TL/DR –
House Speaker Mike Johnson and Senate Majority Leader Chuck Schumer announced an agreement on a “topline” spending level for the U.S. government for the new fiscal year, avoiding a potential shutdown. The deal sets the overall spending level at $1.59 trillion, with $886 billion earmarked for the military and $704 billion for nondefense spending, and will include “key modifications” to reduce nonmilitary spending through a $16 billion offset. Despite the agreement, the threat of a shutdown remains as some parts of the government may run out of funding by the January 19 deadline.
US Government Spending Deal: Steps Taken to Avoid Shutdown
House Speaker Mike Johnson and Senate Majority Leader Chuck Schumer announced a topline spending agreement, a key measure in preventing a US government shutdown. However, the threat remains until the first deadline of Jan. 19, when certain government sections could run out of funds.
The bipartisan agreement paves the way for Congress to maintain crucial funding for American people and avoid a shutdown, Schumer and House Minority Leader Hakeem Jeffries stated.
The agreement sets the spending level at $1.59 trillion for fiscal 2024, based on the bipartisan budget agreement made by President Biden and then-Speaker Kevin McCarthy last year. The disbursement includes $886 billion for military and $704 billion for non-defense expenditures, Johnson informed.
Johnson highlighted key modifications in the agreement to trim nonmilitary spending with a $16 billion offset. This comprises $6.1 billion in unused Covid funds and $10 billion in IRS money from the Inflation Reduction Act.
Johnson indicated in his letter that although the final spending levels may not satisfy everyone, it provides a pathway forward, emphasizing funding towards conservative objectives and maintaining essential policy riders in the House FY24 bills.
After the announcement, Schumer told his caucus it’s a good deal for Democrats and the nation. Schumer and Jeffries said that accounting for an added $69 billion, nondefense discretionary spending will reach $772.7 billion in the new fiscal year.
The allocation of funds still needs to be determined and agreed upon by the Republican-led House and Democratic-controlled Senate. Once established, legislation needs to be written, published, and passed through both chambers.
Rep. Chip Roy, a conservative hard-liner, expressed dissatisfaction with the emerging details on Sunday while campaigning for Republican presidential candidate Ron DeSantis. He objected to the spending level of $1.644 trillion after including nondefense adjustments.
The House Freedom Caucus criticized the deal as worse than expected and a total failure. Conservative hard-liners like Rep. Bob Good and Rep. Matt Gaetz have also threatened a shutdown unless immigration and asylum laws are tightened by the funding deadline.
President Biden commended the agreement and urged Republicans to fulfill their basic responsibility to fund crucial domestic and national security priorities, including his supplemental request.
—
Read More US Economic News