Overview
- A complete primer on the debt limit from the Governing Majority Education Fund is available here: https://governingmajorityeducation.org/u-s-debt-limit-a-policy-primer/.
- The debt limit, or debt ceiling, is the maximum amount of money the federal government can borrow to pay its existing legal obligations.
- The federal government reached the debt limit on January 19, 2023, and the U.S. Department of the Treasury is currently using “extraordinary measures” to prevent a default in the near term.1
- The federal government will default on its debt obligations on June 5, 2023 if Congress does not act to raise the debt limit.2
- On Saturday, May 27, 2023, Speaker of the House Kevin McCarthy (R-CA) and President Joe Biden announced that they had reached an agreement in principle to raise the statutory debt limit.3 This agreement is reflected in the text of H.R. 3746, the Fiscal Responsibility Act of 2023.4
SUMMARY OF THE FISCAL RESPONSIBILITY ACT:
($ in billions) | Defense | Non Defense | Total |
---|---|---|---|
Fiscal Year 2024 | $886.349 | $703.651 | $1,590.000 |
Fiscal Year 2025 | $895.212 | $710.688 | $1,605.900 |
- The Congressional Budget Office (CBO) noted that this legislation will reduce the federal budget deficit by $1.5 trillion for Fiscal Years 2023-2033. 5
- Over the same time period, CBO notes that mandatory spending reforms will save $10 billion and interest on the National Debt would decrease by $188 billion.6
- $9.91 billion from the Department of Health and Human Services’ Public Health and Social Services Emergency Fund;
- $2.24 billion from Department of Transportation Highway Infrastructure Programs;
- $1.74 billion from Department of Transportation Aviation Manufacturing Jobs Protection;
- $1.74 billion from the Department of Health and Human Services’ CDC-wide Activities and Program Supports; and
- $1.47 from the Small Business Administration’s Disaster Loans Program Account.
V. Student Loan Payments – Statutorily terminates Administration’s Covid pandemic-related student loan payment pause.
- Temporary Assistance to Needy Families (TANF) –
- Recalibrates the Caseload Reduction Credit to 2015 TANF levels rather than caseload levels from 2005.
- Establishes a pilot-program for better work and family outcomes for TANF recipients.
- Families receiving less than $35 in TANF benefits are discounted from Work Participation Rates (WPR).
- Requires HHS to collect data from states work outcomes from people on TANF.
- Supplemental Nutrition Assistance Program (SNAP) –
- Expands current time limits and work requirements for able-bodied adults without dependents to individuals up to 54 years old (current law is 18-49 years old).
- Lowers the annual exemption levels for able-bodied adults without dependents not otherwise exempt from 12% to 8% for states. It additionally terminates the ability of states to carry forward unused exemptions from year-to-year.
- Mandates that USDA publish all state waiver requests for the able-bodied adults without dependents requirements.
- Makes some reforms to the National Environmental Policy Act to better streamline and speed up the federal permitting process. Changes include:
- Threshold considerations for agencies assessing whether NEPA applies;
- Agency coordination and review deadlines to speed up and streamline the process;
- Limits what qualifies as a major federal action; and
- Tighter controls to prevent agencies from missing statutory deadlines.
WHAT THEY ARE SAYING ABOUT THE FISCAL RESPONSIBILITY ACT
“We’ve got good news,” Biden said from the White House on Sunday evening. “I spoke with Speaker McCarthy, and we’ve reached a bipartisan agreement that we’re ready to move to the full Congress. And I think it’s a really important step forward. It takes the threat of catastrophic default off the table, protects our hard-earned and historic economic recovery, and the agreement also represents a compromise that means no one got everything they want, but that’s the responsibility of governing.” – Washington Examiner, Wednesday, May 31 (https://www.msn.com/en-us/news/politics/biden-works-to-push-debt-ceiling-deal-over-the-finish-line/ar-AA1bVKFx).
“He said in a statement the deal would stop “out-of-control” spending by Biden as it “forces the Executive Branch to find dollar-for-dollar savings in the government for costly rules and regulations, so that executive overreach is reined in and held accountable.”…“This is going to be transformational, where Congress is literally going to vote to spend less money this year than we spent last year,” McCarthy said earlier.” – NBC News, Sunday, May 28, (https://www.nbcnews.com/politics/congress/biden-mccarthy-complete-debt-ceiling-agreement-sunday-jeffries-tells-d-rcna86191).
“Today’s agreement makes urgent progress toward preserving our nation’s full faith and credit and a much-needed step toward getting its financial house in order,” McConnell said, urging swift passage in the Senate.” – NPR, Monday, May 29 (https://www.npr.org/2023/05/29/1178660890/biden-and-mccarthy-reach-a-deal-to-avoid-default-heres-whats-in-it).
“My red line has already been surpassed,” Ocasio-Cortez said earlier this month. “I mean, where do we start? [No] clean debt ceiling. Work requirements. Cuts to programs. I would never — I would never — vote for that.” – The Hill, Tuesday, May 30 (https://www.yahoo.com/entertainment/ocasio-cortez-says-she-voting-025935133.html).
“1st – the leadership playbook is to line up cheerleading on phone calls to demonstrate ‘unity.’ 2nd, not 95% – I know of more no’s than that already. 3rd – they haven’t been educated yet on what a turd-sandwich this ‘deal’ is. They will be,” Roy tweeted in response to McCarthy’s earlier comment on “Fox News Sunday.” – The Hill, Sunday, May 28 (https://www.msn.com/en-us/news/politics/chip-roy-blasts-biden-mccarthy-debt-ceiling-deal-as-turd-sandwich/ar-AA1bNYVa).
‘“He’s right. There’s not ‘one thing’ for Dems. There are $4 trillion things—a blank check—for Democrats. Plus 87,000 things: new IRS agents to harass Americans. All in exchange for eliminating virtually ALL of the House’s spending cuts,” Cruz wrote in a tweet Sunday.” – Yahoo News, Sunday, May 28 (https://news.yahoo.com/cruz-pans-mccarthy-saying-debt-212353387.html).
“This deal is good for the country in that it prevents a default and subsequent financial meltdown, while also limiting spending,” Sen. Mitt Romney, R-Utah, said in a statement posted on social media Monday. “While I would have preferred to see an agreement that also addressed entitlements, this represents a good-faith bipartisan compromise.” – Fox News, Tuesday, May 30 (https://www.msn.com/en-us/news/other/where-do-moderate-democrats-republicans-stand-on-the-debt-ceiling-deal-as-pivotal-votes-loom/ar-AA1bUo7y).
“I am pleased Speaker McCarthy and his leadership team see the tremendous value in completing the MVP to increase domestic energy production and drive down costs across America and especially in West Virginia. I am proud to have fought for this critical project and to have secured the bipartisan support necessary to get it across the finish line,” he said in a Monday statement. – Fox News, Tuesday, May 30 (https://www.msn.com/en-us/news/other/where-do-moderate-democrats-republicans-stand-on-the-debt-ceiling-deal-as-pivotal-votes-loom/ar-AA1bUo7y).
About The Governing Majority Education Fund
Board of Directors
The Honorable John Faso | The Honorable John Kakto | The Honorable Erik Paulsen
The Honorable Pat Tiberi | The Honorable Mimi Walters