If Congress does not pass the 12 appropriation bills this year and next year by Dec. “In 2025, it increases the nondefense spending levels and the defense spending levels by 1%.”

“It keeps nondefense spending roughly flat with the 2023 levels in 2024, when you factor in agreed-upon appropriations adjustments,” a White House official said in a May 28 background briefing on the agreement. (The term “overseas contingency operations” refers to a defense budget line item.)Īfter factoring in those and other adjustments, CBO said it “projects that total discretionary funding under the bill would amount to $1.795 trillion in 2024 and $1.818 trillion in 2025.” For fiscal year 2024, that would be a total reduction of $31.2 billion in budget authority compared with this year. For example, “funding designated as an emergency requirement or for overseas contingency operations would not be constrained, and certain other funding would not be subject to the caps,” including funding for the 21st Century Cures Act and the Harbor Maintenance Trust Fund. However, as the CBO explained, not all discretionary spending would be subject to the funding limits. The overall cap would rise to $1.606 trillion in fiscal year 2025 - $895 billion for defense and $711 billion for nondefense - for an overall increase of 1% compared with FY2024. Defense spending would increase $28 billion, or 3.3%, while nondefense spending would be cut by $40 billion, or 5.4%, the committee summary said. That would represent an overall cut of $12 billion, or about 1%, compared with the current budget, according to a House Budget Committee summary. Under the bill, there would be a $1.59 trillion discretionary spending cap in fiscal year 2024 - $886 billion for defense and $704 billion for nondefense. The legislation would impose limits on certain defense and nondefense discretionary spending - which is the funding Congress appropriates each year for federal agencies and programs. But the reduction could be $234 billion or as high as $1.8 trillion, depending on whether Congress enforces discretionary spending caps in the last eight years of that budget window. The Penn Wharton Budget Model estimated that the legislation would reduce federal spending, not including interest spending, by about $1.3 trillion over 10 years. However, there are mandatory caps for only two years caps in the other years are nonbinding and subject to the congressional appropriations process. * CBO assumes the proposed caps will be adhered to over 10 years. The bipartisan deal would reduce deficits by $1.5 trillion over 11 years, but that also assumes that Congress follows through on nonbinding spending caps after 2025, CBO said. House Republicans had passed legislation in late April that would have reduced projected budget deficits by $4.8 trillion over 11 years, according to the nonpartisan Congressional Budget Office. The legislation is a compromise between Republicans, who wanted larger spending reductions, and the White House, which wanted no spending cuts in a debt limit bill. We’ll explain the main provisions of the bill that would cut, and increase, federal spending. Update, June 4: The president signed the bill on June 3. The House passed the bill, called the Fiscal Responsibility Act, by a vote of 314 to 117 on May 31, and the Senate approved it a day later 63 to 36. The deal also would come just days before June 5, the date when the federal government wouldn’t be able to pay its bills without an increase in or suspension of the nation’s borrowing cap, Treasury has said. 1, 2025, at which point the Treasury Department would reset the limit at whatever amount the government’s spending would be then. The deal would suspend the debt limit until Jan. House Speaker Kevin McCarthy and President Joe Biden brokered a two-year agreement to suspend the debt ceiling and got quick congressional approval before the federal government runs out of money.

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