Federal Relations Update: Debt Ceiling Raised

Legislation to lift the nation’s debt ceiling was passed by the U.S. Congress and signed into law by President Biden. This deal lifts the debt limit through January 1, 2025, freezes non-defense spending for fiscal year 2024 (FY24) at current levels while allowing for a three percent defense spending increase, and allows a one percent increase in FY25 for both defense and non-defense spending. Cuts previously proposed back to FY22 levels have been avoided.

Additionally, this legislation prohibits the Department of Education from extending the student loan repayment pause beyond August, rescinds $1.4 billion in IRS funding, extends work requirements on SNAP recipients aged 50-54, and rescinds $28 billion in unobligated COVID-19 emergency funding. Rescissions include: $391 million from the Education Stabilization Fund, $46 million from the Institute of Education Sciences, $15 million from the Broadband Connectivity Fund, $8.6 million from the Student Aid Administration, $190,000 from the National Endowment for the Humanities, and $20,000 from Educational and Cultural Exchange Programs at the Department of State. The unobligated funds being rescinded are funds not yet allocated by the federal government, not unexpended funds already received by states or other grantees. Read the full text of the 100-page “Fiscal Responsibility Act of 2023”.

With this end to debt limit negotiations, congressional committees will restart their work in earnest – particularly, drafting FY24 spending legislation and the National Defense Authorization Act. The full impact of the agreed upon top-line spending levels on individual accounts important to campus will not be known for several months. The Office of Federal Relations will continue to monitor developments and report them to you regularly via our Research Update and the Government Relations Update. If you have any questions or concerns, please don’t hesitate to contact the Office of Federal Relations.

Updated 6/5/23