Debt Ceiling Limit Resolved for Time Being

On June 3, President Biden signed the Fiscal Responsibility Act into law. This legislation, which was largely negotiated between the White House and House Speaker Kevin McCarthy (R-CA), would suspend the nation’s debt ceiling until 2025, resolving the issue until after the 2024 Presidential Election. It also contains provisions related to constraining spending over the next two years.

The bill sets new caps on both domestic discretionary spending and defense spending in the coming year (Fiscal Year 2024) and the following year (Fiscal Year 2025). With these top-line levels now set, it’s likely Congress will fully resume the work of crafting appropriations bills during June and July. The agreement also incentivizes appropriators to complete their work before the calendar year ends, as the overall caps will be reduced to 1% below current levels if they do not finish.

The bill contains other provisions, which tighten work requirements for the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program. Unlike what was passed by the House earlier in the year, the final agreement will not impact Medicaid. The bill rescinds unspent COVID-19 funding and redirects funding dedicated to enhancing IRS capacity to other domestic priorities.

The Reeve Foundation is well-positioned given that the Reeve ask for FY24 is that Congress continue PRC funding at current levels. With a freeze on total domestic appropriations, it will be difficult for any program to see an increase in funding since any increase in one program necessitates a decrease in another. Even with top-line levels staying level, it is not a guarantee that Congress will not attempt to reduce PRC funding.

Please contact Gerard Arnum, Grassroots Advocacy Manager, at [email protected] if you would like to learn about the Reeve Foundation’s growing advocacy network.