Economic disaster was averted late last week when President Biden signed into law legislation that avoids a government default, the result of furious negotiations between the parties that resulted in the passage of a bill that neither party particularly liked, but most lawmakers agreed was a necessary compromise.
The bill, titled the Fiscal Responsibility Act, suspends the federal debt ceiling – the legal limit on how much the U.S. Treasury can borrow to pay the government’s bills – until 2025. Without this, Treasury Secretary Janet Yellen had indicated that the government’s coffers would be empty by today, with no way to pay Social Security benefits, military personnel pay, government contractors and U.S. Treasury bondholders. The consequences of a default could have meant millions of jobs lost, higher interest rates and mortgages, and a global recession.
In exchange for approving a two-year moratorium on the debt ceiling, congressional Republicans demanded spending cuts and some other policy ideas be included in the bill – some of which may affect CRM. Here is a rundown of what the Fiscal Responsibility Act includes:
Non-Defense Spending. The bill freezes spending levels for virtually all domestic federal programs in the fiscal year that begins in September, and limits increases in spending to just one percent in the following year. While these caps are far less ambitious than what congressional Republicans initially demanded, they will likely mean less funding for various programs over the next two years, particularly when inflation is taken into account. Defense spending would see a small increase under the bill.
Although the bill does not specify funding levels for individual programs, it is likely that almost all programs – including historic preservation and infrastructure – will either remain at the same level or drop slightly in 2024 and 2025. ACRA and its partners in the preservation community continue to advocate to Congress on behalf of the Historic Preservation Fund (HPF), which partially funds state and Tribal historic preservation offices (S/THPOs), as well as a host of other preservation grant programs.
Permitting Reform. The bill includes a number of provisions to reform the federal permitting system, although here, too, less drastically than what congressional Republicans had initially backed.
The permitting provisions would:
- Reform the National Environmental Policy Act (NEPA) by establishing threshold determinations that do not require agencies to prepare environmental documents if:
- the effort is not a final agency action;
- the effort is excluded under an agency’s categorical exclusions;
- the preparation of the document would conflict with requirements of another law; or
- the agency does not have authority to consider environmental factors when implementing the proposed action.
- Require the designation of a lead agency should more than one federal agency be involved in a project. Under the bill, lead agencies can designate federal, state, local or tribal agencies with environmental impact jurisdiction as cooperating agencies. Any federal, state, local or tribal agency affected by a lack of designation as a cooperating agency may submit requests for such designations to the lead agency. If agencies cannot agree on a lead agency within 45 days, the Council on Environmental Quality (CEQ) is required to oversee a process to determine one.
- Directs the lead and cooperating agencies to evaluate proposals in a single document and allow public comment for notices of intent to prepare an environmental impact statement (EIS).
- Limit each EIS to 150 pages, with the exception for actions of extraordinary complexity, which may not exceed 300 pages; and limit environmental assessments (EAs) to 75 pages.
- Require that EISs are due within two years after—and EAs within one year after—the sooner of the date the agency determines the EIS or EA is required; the date the agency notifies the application that the application to establish a right-of-way is complete; or the date the agency issues a notice of intent to prepare the EIS or EA. However, should the lead agency determine that established deadlines cannot be met, it may extend the deadline in consultation with the applicant.
- Allow agencies to use analyses included in a programmatic environmental document in subsequent environmental documents within five years and without review of the analyses unless there are substantial new circumstances.
- Allow agencies to adopt a categorical exclusion listed in other agencies’ NEPA procedures, as long as they consult with the agency that established the categorical exclusion and publicize the use of the categorical exclusion.
- Provide $500,000 to CEQ to study the potential for online and digital technologies to expedite permitting reviews.
The bill also would mandate the expedited completion of the Mountain Valley Pipeline in West Virginia and Virginia.
Although the permitting reforms in the bill are somewhat modest, lawmakers are looking to advance more extensive reforms later this year.
Other Provisions in the Bill
In addition to suspending the debt ceiling, making spending cuts and reforming permitting, the Fiscal Responsibility Act makes other policy changes backed by congressional Republicans, although in each case they were the subject of compromises with President Biden. These include:
- Rescinding $20 billion of the $80 billion provided for the Internal Revenue Service (IRS) in the 2022 Inflation Reduction Act to hire more agents to audit higher income earners and upgrade the agency’s antiquated technology. Republicans have wanted to take back all of the $80 billion, claiming that the agents it would hire would go after middle class taxpayers.
- Reclaiming about $30 billion in unspent funding for programs related to Covid-19 and other public health uses; most of the funding will be directed to other uses.
- Expanding the age range of people who will be required to satisfy work requirements to receive food stamps from the Supplemental Nutrition Assistance Program (SNAP), from 18-49 to 18-54, and expanding exemptions for veterans and those who are homeless.
- Restarting student loan repayment requirements that were suspended during the pandemic; the bill requires borrowers to begin making payments again no later than August 30.