The budget deal recently struck by congressional leaders would be a bittersweet resolution to this year’s spending fight. On the one hand, it prevents a harmful government shutdown and adheres to the spending levels in the Fiscal Responsibility Act (FRA) negotiated by President Biden and former House Speaker Kevin McCarthy (R-Calif.) in June. But it rewards Republicans for threatening to renege on the agreement they already made and may help wealthy tax cheats in the process. Moreover, it avoids any real discussion about what is needed to remedy our nation’s fiscal imbalance.
The bipartisan agreement calls for just under $1.66 trillion in discretionary spending for fiscal year 2024, split between domestic and defense programs. Defense spending will be set at $886 billion, a 3% increase over the previous year, while non-defense spending will be set at $773 billion, roughly flat from the previous year. After accounting for inflation, this amounts to roughly flat defense spending with a 3.4% cut for non-defense spending.
Most importantly, this deal averts a harmful shutdown that would interrupt important federal programs and create a costly disruption to the nation’s economy through higher unemployment, lower GDP and disruptions to important sectors. Depending on their length, previous government shutdowns have cost the economy as high as $20 billion.
This story was originally published in The Messenger on January 16, 2024.
