One Percent

The Fiscal Responsibility Act contains a provision that funding for all departments and agencies -- defense and nondefense – would require a one percent across-the-board cut below FY23 levels in each of the next two fiscal years in the event that the FY24 appropriations bills are not enacted by January 1st. The Act was signed into law on June 3 rd and it suspends the limit on federal debt through January 1, 2025, and makes a number of changes that affect federal spending and revenues. The enforcement mechanism of it would not kick in until April 30th, which gives Congress time to either enact the appropriations bills or repeal the provision triggering the one percent cut.