NWC NEWS ALERT (MAY 30, 2023)

CONGRESSIONAL LEADERS AND WHITE HOUSE COME TO AGREEMENT ON DEBT CEILING—VOTE THIS WEEK

 After weeks and months of will they, won’t they, the White House and Congressional leaders announced a debt ceiling agreement over the weekend. Called the Fiscal Responsibility Act of 2023 (H.R. 3746), the measure would suspend the federal debt limit until Jan. 1, 2025. Additionally, the bill puts limits on nondiscretionary funding, among other elements including some permit streamlining changes. According to a preliminary CBO score, there is $2.1 trillion in savings over six years of the agreement (two years enforced/four years can be waived under certain conditions). However, there are already rumblings on both sides of the aisle that H.R. 3746 doesn’t go far enough or likewise goes too far.

Highlights of the Fiscal Responsibility Act of 2023:

  • Suspends the debt ceiling until Jan. 1, 2025, U.S. Treasury would likely be able to use “extraordinary measures” to extend beyond that date.
  • In FY2024, the measure limits military spending to $886 billion and discretionary spending to $704 billion. In FY2025, the figures would increase to $895 billion and $711 billion respectively (Note: FY2023 included $858 billion for defense and $772.5 billion for non-defense discretionary programs)
  • Encourages Congress to complete annual appropriations bills by Jan 1, otherwise the measure includes a 1 percent cut to both discretionary and non-discretionary programs.
  • Rescinds approximately $28 billion in unspent COVID-19 funds.
  • Modifies the National Environmental Policy Act—sets a lead federal agency for environmental reviews; the lead agency would have a one year deadline for environmental impact assessments for new energy projects and a two-year deadline for environmental impact statements (although the timelines may be extended with approval from the applicant. Additionally, if deadlines are not met, the applicant can challenge in the courts); the measure also expands FAST-41, a federal program that helps to expediate larger infrastructure projects; and adopts a list of categorical exclusions for NEPA. According to Punchbowl News, the minority for the House Natural Resources Committee put out a fact sheet expressing concerns on the NEPA provisions).
  • Does not include a provision to increase permitting of large-scale transmission projects, instead it includes a study to look at current challenges and opportunities.

A vote is expected as early as tomorrow in the House with the Senate following suit. We are already hearing that Senators may force amendment votes on certain provisions in the bill which may delay final approval. According to the U.S. Treasury Secretary, the U.S. will hit their debt ceiling by June 5, less than a week from now.