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June 2, 2023
2023-0989

Senate clears Fiscal Responsibility Act, 63-36

Agreement lifts debt limit through 2024; includes two-year spending caps, rescissions

By a vote of 63-36, the Senate on June 1 cleared for President Biden's signature the Fiscal Responsibility Act (HR 3746), a bipartisan agreement between the White House and House Speaker Kevin McCarthy (R-CA) to suspend the debt ceiling through 2024, a handful of days before the June 5 "X-date" that Treasury Secretary Janet Yellen has cited as the day the government would be unable to pay all of its debts. The House passed the bill, 314-117, on Wednesday. The White House said the president would sign the bill as soon as possible.

  • 17 Republicans voted for the bill: Sens. Boozman (AR), Capito (WV), Collins (ME), Cornyn (TX), Cramer (ND), Ernst (IA), Grassley (IA), Hoeven (ND), McConnell (KY), Moran (KS), Mullin (OK), Murkowski (AK), Romney (UT), Rounds (SD), Thune (SD), Tillis (NC) and Young (IN).
  • All but four Democrats supported the bill: Sens. Fetterman (PA), Warren (MA), Markey (MA) and Merkley (OR). Sen. Sanders (I-VT) also voted against.

The bill suspends the statutory debt ceiling through January 1, 2025 and includes curbs on federal spending for two years as well as claw-backs of Internal Revenue Service (IRS) and COVID-related funding. The bill increases some work requirements on government benefits and establishes an "Administrative PayGo" requirement on agencies for two years. Among the energy provisions, the federal permitting process for projects would be streamlined; the 2015 FAST Act would be expanded to include energy storage projects; and approval of the Mountain Valley Pipeline in West Virginia and Virginia would be expedited.

To address Republican concerns that the bill restricted military spending, Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) released a joint statement on Thursday saying the bill "does nothing to limit the Senate's ability to appropriate emergency supplemental funds to ensure our military capabilities are sufficient to deter China, Russia, and our other adversaries."

Washington Council Ernst & Young described several of the bill's provisions in detail in an Alert on House passage of the bill on May 31, available here.

Additional information is also available in the attached Tax Alert.

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For additional information concerning this Alert, please contact:
 
Washington Council Ernst & Young
   •  Any member of the group at (202) 293-7474.

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Fiscal Responsibility Act

 

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