Insights

A U.S. federal government shutdown creates a number of direct and indirect consequences that impact U.S. companies, individuals and virtually every aspect of the U.S. economy.  Although the federal government has experienced previous lapses in funding that have led to shutdowns of all or part of the federal government, the current funding impasse and impending shutdown raise a number of unique and unprecedented questions for government workers, government contractors and businesses, and the public at large.

After weeks of tense negotiation between the White House and House Speaker Kevin McCarthy (R-CA), the Fiscal Responsibility Act, H.R. 3746 (the Act) has passed both chambers of the U.S. Congress and awaits President Biden’s signature. The compromise agreement pairs a two-year suspension of the $31.4 trillion debt ceiling (through January 1, 2025) with cuts in federal spending. The agreement automatically reinstates the debt limit to the amount of debt outstanding on January 2, 2025; defense and nondefense discretionary spending would be subject to caps — allowing for certain exceptions — which would be enforced by sequestration. The legislation also makes several policy changes, including: a rescission of a portion of funds provided to the IRS in the Inflation Reduction Act that cover enforcement activities through 2031; a rescission of $27 billion of budget authority from a broad collection of accounts related to the federal government’s response to the COVID-19 pandemic; an overhaul of permitting reviews for energy projects; and higher age limits for work requirements on certain federal safety net programs. The legislation also codifies pay-as-you-go (PAYGO) requirements for the executive branch. The agreement, in large part, averts significant cuts to federal spending and preserves President Biden’s key climate, infrastructure and health priorities enacted in the first two years of his administration.

On March 9, 2023, President Biden released his fiscal year (FY) 2024 budget request outlining the administration’s priorities, including a nearly 10 percent increase in discretionary spending over the current enacted funding levels. The President’s budget requests a total of $6.9 trillion federal spending for FY 2024. Of this amount, $4.2 trillion would be in mandatory spending and $1.9 trillion would be in discretionary spending. Defense spending would receive an approximately 3 percent increase from FY 2023 for a total of $885 billion in discretionary spending, while non-defense spending would receive a nearly 4 percent increase from FY 2023 levels for a total of $1.02 trillion in FY 2024. The President’s budget request proposes a 7 percent increase over current non-defense spending level and tax increases among other proposed revenue raisers designed to lower the national deficit by $3 trillion over the next 10 years. 

With the midterm elections (mostly) behind us, Congress is working through a list of must-pass items in the remaining days of the 117th Congress. Heading into the new divided Congress in 2023, with the narrowest Senate majority and House leadership not yet decided, we anticipate a move away from the Speaker-dominant House leadership model with small factions and individual members trying to exert influence over the agenda. We will discuss how razor-thin margins in both Congressional Chambers sets up a dynamic whereby President Biden and both parties in Congress will be motivated to find some common ground on legislation during the lame duck session and in the next two years. We will also provide insights into some key committees and issues that will be top priorities in the next Congress.

The Crowell Health Solutions, Crowell & Moring Government Affairs Group and Crowell & Moring International (CMI) team invite you to attend a webinar on what to expect in health care in 2023 on Capitol Hill, in the U.S. and abroad, now that U.S. Mid-Term Elections are over. In particular, this webinar will focus on key issues such as drug pricing, health care supply chains, data privacy regulation, general and reproductive rights issues, telehealth and concerns that matter to U.S. and global healthcare companies. 

Join us for this year’s Health Care Ounce of Prevention Seminar (HOOPS), a webinar series where our experienced practitioners will provide insight into a number of exciting topics. This year’s seminar will focus on topics such as Remote Health Care and Telemedicine, Mental Health Parity, Health Care Litigation, and Health Care Trends for 2022.