May 31, 2023
Breaking Down the CBO Score of H.R. 3746, the Fiscal Responsibility Act of 2023
The Fiscal Responsibility Act (FRA) of 2023 will reduce the deficit by more than $2.13 trillion over ten years.
Here's how the Congressional Budget Office (CBO) scores Republican-championed savings:
Discretionary Savings
The Big Picture: CBO scores the statutory caps for FY2024-25 as reducing discretionary budget authority by $246 billion in the short term.
- In other words: federal spending that is authorized through the normal Congressional appropriations process will have to comply with a lower starting point.
- By reducing the starting point for future spending increases, the two-year caps alone cut discretionary spending over ten years by $1.5 trillion in budget authority ($1.3 trillion in outlays).
This will have a positive impact for reining in spending every year.
- CBO further estimates that the congressionally-enforced caps in FY2026-29 will reduce discretionary spending a further $632 billion in budget authority ($553 billion in outlays) over ten years.
Even though the bill provides $22 billion for FY 2023 for the Department of Commerce’s “nonrecurring expenses fund,” which CBO estimates would cost $100 million over ten years, the FRA’s spending caps will lead to long-term savings of a vastly greater amount.
In the long run: The FRA is a total ten-year savings of $2.1 trillion in budget authority and $1.9 trillion in outlays from the combination of all six years of discretionary caps.
In the long run: The FRA is a total ten-year savings of $2.1 trillion in budget authority and $1.9 trillion in outlays from the combination of all six years of discretionary caps.
Mandatory Savings and Other Provisions
The Big Picture: The FRA is a major step in stopping Democrats’ unbridled spending while reviving our economy through pro-work and pro-energy policies.
- Defunding Biden’s Army of IRS Agents: The bill reduces IRS enforcement mechanisms by cutting Democrats' Inflation Reduction Act-era funding by $1.4 billion. Reducing the total of IRS’s slush fund, the IRS will prioritize customer service, curtailing Biden’s plan to increase audits of small businesses and working families.
- Strengthening Welfare Work Requirements: Supplemental Nutrition Assistance Program (SNAP) work requirements in the bill would save $6.5 billion from increasing the age limit. Overall, CBO estimates the total impact of SNAP work requirement changes would increase spending by $2.1 billion over ten years. TANF reforms would save $5 million over ten years.
- Eliminating Administrative Waste: The bill cuts 87 separate budget accounts, totaling $27.1 billion in budget authority and $11 billion in outlays over ten years. This is the largest rescission package in history.
- Requiring the Executive Branch to Offset Future Spending Increases: The FRA strengthens PAYGO, which is a law that requires spending increases to be offset through either tax hikes or spending decreases elsewhere, to hold the Executive Branch accountable for any potential future spending increases.
- While CBO did not formally issue an estimate on the effect of the PAYGO provision on future, unknown executive actions that increase spending, this provision would have subjected the $1.5 trillion in administrative spending already approved by President Biden to further scrutiny.
- Reinstating Parity for Student Loans Repayments: Reinstating student loan payments will save taxpayers approximately $5 billion per month starting in September. CBO’s baseline assumed no further extension of the moratorium currently in place, despite previous “one last time” extensions by the Biden Administration.
- Without House Republican-backed provisions, there was the strong possibility that an adverse Supreme Court decision on forgiveness would have prompted another payment moratorium.
- Unleashing American Energy Independence Through Permitting Reform: House Republicans top priority for the 118th Congress was reducing bureaucratic barriers to promote greater access to public lands for energy use by easing permitting bottlenecks and efforts to increase mining. The result was H.R. 1, the Lower Energy Costs Act, which was passed in the House with an overwhelmingly bipartisan vote.
- CBO found that H.R. 1 would end the Department of the Interior’s ability to spend, without further appropriation, certain receipts from oil, gas, and wind leases.
- Given time constraints, CBO was not able to perform an analysis of the positive economic feedback from accelerating job-creating investments with the permitting reform provisions in the FRA.
- Paying Down On Our Debt’s Piling Interest: Assuming adherence to congressionally-enforced caps through 2029, the bill would lower interest payments on the debt by $240 billion over ten years.
While a CBO score cannot capture all the economic benefits of a piece of legislation, it is a good framework for seeing how House Republicans’ efforts to reverse Biden’s reckless spending, rein-in the runaway bureaucracy, and return to pro-growth policies will save Americans trillions of dollars and help reverse the slow-growth Biden economy.
