Government affairs

Following a contentious period of negotiations between President Biden, Speaker Kevin McCarthy (R-CA), Minority Leader Hakeem Jeffries (D-NY), Majority Leader Chuck Schumer (D-NY), and Minority Leader Mitch McConnell (R-KY), a deal to avert a default on the nation’s debt was agreed upon and signed into law just in time for the nation to avoid default on June 5.

The Fiscal Responsibility Act (Public Law 118-5) suspends the debt limit through Jan. 1, 2025, and imposes federal spending caps for the next two years. In Fiscal Year 2024, spending for non-defense agencies will essentially remain flat, except for the Department of Veterans Affairs. Increases in funding will be capped at one percent for defense and non-defense agencies in Fiscal Year 2025. The deal also includes a stipulation to help avoid government shutdowns in 2024 and 2025. If by Jan. 1, 2024, Congress has not approved all 12 appropriations bills, a continuing resolution will be enacted that cuts spending for both defense and non-defense agencies by 1 percent until all 12 appropriations bills are approved. This provision will be in effect next year and in 2025. The Congressional Budget Office estimates the law would reduce the deficit by $1.5 trillion over a decade.

The law rescinds $28 billion of unspent Covid-19 relief funds. It redirects $20 billion of the $80 billion in funding for the Internal Revenue System included in the Inflation Reduction Act to other nondefense spending. It expands work requirements for the Supplemental Nutrition Assistance Program (SNAP) by 2025 to those ages 18-54. The current SNAP work requirements affect those who are 18-49. Additionally, it cancels extensions for federal student loan payments suspensions 60 days after June 30. It also includes permitting changes that would streamline environmental review processes.

The House vote on May 31 came after weeks of bipartisan negotiations between Congressional leaders and the administration and a procedural vote from the House Rules Committee. The bill advanced out of the committee with a 7-6 vote, with all four Democrats and two Republicans voting against the bill.

Although it was a bipartisan bill, lawmakers from both sides of the aisle raised concerns. 71 House Republicans voted against the bill, 26 of whom are members of the Freedom Caucus. Reps. Jim Jordan (R-OH), Marjorie Taylor Greene (R-GA), and Mike Johnson (R-LA) were among eight of the Freedom Caucus members who ultimately supported the bill. The Republican “no” voters cited concerns that the bill did not do enough to cut government spending. Even with 71 opposition votes, a majority of Republican members, 149, voted to pass the bill.    

On the Democratic side, 46 House members voted against the bill, 40 of whom are Congressional Progressive Caucus members. Many of the House Democrats who voted no cited concerns about new work requirements for SNAP, rescinding IRS funding, permitting provisions, and the nondefense spending caps for federal programs.

Ultimately, the bill passed the House bipartisanly, with more Democratic members (165) voting in favor of the bill than the Republican majority (149).

Following House passage, the next day on June 1, the Senate passed the measure in a 63-36 vote. During Senate consideration, 11 amendments were introduced, all of which failed, before the final vote. 44 Democratic senators voted in favor of the bill, while four Democratic senators, Sens. John Fetterman (D-PA), Ed Markey (D-MA), Jeff Merkley (D-OR), and Elizabeth Warren (D-MA), voted against it. A majority of Republican senators voted against the bill. 31 Republican senators opposed the bill while 17 GOP senators, including Minority Leader McConnell and Minority Whip John Thune (R-SD), voted for its passage.