Senate Majority Leader Chuck Schumer, D-N.Y., today pledged to waste little time in Senate consideration of the Fiscal Responsibility Act of 2023 bill approved by the House on Wednesday evening.
The legislation would increase the national debt limit through early 2025 and cap Federal non-defense spending in fiscal year 2024 close to FY2023 levels, while limiting non-defense spending increases to one percent in FY2025.
The bill passed the House easily by a vote of 314 to 117, and with the broad bipartisan support of 165 House Democrats and 149 House Republicans.
“Time is a luxury the Senate does not have” in the face of the U.S. hitting its debt limit early next week, Sen. Schumer said today. “Any needless delay or any last-minute holdups would be an unnecessary and even dangerous risk.”
The bill has the support of leadership from both sides of the aisle, with Senate Minority Leader Mitch McConnell, R-Ky., saying late Wednesday: “Tonight’s passage of the Fiscal Responsibility Act is an important step in the right direction. Now, it’s the Senate’s turn to pass this agreement without delay.”
President Biden on Wednesday night called the House approval “a critical step forward to prevent a first-ever default and protect our country’s hard-earned and historic economic recovery.” He said the legislation represents “a bipartisan compromise. Neither side got everything it wanted. That’s the responsibility of governing.”
“I have been clear that the only path forward is a bipartisan compromise that can earn the support of both parties,” President Biden said. “This agreement meets that test. I urge the Senate to pass it as quickly as possible so that I can sign it into law, and our country can continue building the strongest economy in the world.”
Impact of the Legislation
According to figures released earlier this week by the White House and House Speaker Kevin McCarthy, R-Calif., the debt ceiling deal would leave the Federal civilian side of the government with a roughly flat discretionary spending budget for fiscal year 2024, compared to the FY2023 level of about $772 billion. The Biden administration’s FY2024 budget proposal released earlier this year – considered a wish list more so than a hard expectation – envisioned a seven percent year-over-year non-defense spending increase, to $841 billion.
The legislation also would limit increases in non-defense Federal discretionary spending to one percent in FY2025.
The agreement offers a rosier scenario for defense spending in FY2024, permitting an increase of about 3.3 percent, to $886 billion, according to text of the Fiscal Responsibility Act. That total would encompass national defense spending including for the Defense Department, and national security programs operated by the Department of Energy.
On the Federal agency front, the only agency making headline news in the debt ceiling agreement’s announcement is the Internal Revenue Service (IRS), which is due to lose $20 billion from the ten-year $80 billion funding boost that the agency received IRS last year to pursue modernization of the agency’s operations – including IT functions.
The debt ceiling legislation also features clawbacks of previous funding for the Cybersecurity and Infrastructure Security Agency (CISA) received through the 2021 American Rescue Plan, and the General Services Administration’s Federal Citizen Services Fund received through the 2020 CARES Act. The dollar amount of those clawbacks is unclear, with at least one source telling MeriTalk that the money involved in at least one of them may not be substantial.
Federal IT experts told MeriTalk this week that it’s still too early to figure whether the Biden administration will opt to trim IT and security-related budget accounts for FY2024 and FY2025, but also strongly urged that agencies get proper funding to continue their momentum in those areas.
