario that exempts the FRA caps and in which agencies receive 2.5% spending increases compared to the fiscal 2025 budget request.
“I guess you’d call that an Oprah budget. ‘You get money, you get money, you get money.’ I think that's probably less likely now,” Crenshaw said.
Allies of President-elect Donald Trump have discussed pursuing extensive cuts to agencies and their employees.
Stephanie Sanok Kostro, PSC’s executive vice president for policy, said during the briefing that federal agency leaders who were interviewed by volunteers for PSC’s conference are not optimistic when it comes to funding.
“They tend to believe that agency spending will be flat or cut in civilian areas," Kostro said. In particular, she pointed to reduced spending at the Health and Human Services Department due to the waning COVID-19 pandemic.
Fiscal 2025 began on Oct. 1 without full-year appropriations. Congress averted a government shutdown by passing a continuing resolution to fund agencies through Dec. 20. In order to avoid a shutdown next month, lawmakers will either need to approve fiscal 2025 spending measures or pass another continuing resolution.
Crenshaw predicted that Congress will not wrap up fiscal 2025 appropriations before March and that lawmakers will need to pass supplemental funding measures to address the wars in Israel and Ukraine as well as border security.