By Meghan Castellano & Danielle Owen
Read this blog from The Corps Network’s Government Relations Team about recent updates from Washington and what they mean for the Service and Conservation Corps community.
Fiscal Responsibility Act (Debt Limit Law) Update
Over Memorial Day weekend, President Joe Biden and U.S. House of Representatives Speaker Kevin McCarthy (R-CA) announced that an agreement had been reached on raising the federal government’s debt limit. This legislation passed the House and the Senate by a bipartisan vote and was ultimately signed into law by President Biden on June 3. This law H.R. 3746, The Fiscal Responsibility Act averted the debt limit crisis.
What’s In the Debt Limit Law?
- The law will suspend the federal government’s $31.4 trillion debt limit until January 2025. The bill cuts non-defense discretionary spending for Fiscal Year 2024 and will limit all discretionary spending to 1 percent growth in Fiscal Year 2025. Along with rescinding close to $28 billion in unspent pandemic relief funds, the law rescinds $1.4 billion in mandatory IRS funds that were appropriated for this year in the Inflation Reduction Act. The bill will also toughen work requirements for the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families Program (TANF).
- The law also includes a procedure for passing the annual appropriations bills for Fiscal Year 2024 and Fiscal Year 2025. Congress would be required to pass all twelve annual appropriations bills by January 1 (for those two fiscal years) or there would be an automatic cut to current spending by 1 percent.
What Does This Mean for Corps?
For the Corps community, AmeriCorps is one of the agencies that will have funding rescinded from the American Rescue Plan Act of 2021 (ARPA). AmeriCorps’s unobligated funding from the ARPA – excluding ARPA funding in their Salaries and Expenses, the National Service Trust, and the Inspector General accounts – would be rescinded. The funds that are being rescinded were expected to be used through what remains of Fiscal Year 2023 and in Fiscal Year 2024 as part of AmeriCorps’s multiyear ARPA implementation plan. Below is what the rescission of these ARPA funds means for AmeriCorps VISTA and AmeriCorps State and National:
- AmeriCorps VISTA: A total of $37 million, intended to support living allowances in Fiscal Year 2024, will be rescinded. Due to this cut, AmeriCorps VISTA will not host a summer associate program in Fiscal Year 2024 and anticipates funding 500 fewer full-year member service years in Fiscal Year 2024 than in Fiscal Year 2023 (pending Fiscal Year 2024 appropriations).
- AmeriCorps State and National: A total of $28 million, which was expected to be used for competitive grant funding in Fiscal Year 2024, will be rescinded. This will reduce the number of AmeriCorps State and National positions funded in Fiscal Year 2024 by approximately 2,500 AmeriCorps members.
Fiscal Year 2024 Appropriations
How Is the Fiscal Responsibility Act (Debt Limit Law) Related to Fiscal Year 2024 Appropriations?
- While the Fiscal Responsibility Act’s immediate goal was to raise the debt ceiling so that the U.S. could avoid defaulting, it also included topline spending caps for Appropriators to use when creating their appropriations bills.
- This legislation set the non-defense discretionary spending cap at $704 billion. This is a $40 billion cut (or five percent) from Fiscal Year 2023. The Appropriations Committees will be able to reallocate unspent funds, largely from the American Rescue Plan Act (ARPA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), that will essentially help to keep Fiscal Year 2024 non-defense funding at flat levels.
Where Do the Annual Appropriations Bills Stand Currently?
The Fiscal Year 2024 appropriations process is in full swing in the U.S. Congress. The House is close to completing its committee action on Fiscal Year 2024 appropriations bills. Unfortunately, House Appropriations Chair Kay Granger (R-TX), in response to pressure from the far-right wing of the House Republican Caucus, has decided to draft their Fiscal Year 2024 appropriations bills at Fiscal Year 2022 funding levels and not that level set in the debt limit legislation. The Senate is drafting their bills at the funding levels set in the debt limit legislation. Below is information on what is in the House draft bills for the Interior-Environment and Labor, Health, and Human Services Subcommittees.
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Interior and Environment (bill passed out of Full House Committee)
The House Appropriations Committee has held a full committee mark-up of the Interior-Environment draft bill. The draft bill report is linked here.
- The draft bill contains cuts to the Department of Interior (DOI) overall and at the Department’s various units. There are increases for the U.S. Forest Service (USFS) for wildland fire management. The bill does include the annual $5 million at the USFS for “priority projects within the scope of the approved budget, which shall be carried out by the Youth Conservation Corps and shall be carried out under the authority of the Public Lands Corps Act of 1993 (16 U.S.C. 1721 et seq.).”
- The draft bill’s report contains the following language:
- “Federal Corps Programs. —No funding is provided within Title I for the Department of the Interior to implement the redundant Civilian Climate Corps. The Committee supports the work of the Youth Conservation Corps and the Public Lands Corps, two longstanding Federal corps programs related to conserving and restoring public lands and waters that partner with locally based, nonfederal corps organizations.”
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Labor, Health, and Human Services, Education (bill passed out of House Subcommittee)
As of the writing of this, the House Appropriations Full Committee has not marked up the Labor, Health and Human Services, Education Appropriations bill. There is the potential for changes to this draft bill during the full committee mark-up. As it stands, the draft bill provides $163 billion in Fiscal Year 2024 funding. This is a cut of $63.8 billion or 28 percent below Fiscal Year 2023. If this became law, it would be the lowest funding level for the Labor, Health and Human Services, Education bill since 2008.
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- AmeriCorps – The draft bill would cut the AmeriCorps agency’s topline to $660.94 million. This is a fifty percent cut compared to Fiscal Year 2023. The bill would eliminate funding for the National Service Trust, which funds the Education Awards that Corpsmembers earn.
- Job Corps – The draft bill eliminates funding for Job Corps, a cut of $1.8 billion that would eliminate job training and employment services for 50,000 youth who face barriers to employment.
- Pell Grant – The bill does not provide an increase for the maximum Pell Grant award. The amount of a full-time Segal AmeriCorps Education Award is equivalent to the maximum value of the Pell Grant. If this bill became law, it would be the first time since 2012 that the maximum Pell Grant award was not increased.
- WIOA Youth Job Training State Grants – The draft bill eliminates funding for WIOA Youth Job Training state grants, a cut of $948 million that would eliminate job training and employment services for 128,000 youth who face barriers to employment.
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Are We Headed Towards a Government Shutdown? Could There Be a Year Long Continuing Resolution?
Given the discrepancies in funding levels at which the House and Senate are drafting their spending bills it will likely be difficult for the two chambers to find common ground. Fiscal Year 2023 ends on September 30, 2023. Congress has until then to pass an Appropriations package. If they are unable to do so they may pass a Continuing Resolution to keep the government funded at current levels until a decided end date. It is important to keep in mind that the debt limit legislation, signed into law in early June, also includes a provision that would reduce defense and non-defense spending by one percent from current levels if all twelve full-year appropriations bills are not completed by January 1, 2024.
If by the end of September 30, 2023, no agreement is reached to pass an appropriations package through both chambers of Congress and signed into law by the President or no Continuing Resolution is passed through both chambers and signed into law by the President, a federal government shutdown would occur.