House Passes Bill to Cut Spending, Suspend Debt Limit

After weeks of negotiations and harsh criticism from politicians on the right and left, the House passed the Fiscal Responsibility Act of 2023 on a bipartisan basis late last evening. The bill suspends the debt limit until after next year’s elections, a Democratic priority, and sets budget caps that will require substantial cuts to future government spending, a Republican priority. Spending for defense and veterans medical care are exempt. The impact on specific non-defense agencies like NASA will be determined later by congressional appropriators. The Senate will vote on the bill in coming days.

The budget caps will hold total non-defense government spending at its FY2023 level with only a 1 percent increase in FY2025. The exception is veterans medical care which, like defense spending, is exempted.

Using NASA as an example, its FY2023 budget is $25.4 billion and President Biden is requesting a 7.1 percent increase for FY2024, $27.2 billion, which basically keeps pace with inflation.

The legislation (H.R. 3746) does not necessarily mean that NASA will be held at $25.4 billion. The House and Senate Appropriations Committees will allocate the total amount of available non-defense spending to their subcommittees and the subcommittees will recommend funding levels for the agencies under their jurisdiction as they usually do.

How an individual agency like NASA will fare depends on the choices made by the relevant subcommittee, Commerce-Justice-Science in NASA’s case. CJS also has jurisdiction over the National Science Foundation, the Department of Commerce (including NOAA), the Department of Justice, and several other smaller agencies or offices like the White House National Space Council.

The CJS subcommittee members will recommend who gets what. The legislation will go through the regular process of markups and floor action. As evidenced at hearings earlier this year, both the House and Senate CJS subcommittees are strong NASA supporters so it may fare better than others, but only time will tell.

Unlike the oft-cited sequestration cuts in 2013, these budget caps do not require across-the-board cuts where every agency and program is cut by the same amount regardless of merit. Republicans and Democrats alike condemned the damaging effects of the 2013 cuts, especially on defense, and avoided them in subsequent years.

However, one portion of the bill that has not gotten much attention would, in fact, impose across-the-board cuts if Congress does not enact all 12 appropriations bills by January 1, 2024.

When appropriations bills are not passed in a timely manner, Congress passes Continuing Resolutions (CRs) to temporarily keep the government operating at current spending levels. U.S. government fiscal years begin on October 1 and it is difficult to remember the last time a CR wasn’t needed for a few weeks or months. But often they are finished by the end of the year, usually bundled together into a single “omnibus” appropriations bill.

Sometimes they’re not, though, especially in a divided Congress where different parties control the House and Senate as is the case today.

As an incentive to get them done by December 31, the Fiscal Responsibility Act includes Sec. 102. If a CR is in effect on January 1, 2024, both defense and non-defense spending will be subject to a one-percent cut from current spending. Those would be across-the-board cuts. Ten years have passed since the 2013 sequestration. Although the point of Sec. 102 is get Congress to pass all the appropriations bills and avoid such a dire outcome, many members of Congress are new since then and may not appreciate what could happen.

All of that is down the line. First the Senate has to pass this bill. It could take a couple of days or as long as a week — past the June 5 deadline when the Treasury says it will run out of money — if even one Senator insists on using every procedural roadblock available to delay the final vote.

Although many House Republicans opposed the measure and some tried to stop it even from coming before the House for consideration, in the end the vote was 314-117, with 149 Republicans and 165 Democrats in favor, and 71 Republicans and 46 Democrats opposed (two from each party did not vote).

Assuming it passes the Senate, President Biden — who negotiated the deal with House Speaker Kevin McCarthy — will sign it. Then the amount of available money will be allocated to the various appropriations subcommittees and the usual process of writing and marking up the 12 FY2024 appropriations bills will get underway. How NASA and the other departments and agencies will fare is unknowable at this point. All that is known is that House Republicans have been somewhat successful in their efforts to reduce government spending, if not by as much as ultra-conservatives wanted, and Democrats have succeeded in avoiding a default on the national debt and will not have to deal with the issue again until after the 2024 elections, even though they had to agree to provisions like changed work requirements to receive food assistance that progressives oppose. In short, the Fiscal Responsibility Act is a compromise, which is what negotiations are all about.