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              Congressional                                                     ____
          ~ Research Service






The FRA's Discretionary Spending Caps

Under a CR: FAQs



June  23, 2023

What   is the  FRA   and  how does it limit discretionary spending?

The Fiscal Responsibility Act (FRA, P.L. 118-5), enacted in June 2023, temporarily suspends the debt
limit and reinstitutes enforceable discretionary spending limits for FY2024 and FY2025 for both defense
and nondefense discretionary spending. The limits for defense represent an increase in both fiscal years
from the FY2023 enacted level, while the limits for nondefense represent a decrease in both fiscal years
from the FY2023 enacted level, as shown in Table 1.

       Table I.FRA Discretionary Limits on Budget  Authority for FY2024  and FY2025
                                 (in Billions of Nominal Dollars)
   Fiscal Year  Defense Discretionary  Nondefense Discretionary            Total
   FY2023 (enacted)          $858.36                    $743.89                    $1,602.25
        FY2024               $886.35                     $703.65                     $1,590
        FY2025               $895.21                     $710.69                   $1,605.90
    Sources: P.L. 118-5.
    Note: This table shows only base spending, which excludes funding that would be exempt from budgetary enforcement.
If discretionary appropriations are enacted that exceed the limit in either category, a sequester is triggered
making across-the-board reductions within the applicable category (defense and/or nondefense). In most
cases, the President would issue such a sequester order within 15 calendar days after the end of a session
of Congress. Certain types of spending, such as spending designated as being for emergency purposes, are
effectively exempt from the limits.

What does the FRA require in the event that a CR is in effect?

The FRA  includes a provision that has been described as incentivizing Congress to enact regular full-year
appropriations legislation instead of relying on continuing resolutions (CRs). This provision requires that

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