Yesterday, President Biden signed into law the the Fiscal Responsibility Act of 2023, legislation to raise the nation's $31.4 trillion debt ceiling through January 2025 in exchange for spending cuts and deficit reduction measures.
This culminates tense negotiations that began in earnest several weeks ago following the passage of the House Republicans' Limit, Save, Grow Act, with the final agreement passed just days before tomorrow's June 5 deadline set by U.S. Treasury Secretary Janet Yellen of when the government would no longer be able to meet all financial obligations (the debt ceiling had officially been reached in January, but the Treasury Department implemented "extraordinary measures" to avert a default since that time).
The legislation was brokered between the White House and House Republicans, with the House passing the bill on Wednesday by a vote of 314-117 (71 Republicans and 46 Democrats voted in opposition). The Senate followed suit on Thursday evening, voting 63-36 to pass the bill, after voting down 11 amendments to the bill (31 Senate Republicans and 5 Senate Democrats voted against the bill).
The deal sets non-defense discretionary spending effectively unchanged for 2024 and to increase by only 1% in 2025. Congress would also have to pass all 12 of its annual appropriations bills by the end of January or face a stopgap funding patch that would cut spending by 1% across the board. The deal also rescinds nearly $28 billion in unspent COVID-19 relief funding, of an estimated $80 billion in remaining unobligated funds. However, it does not impact Medicare, Medicaid, or Veterans funding, and it does not repeal or rescind any portions of the Inflation Reduction Act (IRA), which includes numerous tax credits and other incentives for energy efficiency for which senior living communities may be eligible.
Ultimately, it represents a compromise from the Limit, Save, Grow Act of 2023, which narrowly passed the House in April on a 217-215 vote. That legislation called for raising the debt limit by an additional $1.5 trillion or suspend it through March 31, 2024. It would have also capped fiscal year 2024 discretionary spending at $1.47 trillion (representing an 8% cut from this year), along with rescinding unspent COVID-19 relief funds, repealing numerous provisions of the IRA, expanding Medicaid work requirements, and preventing the cancellation of student loans.
