Debt Deal Excludes Most Harmful Provisions

June 3, 2023

President Biden and Republican congressional leaders have reached an agreement to increase the nation's debt limit. The legislation to implement the agreement, the Fiscal Responsibility Act (H.R. 3746), which President Biden has signed, includes provisions that could impact ASHA members and those you serve, primarily by capping spending on domestic programs in the short-term and instituting spending targets in the long-term. The good news is that the bill does not include provisions ASHA lobbied against [PDF] that could have had a far more harmful impact.

Provisions of interest included:

• Debt Limit: Suspends the debt limit through January 1, 2025. This means the federal government will continue to be able to borrow and pay its bills, including those for provider claims and other federal health and education benefits.
• Spending: Keeps nondefense discretionary spending (the funding Congress controls on an annual basis for health, education, and other federal programs) for 2024 roughly equivalent to 2023 levels and includes a spending cap for 2025 that would limit spending on these programs slightly above the newly established level for 2024. The bill also seeks to limit topline federal spending by 1% over the next six years, though those targets will be determined by future Congresses. The bill would require a 1% cut in government spending if all 12 appropriations bills do not pass by the end of the year.
• COVID-19 Funding: Rescinds about $30 billion in previously provided funding for COVID-19 programs and activities that have not yet been obligated for spending. These funds were designated in laws enacted during the pandemic to respond to and recover from COVID-19 as well as to prepare for future pandemics. The bill retains $5 billion in funding to expedite development of COVID-19 treatments and therapeutics.
• Student Loans: Prohibits the Administration from further extending the pandemic pause on student loan payments and interest, which the Administration had planned to end on September 1. The bill does not specify how the U.S. Department of Education must resume collecting payments, which could enable the Department to offer borrowers some type of grace period or extra flexibility as payments restart in the future.

ASHA is pleased, however, that several proposals that were being discussed as part of debt negotiations were NOT included in the legislation.

Provisions of interest that are NOT included:

• Additional Spending Cuts: Excludes a provision in previously passed House legislation that would have reduced spending much more substantially and imposed a 1% annual growth cap on nondefense discretionary appropriations for the next 9 years. These spending restrictions could have necessitated cuts of up to 30% on health and education programs according to an analysis by the Office of Management and Budget.
• Medicaid:Excludes a provision in previously passed House legislation that would have required certain Medicaid recipients, with limited exceptions, to fulfill "community engagement requirements" such as work, community service, or a work training program to remain eligible for coverage.
• Student Loan Forgiveness:Excludes a provision in previously passed House legislation that would have prohibited the Administration's proposed forgiveness of up to $20,000 in federal student loans and impeded the ability of the Secretary of
  Education to protect borrowers.

ASHA previously sent a letter to House and Senate leaders [PDF] highlighting the negative consequences of cutting health and education funding, imposing Medicaid work requirements, and eliminating the Administration's student loan forgiveness program, which the Supreme Court is currently considering. ASHA also signed several coalition letters urging rejection of Medicaid work requirements [PDF] and opposition to steep cuts to education spending [PDF]. Members of ASHA's Committee of Ambassadors and ASHA-PAC Board also highlighted these issues during Capitol Hill Day 2023 in early May.

What's Next

The House and Senate Appropriations committees will draft and consider legislation in the coming weeks funding federal departments and agencies for fiscal year 2024 based on the spending levels agreed to in the debt legislation. ASHA is working to include health and education funding priorities in those bills and will provide relevant updates as developments warrant.

Questions?

Contact Jerry White, ASHA's director of federal and political affairs, at [email protected].