ALL INPredictions
Last updated Nov 29, 2025
Prediction
Friedberg
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Friedberg @ 01:26:12Wrong
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Under the terms of the 2023 U.S. debt‑ceiling deal, in mid‑January 2024 (around January 17), Congress will likely fail to agree on a new budget, triggering the automatic 1% across‑the‑board cut to discretionary federal spending.
That's the most likely path right at this point.View on YouTube
Explanation

The Fiscal Responsibility Act (FRA) of 2023 did create a mechanism for an automatic 1% reduction in discretionary spending caps if Congress failed to complete appropriations, but it did not operate on a mid‑January 2024 timetable, nor did an across‑the‑board 1% cut actually occur.

  1. Timing in the law: OMB’s December 22, 2023 guidance explained that although the FRA revises the caps when a continuing resolution (CR) is in effect on January 1, no sequestration order is issued on January 1. Any across‑the‑board cuts (sequestration) would only be considered after full‑year appropriations are enacted or on April 30, 2024, whichever came first, if a short‑term CR was still in effect then. OMB explicitly said it would “take no action on Jan. 1, 2024” and agencies should not self‑sequester. (voter.org) So the prediction’s scenario of an automatic 1% cut being triggered in mid‑January is inconsistent with how the FRA actually worked.

  2. What Congress did: Congress ultimately completed full‑year FY2024 appropriations in March 2024, not failing to agree on a budget. Six bills were enacted in the Consolidated Appropriations Act, 2024 (P.L. 118‑42) on March 9, 2024, and the remaining six in the Further Consolidated Appropriations Act, 2024 (P.L. 118‑47) on March 23, 2024. (iaproject.org) A CRS analysis on exemptions to the FRA caps confirms that all 12 regular FY2024 appropriations acts were enacted in those two laws. (congress.gov) That means the April 30 “penalty” deadline was beaten, so the automatic 1% enforcement mechanism was never triggered.

  3. No 1% across‑the‑board cut occurred: The same CRS report, summarizing OMB’s Final Sequestration Report for FY2024 (April 12, 2024), notes that there was no breach of either the defense or nondefense discretionary caps and thus no need for discretionary sequestration. (congress.gov) In other words, the feared across‑the‑board 1% cut to discretionary federal spending never happened at any point in 2024, let alone in mid‑January.

Because (a) the legal mechanism did not operate the way the prediction described for mid‑January, and (b) Congress passed full‑year appropriations in March 2024 such that no automatic 1% across‑the‑board cut was triggered at all, the prediction that this was the “most likely path” turned out to be wrong in outcome.