How The Fiscal Responsibility Act Impacts Appropriations

On Saturday, June 3, President Biden signed into law the Fiscal Responsibility Act of 2023 (H.R. 3746; the "Act"). In addition to suspending the debt limit through January 1, 2025, the Act implements caps on both non-defense and defense discretionary spending for Fiscal Year (FY) 2024 and FY2025, and caps on total discretionary spending for FY26 through FY29. Amounts are summarized in Table 1 below.

For FY24, non-defense funding is capped at $703.7 billion, $40.2 billion less than the amount Congress appropriated for the current fiscal year, and defense funding will increase by $28 billion to $886.3 billion, approximately 3%. Caps on both discretionary spending categories will then increase by 1% in FY25 unless certain conditions are triggered, as discussed below.