“Fiscal Responsibility Act’s” impact on tech-based initiatives explained
This analysis comes from the State Science and Technology Institute, better known by its acronym of SSTI.
The State Science and Technology Institute provided an update in its latest SSTI Digest about the impact of the recently passed “Fiscal Responsibility Act” that raised the debt ceiling while cutting some programs of interest to many of our readers. Here’s the assessment.
The upshot of the debt ceiling deal recently approved by Congress is that all nondefense discretionary spending will remain at its current level of $638 billion in FY 2024, which begins October 1. Additionally, some funds were marked for recission, including $150 million from the State Small Business Credit Initiative (SSBCI). All jurisdictions that have been approved – (EDITOR’S NOTE: That includes Tennessee) – or have applied for SSBCI funding will not see a decrease in their funds, according to an email from Treasury regarding SSBCI. SSBCI incentive allocation funds and Formula Technical Assistance (TA) Grant Program allocations for Tribal governments, states, territories, and D.C. also will not be affected by the legislation. More complicated is the impact the deal will have on funding for research, innovation, and education.
Keeping all nondefense discretionary spending at its current level means that discretionary spending on education and research will likely see minimal or no growth for two years. The CHIPS and Science Act of 2022 authorized $10 billion for Regional Technology and Innovation Hubs, but Congress appropriated only $500 million for the first year of the program. Meeting the authorization level for the program and for the $170 billion authorized for R&D will be difficult without some special budget maneuvering.
The deal delays any new debt ceiling until January 2025, taking default off the political agenda until after the presidential election in November 2024.