Now that Congress has averted a potential partial government shutdown by passing a deal to extend the debt ceiling the remainder of the fiscal year should be strong for contractors.  Companies, however, should keep an eye on what happens after that.  It’s true that the federal market should be its traditionally active self this summer, including the busy final quarter.  Congress appropriated plenty of money for FY’23 and most of that money has to be spent or obligated by midnight September 30^th.   That’s the good news.  The bad news is that part of the debt ceiling deal contains a provision that would impose automatic 1% discretionary spending cuts at the start of FY’24 if Congress fails to pass all 12 appropriations bills on time.  This returns the term “sequester” to federal spending discussions, a word that neither contractors nor their federal clients like.  Since Congress almost always misses the appropriation deadline, it seems likely that there will be cuts at the start of the next fiscal year.  Whether or not those cuts are restored during negotiations on any final spending measures is, as yet, unknown.  In the meantime, public sentiment seems to be shifting toward reigning in government spending now that the pandemic crisis has passed.  Two polls conducted in April, including a Harris poll, showed that 60% of voters believe that the government has too much debt and that spending should be frozen along with unspent COVID money clawed back.  Those results are bound to be used by spending hawks to support reduced levels of spending everywhere except, perhaps, DOD.  Those polls also showed that a sizeable part of the electorate does not favor the reelection of President Biden, giving he and his Congressional allies limited negotiation room on spending or other high-profile priorities.  Now is the time to lock up federal business, but companies should definitely be prepared for the tightening that could come next.