HR 3746: Fiscal Responsibility Act of 2023

HR 3746 in plain English: The Fiscal Responsibility Act of 2023 raises the federal debt limit and sets new caps on discretionary spending for fiscal years 2024 through 2029, enforced by automatic spending cuts if exceeded. It also rescinds unobligated federal funds from prior legislation, expands work requirements for certain federal assistance programs, and modifies federal budget process rules.

Stated purpose

To allow the federal government to borrow more money by raising the debt ceiling, while also setting new limits on government spending and making related changes to the federal budget process.

Key points

• Sets defense spending caps of $886.3 billion (FY2024) and $895.2 billion (FY2025), and nondefense caps of $703.7 billion (FY2024) and $710.7 billion (FY2025)
• Sets total discretionary spending limits from $1.62 trillion (FY2026) rising to $1.67 trillion (FY2029)
• Provides $20.3 billion (available FY2024–2028) and $24.5 billion (available FY2025–2029) for the VA Cost of War Toxic Exposures Fund
• Rescinds unobligated funds from prior laws, including $1.39 billion from the Inflation Reduction Act and $1 billion from another prior appropriation
• Expands work requirements for recipients of certain federal assistance programs

Arguments supporters make

• Raising the debt ceiling while attaching real spending limits shows fiscal discipline and begins to slow the growth of the national debt.
• Clawing back unspent funds and capping future spending protects taxpayers from wasteful government expenditure.
• Work requirements for able-bodied adults in assistance programs encourage self-sufficiency and help ensure safety-net dollars go to those most in need.

Arguments opponents make

• Spending caps could force cuts to programs that serve vulnerable people, and work requirements may cause low-income individuals to lose benefits they genuinely need.
• Using the debt ceiling as leverage for spending demands risks the government's ability to pay obligations it already made, potentially threatening economic stability.
• Ending the student loan payment pause adds sudden financial pressure on millions of borrowers who arranged their budgets around the suspension still being in place.

Tradeoffs

Averting a potential government default requires raising the debt ceiling, but the attached spending limits and rescissions reduce funding available for federal programs — the law trades short-term financial stability for constraints on future government spending, with different groups bearing different shares of those constraints.

Current status in Congress: Became law.

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