The Fiscal Responsibility Act (FRA) in FY2025: Current Status (CRS Report for Congress)
| Release Date |
Oct. 1, 2024 |
| Report Number |
IN12433 |
| Report Type |
Insight |
| Authors |
Drew C. Aherne; Megan S. Lynch |
| Source Agency |
Congressional Research Service |
Summary:
The Fiscal Responsibility Act (FRA, P.L. 118-5), enacted in June 2023, established statutory discretionary
spending limits for FY2024 and FY2025 for both defense (security) and nondefense (nonsecurity)
discretionary spending. Table 1 shows the limits established for each category in both fiscal years. Most
discretionary budget authority is constrained by the limits, but certain categories are effectively exempt
from the limits under the FRA. Spending designated as an emergency requirement is effectively exempt
up to any amount, while funding for certain purposes—such as program integrity initiatives, disaster
relief, reemployment services, and wildfire suppression—are exempt up to specific amounts.
If discretionary appropriations are enacted that exceed the statutory limit for a fiscal year in either
category (defense and/or nondefense), a sequester is triggered, making across-the-board reductions to
nonexempt spending to eliminate spending above the limit within the applicable category. The Office of
Management and Budget (OMB) has the sole statutory responsibility of determining whether
sequestration is required and, if so, the amount to be reduced by the sequester. Any sequestration of
affected discretionary budget authority would not occur until OMB issues a final sequestration report
specifying the amount of any breach, as well as the sequestration percentages necessary to achieve the
required reduction. A complex set of deadlines currently governs the date on which OMB must issue any
required final sequestration report (as shown in Table 3).
