On June 3, 2023, President Biden signed the Fiscal Responsibility Act (H.R. 3476) into law, suspending the debt ceiling until 2025 and setting total defense and non-defense funding levels for Fiscal Year (FY) 2024 and FY 2025. While the agreement was critical to avoid defaulting on the US Government’s debt and uncertainty around federal funding to University grant and contract holders and student loan recipients, the caps on funding included in the deal could have significant impacts on our university community.
For FY 2024, the deal set non-defense spending, which includes federal programs such as student aid and scientific research, roughly flat with current levels. Under the agreement, spending on non-defense programs could increase by just 1% in FY 2025. This does not affect mandatory programs such as Medicare and Social Security. For FY 2024 defense spending, the deal would allow for a 3.3% increase in spending from current levels. Spending on defense programs could increase by 1% in FY 2025. Congress is already in discussions about passing an emergency supplemental spending bill to direct additional funding to the DoD beyond these caps.
The deal does not stipulate that all non-defense programs will remain level-funded in FY 2024 and all defense programs will increase by 3.3% in FY 2024. It would only set the total funding level for all defense programs and all non-defense programs in FY 2024 and FY 2025. The House and Senate will work within these funding caps to negotiate funding for individual programs such as the National Science Foundation (NSF) and Department of Defense Science and Technology (S&T) programs, among others.