KEY VOTE: “NO” on the debt ceiling suspension agreement (H.R. 3746, the Fiscal Responsibility Act)

Americans are currently feeling the compounding effects of years of reckless fiscal policy through high inflation and sluggish economic growth. Any increase in the debt ceiling needs to address these problems in a substantive way, as the current path is unsustainable. The Fiscal Responsibility Act fails to meet this standard, as it falls short of the demands that have been outlined by Heritage Action since January: cap and cut overall spending to FY 22 levels, include pro-growth policies that fully offset a transparent dollar amount increase in the debt ceiling, and adequately address the trajectory of federal spending.

As a long-standing policy position, we have consistently called for dollar-for-dollar cuts and reforms commensurate with any debt ceiling increases. This bill does not do that. This bill suspends the debt ceiling until 2025, enabling President Biden and a divided Congress to generate an estimated $4 trillion in new federal debt.

This bill does not do enough to reduce spending. Best estimates, which rely on waivable provisions in the bill, show that H.R. 3746 would only reduce spending against the CBO baseline by $2.1 trillion. Further, the pro-growth policies, rescissions, and administrative sequestration provisions would likely only result in small scale changes in economic output and federal deficits.

Together, the estimated $2.1 trillion spending reduction and vastly insufficient growth and rescission measures do not justify an estimated $4 trillion in new federal debt. We called for commensurate spending cuts related to any debt limit increase, and this was not adhered to in the legislation.

As written, the bill would cut non-VA, non-defense discretionary spending by $40 billion, amounting to FY 2022 funding levels. However, it would maintain VA funding and increase defense funding by $28 billion—leaving the total, true cut at only roughly $12 billion for FY 24 with a potential for increased spending in the out years of the agreement.

While the bill would rescind roughly $30 billion in COVID emergency relief funding and IRS funds, it is not clear that those “savings” would be realized by Americans. This is, in part, because the bill appropriates $22 billion of those rescissions to a single fund at the Department of Commerce intended for congressional direction, and it is not ensured to be used toward deficit reduction.

We commend the victories achieved through honest negotiations by Speaker McCarthy with the White House, such as environmental permitting reform that will help unlock pent up construction demand and commonsense work requirements for the SNAP and TANF programs. We also acknowledge the breaking of a long-held Democrat demand for dollar-for-dollar parity with defense and non-defense spending. Unfortunately, these victories are smaller and less impactful than all that is needed to grow the economy and right-size the fiscal house of this nation.

Heritage Action, on behalf of our grassroots members, remains concerned about the fiscal trajectory of the country and the burdens it places on each and every American taxpayer. This deal does not meet the moment, and it does not address the root problems that have led to nearly $32 trillion in national debt. As members of Congress continue the fight to rein in Washington’s spending addiction and prevent the country’s fiscal ruin, we remain committed to finding solutions to once and for all bend the spending curve down.