Debt Limit Deal Struck, Spending Caps Likely for FY 2024-25
Over the Memorial Day weekend, the White House and House Republican leadership agreed to a budget deal that would keep the U.S. from defaulting on its debt, at least until after the 2024 elections. The agreement would suspend the U.S. debt limit until January 2025. However, as Republicans have been demanding, the suspension would come with limits—as well as some cuts—to discretionary spending over the next two years.
Should it make it through the House and Senate, the deal would set caps on discretionary spending at levels roughly 5 percent or $40 billion below current levels. However, by reclaiming unobligated COVID relief spending and other emergency funding appropriated over the last few years and reallocating it to discretionary accounts, the caps are said to have less of an impact. All told, the White House estimates that nondefense, non-veterans-related spending for FY 2024 would come in $1 billion below this year’s (FY 2023) level. For FY 2025, the deal would limit growth to 1 percent for discretionary spending. If enacted, these numbers promise to make the next few years very difficult for discretionary programs, including for research funding.
Lawmakers are back in Washington this week to consider the bill, with the House eyeing a vote on Wednesday. They will try to pass it by June 5, the date on which the White House Office of Management and Budget says the U.S. may default on its obligations.
The White House and House Republicans have issued separate factsheets on the deal. In addition, COSSA signed-on to a letter with hundreds of other organizations arguing against cuts to nondefense discretionary spending.
This is a developing story.