Confused about all the buzz about the “budget,” “debt ceiling,” “tax extenders,” and “DACA?” Here’s the 101:

Since last fall, the federal government has been running on a series of “continuing resolutions,” or short-term funding measures that continue the prior year’s spending levels.  Congress has been passing these incremental measures since Oct. 1, 2017 (when fiscal year 2018 began)—except for a brief government shutdown over one weekend in January.

Congress renewed the latest of these short-term funding measures on February 9 in the “Bipartisan Budget Act of 2018,” which also addressed top-line budget caps, the debt ceiling, and tax extenders.

How did the Bipartisan Budget Act of 2018 address key issues?

1. Budget caps: Congress addressed final budget caps for fiscal years 2018 and 2019 to avoid triggering automatic spending cuts established under the Budget Control Act of 2011.  Specifically, the Bipartisan Budget Act raised these caps roughly $300 billion over the next two years. Defense spending will rise $80 billion this year and $85 billion in fiscal year 2019, while non-defense spending will rise $63 billion this year and $68 billion next year.
2. Funding for the Federal Government: The budget caps established in the Bipartisan Budget Act are only a top-line restriction on total defense and non-defense spending. Congress still needs to pass appropriations legislation allocating these funds among specific agencies and programs. The new budget law included yet another continuing resolution lasting through March 23. Now that the top-line budget caps are in place, there is a much better chance Congress can resume regular order in allocating funding for specific agencies for the remainder of the year.
3. Debt ceiling: The Treasury Department has warned that the United States will reach its next “debt ceiling”—the legislative limit on how much national debt can be issued—by mid-March. In order to address this issue and avoid default, the Bipartisan Budget Act suspended the Federal debt limit for a little over one year—through March 1, 2019. This enables the U.S. Treasury to continue borrowing to satisfy debts through this date. At the conclusion of this suspension, any money borrowed will be added to the legal debt limit.
4. Tax extenders:  The Bipartisan Budget Act enacted on February 9, 2018 included a one year (retroactive) extension of a number of tax credits, energy and otherwise, that expired at the end of 2016.

• • • On the energy front, the new law extended the energy efficiency credits and the section 45 production tax credit retroactively through the end of 2017 (so projects that began construction last year now qualify).
    • The legislation also included an extension and phase-down, through the end of 2021, of the credits for the section 48 investment tax credit and 25D energy efficient residential property credit technologies.
    • The legislation modified the nuclear production tax credit and carbon capture and storage credit to address changes sought by these industries.
    • The legislation did not modify these energy tax measures to include changes sought by the waste heat to power, energy storage, or commercial geothermal industries.

Many Democratic lawmakers were hoping to see action on immigration (specifically, resolution on Deferred Action for Childhood Arrivals, or “DACA”) as part of a budget deal.  Immigration was one of many issues previously holding up consideration of a budget. The Bipartisan Budget Act did not address DACA, but Senate leadership has committed to opening debate on an immigration bill the week of February 12.

The full text of the Bipartisan Budget Act of 2018 can be accessed here.

On top of all this, the President’s budget request for fiscal year 2019 (which starts Oct. 1, 2018) was released on Monday, February 12—so Congress will begin examining that proposal while still wrapping up work on the current fiscal year.

If you’d like to help the CEBN make a final push for clean energy funding before Congress resumes consideration of appropriations in March, please sign onto our group letter.

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The Clean Energy Business Network (CEBN) works to advance the clean energy economy through policy, public education, and business support for small- and medium-size energy companies. Started in 2009 by The Pew Charitable Trusts, the CEBN is now a small business division of the Business Council for Sustainable Energy. The CEBN represents 3,000+ business leaders across all 50 U.S. states working with a broad range of clean energy and transportation technologies.