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PSC Applauds the Signing of the Fiscal Responsibility Act of 2023, Urges Better Preparation for the Next Debt Limit Extension

   
Arlington, Va. (June 5, 2023) The Professional Services Council (PSC) applauds the passage by Congress and signing by the President of HR 3746, the Fiscal Responsibility Act of 2023 (FRA). This bill extends the national debt limit to January 1, 2025, and sets the stage for Congress to move forward on appropriating funds for all government agencies and operations for Fiscal Year 2024 (FY24).

“On behalf of our member companies, PSC welcomes the resolution of this most recent debt limit crisis. We acknowledge the hard work and perseverance of those who negotiated this agreement and look forward to working with congressional committees and federal agencies to implement its provision,” said David J. Berteau, President and CEO of PSC.  

In addition to helping the Government avoid default, the FRA sets FY24 funding targets for defense and non-defense agencies. However, the congressional appropriations process depends on dividing or allocating those targets by subcommittee across the cabinet departments and independent agencies. 

“Appropriations subcommittees are scheduled to mark up their bills in the coming weeks,” said David Broome, PSC’s Executive Vice President for Government Relations. “We have a starting point, but there are many details to work out, and we are less than four months from the start of the next fiscal year.”

Berteau noted that this is the 11th time in the last 13 years that the U.S. has come close to defaulting on its financial obligations, adding, “We know the schedule for our next debt limit extension crisis, and though it is two years away, we must recognize that our nation has a recent history of coming too close to default. Now is the time to prepare for the possibility of default and for developing prudent, necessary guidance to federal agencies before the next debt crisis.”

Last month, PSC wrote to the Office of Management and Budget, urging its director to issue a memorandum with guidance to agencies on how to maintain government operations in the event of actual default.  PSC urged the White House and OMB to keep the entire federal government fully functioning even under default as a strong signal to the nation and the world that the U.S. was still operating and that default would be a temporary situation.

“Continuing all missions and functions across the government would be the best way to maintain trust and confidence in America, but agencies had vastly different approaches in their thinking with regard to how to operate if default were to occur,” said Stephanie Sanok Kostro, PSC’s Executive Vice President for Policy. “In particular, actions to mitigate the impact on government personnel and contractors would have been inconsistent, incomplete, and insufficient. Today, while this brush with default is fresh in everyone’s mind, is the right time to develop  contingency plans and coordinate a guidance document that will minimize the negative impact of a potential future default.”


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