June 2023

On June 2, President Joe Biden signed the Fiscal Responsibility Act, which prevented the U.S. from default by suspending the debt ceiling through January 1, 2025. As part of the agreement with Congress, spending caps were established for the next two fiscal years, setting up a challenging budget outlook for federal investment in education research and data.

The act essentially holds overall funding for non-defense discretionary spending flat for FY 2024, with a one percent increase for both non-defense and defense spending in FY 2025. It also includes a provision that would automatically reduce the FY 2024 cap by one percent below FY 2023 levels if all FY 2024 appropriations bills are not passed by January 1, 2024.

The House and Senate have begun consideration of FY 2024 appropriations bills that adhere to the caps set in the law. The House and Senate appropriations committees have agreed to the top lines, called 302(b) allocations, for each of the 12 spending bills. The House allocations, aligned with House Republican priorities to cut spending to FY 2022 levels, include a 29 percent cut in the overall top line for the Commerce, Justice, and Science (CJS) and the Labor, Health and Human Services, and Education (LHHS) bills compared with FY 2023. The Senate 302(b) allocations include cuts of 15 percent to the CJS top line and 6 percent to the LHHS top line compared to FY 2023. These amounts represent a higher level in the Senate top lines of $11 billion in CJS and $49 billion in LHHS compared to the House top lines.

Proposed Top Line Allocations for FY 2024 Appropriations (in billions)

The House and Senate appropriations committees have begun marking up FY 2024 bills and will continue once Congress returns from recess during the week of July 10. The LHHS bill, which includes funding for the Institute of Education Sciences and the National Institutes of Health, and the CJS bill, which includes funding for the National Science Foundation, have not been released yet.

In addition to the budget caps, the Fiscal Responsibility Act rescinded unobligated COVID-19 emergency relief funds. The rescissions included unobligated funding for the Institute of Education Sciences, which received $100 million in the American Rescue Plan Act of 2021 (ARP), though the amount to be rescinded was not specified. A June 5 letter from the Department of Education to grantees noted: “The rescissions do implicate a small amount of other ARP funds that the Department has not yet obligated, including certain funding for the Institute of Education Sciences. We are working to implement these reductions in a way that maintains as much support as possible to our grantees.”