Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Investing

How Does the Congressional Government Spending Deal Measure Up?

by January 9, 2024
January 9, 2024
How Does the Congressional Government Spending Deal Measure Up?

Romina Boccia and Dominik Lett

House Speaker Mike Johnson (R‑LA).

Whoever thought that the May 2023 debt limit deal settled debates over topline government funding levels for fiscal year (FY) 2024 was clearly mistaken. Now four months into FY2024, Congress has reportedly struck a deal to determine how much the US federal government will spend on defense and non‐​defense appropriations, which account for roughly one‐​third of the federal budget that’s subject to annual debate.

In the big picture, House Speaker Mike Johnson (R‑LA) is finding himself between the same rock and a hard place that his predecessor did. House Republicans do not have the option of passing a funding deal without Democratic support in the Senate, necessitating negotiations that require a give‐​and‐​take approach that will leave much to be desired for both sides of the political aisle.

The January 2024 funding deal bakes in higher government spending levels, with modest restraints from capping the use of budget gimmicks and holding the line on new emergency spending. On the flip side, this deal continues business as usual, relying on budget gimmicks and emergency designations to pad topline spending, while falling short of cutting spending back to pre‐​pandemic levels or holding the line on limiting spending to no more than fiscal year 2023’s levels.

What this tells us is that neither Democrats nor Republicans are ready to face the US government’s rapidly deteriorating fiscal situation. This is a deal to avoid a government shutdown during an election year, but not much else.

The Spending is in the Details

The January 2024 spending deal includes $886.3 billion in defense and $772.7 billion in nondefense spending (base nondefense is $703.7) for a $1.659 trillion total. The nondefense topline includes $69 billion in extra spending originally agreed to in a May debt limit side deal between former House Speaker McCarthy (R‑CA) and the White House. It offsets some of this additional spending with cuts to the IRS ($20.2 billion) and by rescinding unspent COVID-19 and other emergency funds ($6.1 billion).

The deal also continues disaster‐​related emergency spending, sticking with the previous year’s level of $12.5 billion (rather than the $23 billion the Senate was asking for). The common CHIMPs (changes in mandatory programs) gimmick is included as well but capped at a lower amount than was the case in the May debt limit agreement ($15 billion, instead of $25 billion). Earmarks will also rear their ugly head yet again.

Does this Deal Establish a New Precedent for Fiscal Restraint?

The Johnson‐​Shumer budget deal fails to return discretionary spending to pre‐​pandemic levels, boosting spending by about $300 billion, before accounting for the roughly 20 percent inflation the US experienced since 2020. The deal also boosts topline spending above 2023 levels, before accounting for inflation. The deal falls short by these objective measures of fiscal restraint.

It reduces spending compared to the May debt limit deal when accounting for side deals and rejects new emergency spending designations, as requested by Senate Democrats (we wrote about these previously here). As such, it secures a small victory for fiscal restraint. That is, assuming it holds, without additional emergency supplemental spending and other final budget shenanigans once the ink is dry.

This deal still has a long way to go before being enacted. Still up for discussion are GOP border measures, Biden’s emergency supplemental request to support Ukraine, Israel, Taiwan, and more, as well as policy riders, and whether Congress will try to address the broader fiscal challenge by attaching a congressional commission bill to smooth final passage. Should they proceed with such a commission, it’s important that they give it real teeth so it stands a chance to succeed.

0
FacebookTwitterGoogle +Pinterest
previous post
Breakout Or Failed Breakout: It’s Important To See The Difference
next post
Don’t Miss Out! 2 Promising Sectors in Early 2024

You may also like

Polling Shows the President’s Tariffs Are Unpopular, Sentiment...

April 29, 2025

Corporate Transparency Act Compels Americans to Incriminate Themselves

May 28, 2024

ProPublica Profiles Army Corps Failures

November 17, 2023

Join Us in Person or Online, Sept. 12...

September 6, 2024

FISA Legislative ‘Reform’: Secret House Session Edition

February 12, 2024

Immigration Restrictions Prevent Mutually Beneficial Exchange

September 22, 2023

The Pros and Cons of Decriminalization

September 29, 2023

New Defending Globalization Content: Globalization and Women and...

January 2, 2025

Trump’s Tariff Plan Will Raise Prices for Consumers,...

July 15, 2024

Good and Bad Critiques of the Trump Civil...

February 20, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Britain’s fastest-growing firms revealed for 2025: Dfyne, Nala’s Baby and Hawkstone lead the charge

      June 29, 2025
    • Schumer to force Senate reading of Trump’s entire ‘big, beautiful bill’

      June 28, 2025
    • Rubio condemns Iran’s ‘unacceptable’ threats against IAEA director

      June 28, 2025
    • Key blue state Republican says Senate’s local tax write-off offer is a ‘good deal’

      June 28, 2025
    • Key GOP senator defects on crucial vote, imperiling Trump’s ‘big, beautiful bill’ in narrow majority

      June 28, 2025
    • Terror in Gaza: Hamas offers bounties to kill US and local aid workers, group says

      June 28, 2025

    Categories

    • Business (8,330)
    • Investing (2,081)
    • Politics (15,851)
    • Stocks (3,177)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved