The House of Representatives late Wednesday night passed The Fiscal Responsibility Act by a bipartisan vote of 314 to 117, setting the stage for the federal debt ceiling to be suspended until January 2025.
The bill, H.R. 3746, was supported by a majority of members from both parties (149 to 71 among Republicans, 165 to 46 among Democrats). The bill makes certain cuts in discretionary spending, rescinds unobligated funds and expands work requirements for some federal programs.
The Democrat-controlled Senate is scheduled to consider the bill on Thursday with the goal of sending it to President Joe Biden for his signature before June 5, the date on which the Department of the Treasury has said the U.S. would no longer be able to pay the government’s bills.
In exchange for suspending the debt ceiling until 2025, House Speaker Kevin McCarthy, R-California, negotiated increased work requirements for federal benefits programs, including food stamps (the Supplemental Nutrition Assistance Program) and welfare (Temporary Aid to Needy Families).
The House-passed bill also includes a streamlined permitting process for energy projects and prevents a further pause on student loan repayments past September. It also claws back unspent COVID-related funds and about $20 billion of the $80 billion in additional spending that had been authorized for IRS enforcement efforts.
The Congressional Budget Office, in a May 30 letter to McCarthy about the bill’s impact, projected the bill would reduce federal budget deficits by “about $1.5 trillion over the 2023-2033 period relative to its May 2023 baseline projections.”
Overall, the CBO wrote, “Reductions in projected discretionary outlays would amount to $1.3 trillion over the 2024–2033 period. Mandatory spending would, on net, decrease by $10 billion, and revenues would, on net, decrease by $2 billion over the 2023–2033 period. As a consequence, interest on the public debt would decline by $188 billion.”