Understanding the Fiscal Responsibility Act of 2023: A Snapshot
Posted on Jul 06, 2023 at 12:07 AM
The Fiscal Responsibility Act of 2023 has been discussed in the political and economic spheres. Let's explain what this legislation entails and how it affects US infrastructure.
Debt Ceiling Suspension Till 2025
The White House and House Republican Leadership, after several discussions, agreed to suspend the debt ceiling until January 1, 2025. This move, part of the Fiscal Responsibility Act of 2023, allows the federal government to borrow more money to fund its programs. Previously, the US Treasury had announced a $34.1 trillion debt ceiling and raised concerns about the government's ability to meet obligations beyond a nearing deadline.
Impact on Budget Deficits and Debt
The Congressional Budget Office, an impartial body, assessed the legislation. The Fiscal Responsibility Act is expected to cut budget deficits by $1.5 trillion and reduce national debt interest by $188 billion.
Effects on Transportation Budgets
Several unspent funds from 2021, totalling $28 billion, are being revoked, affecting transportation budgets and programs. Here are some highlights:
- Federal Highway Administration loses $2.2 billion in uncommitted funds from the 2021 Omnibus.
- Airport and Airway Trust Fund received $187.9 million through the CARES Act and American Rescue Plan.
- Amtrak got $2 million under the American Rescue Plan.
- The Broadband Connectivity Fund allocated $15 million.
However, it is essential to note that $3 billion in unspent transportation funds is protected from revocation.
Streamlining Infrastructure Projects
The Fiscal Responsibility Act paves the way for streamlining the permit process for infrastructure projects. It adopts several elements from the Builder Act, aiming to speed up environmental assessments and unambiguous language in the legislation. Some key provisions include:
- Refining the National Environmental Policy Act to focus on “reasonably foreseeable environmental impacts”.
- Establishing a lead agency for each project to ensure timely decisions.
- Limiting environmental documents to a reasonable number of pages.
- Setting deadlines for environmental impact statements and assessments.
- Allowing project sponsors to assist with environmental assessments while keeping the primary agency in control.
- Requiring the use of reliable and current data sources.
Enhancing Transmission Capacity
The act also mandates the North American Electric Stability Corporation to assess transmission capacity for grid stability. Should there be a need for greater transmission capacity across regions, the Federal Energy Regulatory Commission will prioritize increasing capacity.
Promoting Energy Storage Projects
The Fiscal Responsibility Act facilitates energy storage projects by allowing them to receive FAST-41 permits, which aims to streamline the environmental assessment process for covered infrastructure projects.
PAYGO: Keeping Expenditure in Check
The Act introduces a Pay-As-You-Go (PAYGO) provision. It requires that any executive action that raises direct spending should have a corresponding plan to offset that increase with decreased spending elsewhere. It gives the Office of Management and Budget Director significant discretion on waivers and protections against court reviews. This provision will expire on December 31, 2024.
Conclusion
The Fiscal Responsibility Act of 2023 is a comprehensive legislation that aims to tackle national debt, streamline infrastructure project approvals, and keep government spending in check. It represents a critical response to the United States' financial and infrastructure challenges.
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