Federal budget for FY23

February 13, 2023
Federal budget for FY23

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Congress passed the $1.7 trillion federal budget for fiscal year (FY) 2023. The bill’s release edged close to the continuing resolution’s (CR) Dec. 23 deadline, which is when federal funding was set to expire. If the omnibus had not passed by then, a government shutdown would have occurred.

The bill includes $772.5 billion for nondefense discretionary programs and $858 billion for defense, with $44.9 billion allocated for Ukraine.

After weeks of negotiation between parties, the omnibus aims to advance bipartisan priorities, such as infrastructure, education, nutrition, and affordable housing. Because the budget was passed before the end of the 2022 calendar year, Republicans and Democrats will now be given a clean slate to begin discussions around the FY 2024 budget.

Mandatory and discretionary spending

Mandatory spending on entitlement programs, such as Social Security and Medicare, has been the topic of debate. There are long-term concerns on a bipartisan basis about the stability of these federal programs. These concerns may come to a head in 2023, since the federal government will come up against the debt ceiling, which is currently at $31.4 trillion. Conversations around whether to raise or suspend the debt limit will be had.

While there is bipartisan consensus to keep defense spending going, there is less of an agreement on the discretionary side of the ledger. Republicans have tried to slow or reverse nondefense spending in areas such as Social Security, Medicare, Medicaid, and other such programs.

Previously, caps were placed on defense and nondefense spending. But those caps steadily increased over time and have always increased together. As the debt ceiling rises, Congress will need to work out details on possibly bringing back spending caps for future discretionary and mandatory budgets. In the coming year, changes or cuts to programs are likely.

New Congress & Priorities in 2023

Learn more about the Farm Bill and FAA Reauthorization, deadlines driving actions in 2023, and leaders to watch.

Federal budget as “moral document”

Some say that the congressional budget resolution is a “moral document,” which reflects the priorities of the party in charge. These priorities shift depending on the size of the majority.

But, because of how the Senate operates, the upper chamber’s minority party still has a significant say in what the budgetary bills contain. Although Democrats had House and Senate majority this past year, they haven’t been able to accomplish everything they hoped for with respect to health-care, reproductive rights, and other key issues.

Ultimately, a budget that comes through Congress is indicative of compromise between parties and people. The FY 2023 budget – and other budgets to come – will be reflective of just that.