The Fiscal Responsibility Act of 2023: What is it, and how does it impact health care?

In May 2023, the White House released a summary suggesting that the United States was rapidly approaching the date at which the government could no longer pay its bills, called the X-date. This date was critical because an actual breach of the debt ceiling—meaning the U.S. defaulting on its debts—would have been highly detrimental to physicians, patients, and the overall U.S. economy.

Experts warned that unemployment would spike, stock markets would plunge and consumer spending would decrease. Interest rates would skyrocket, and a recession would occur.

Fortunately, Congress was able to intervene just in time in order to dodge hitting the debt ceiling—but the process required a compromise between the Republican and Democratic parties. Enter the Fiscal Responsibility Act of 2023.

How did this bill come about?

On May 31, 2023, the House passed the bill, HR 3746, in a 314-117 vote. The next day, on June 1, the Senate passed the bill in a 63-36 vote. In order for the bill to pass, senators from both parties proposed amendments that would further limit spending or remove other policy provisions.

On June 3, having reached a deal with Republican House Speaker Kevin McCarthy, President Joe Biden signed the Fiscal Responsibility Act of 2023 to temporarily suspend the $31.4 trillion debt ceiling until January 1, 2025, thereby preventing a U.S. loan default and providing the government with the time needed to pay its bills.

The Fiscal Responsibility Act of 2023 had a few conditions, including limits on discretionary government spending for two years, new work requirements for certain federal aid recipients and cancellations of unspent COVID-19 funds.

What are the impacts of this bill?

As a result of these provisions, the deal also has implications for health care. It adds new budget authority limits for disability reviews and eligibility redeterminations, along with health care fraud and abuse control. It rolls back approximately $30 billion in unspent pandemic relief funds, and some of these funds will be reallocated for other non-defense appropriations.

The bill will continue to authorize certain initiatives, including:

• Project NextGen, an initiative to develop new COVID-19 treatments and vaccines.
• Separate programs offering COVID-19 vaccines for uninsured individuals.
• The Cost of War Toxic Exposures Fund, which provides funding for the Honoring Our PACT Act. The PACT Act extends health coverage for veterans who were exposed to certain environmental hazards during their service that caused cancers and other illnesses.
• Continued appropriations for veteran and Native American health care.

Other key provisions of the Fiscal Responsibility Act that have implications for health care include:

• The end of the moratorium on student loan repayments by the end of August 2023.
• Implementing new work requirements for recipients of the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF).
• Cutting government spending for fiscal year 2024 by 1% if Congress doesn’t pass all 12 appropriations bills by the end of 2023.

As a result of the Fiscal Responsibility Act, the Congressional Business Office estimates that it will save $3.9 billion in 10-year expenditures.

It is important that we continue to work with Congress to ensure that the osteopathic voice is heard on Capitol Hill. Although we were able to avoid hitting the debt ceiling, many priorities for the osteopathic profession remain. Be sure to visit the Osteopathic Advocacy Network to review and take action on issues that impact you and the patients you serve.

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