Rescissions package could tie lawmakers’ hands on funding bills

The Trump administration’s push for Congress to rescind $15.4 billion in spending could have unintended consequences, potentially making it harder for lawmakers to find funding for legislation later this year.

Many of the funds the administration wants to ax are unobligated, meaning they are leftover from programs that no longer exist or have not been reauthorized. 

Traditionally, lawmakers have turned to the unobligated funds when they need extra cash for legislation, either because they have already hit the maximum amount allowed by budget caps or because they don’t want to add to the deficit. 

If Congress passes the rescissions package, which is far from certain, it could make it more difficult to pass other kinds of spending legislation throughout the year.

Fiscal hawks, concerned about the explosion of deficits, think that’s a good thing.

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“That’s the hope actually,” said Sen. James Lankford (R-Ok.), a member of the Senate Appropriations Committee. By draining the pools of lapsed funding used for offsets, Lankford said, Congress will have to think twice about passing new spending.

“If those go away, that forces Congress to be able to look deeper and say, ‘OK, instead of looking at offsets, let’s look at how we’re going to balance our spending better, because some of those offsets from past times are gone,’” he said.

The White House’s decision to focus the rescissions request on non-obligated funds has put Democrats in a tough spot. Senate Minority Leader Charles Schumer (D-N.Y.) spoke out against the idea of scrapping funds from part of the Child Health Insurance Program (CHIP), which accounts for nearly half of the rescission request.

“Going after CHIP, a program that’s had broad bipartisan support, that helps working families pay for healthcare for their kids, which has the broad support of the American people,” he said Tuesday.

But many Democrats voted to use one of the same funds to offset spending in March’s bipartisan spending bill, which Schumer helped negotiate. The reason: the money in the accounts was leftover from 2017, when it was allocated to cover possible overruns. 

“We’ve used CHIP for that quite a bit, because it’s overfunded,” said Rep. Tom Cole (R-Ok.), a House appropriator.

“It’s going to be interesting to see Democrats that have used these very same things themselves to offset additional spending now argue, ‘Oh my gosh, we can’t touch any of this.’”

Several Senate Democrats are up for reelection this year in states that President Trump carried in the 2016 election, and may find it hard to vote against a proposal that cuts what amounts to unused federal funds. 

Still, some warn that the rescissions package could backfire on the White House, as it essentially spells out for lawmakers where they can find unobligated funds.

“I think the administration has to be very careful,” said Bill Hoagland, a budget expert at the Bipartisan Policy Center.

“Normally, when Congress does supplemental [bills] in the spring, they look at what the president has submitted in the budget that year for rescissions or unexpended balances, and create an offset with that, and who’s going to object?” he said.

In other words, even if the rescission package doesn’t pass, the list of funds outlined in it would become fair game when Congress wants to offset future spending. 

“You can tell the administration: ‘You proposed that, but now we can use it where we want it,’” Hoagland says. 

Indeed, some Democrats have already said the contents of the rescissions package could be used as offsets in later spending bills instead.

“Many of these adjustments could also be made in the next round of funding negotiations, maybe commencing just this fall,” says Sen. Sheldon Whitehouse (D-R.I.)

At the end of the day, neither approach is likely to affect the deficit in significant ways.

“These rescissions are for the most part relatively common, but the way they’ve been used recently is as a budget gimmick to get around and circumvent the budgetary caps,” says Marc Goldwein, the head of policy at the Center for a Responsible Federal Budget, a watchdog group. 

Moreover, the proposed $15.4 billion in rescissions represents less than half a percentage point of the overall expected spending for the year.  

Add to that the fact that Congress is often able to find clever ways to pay for its priorities, and the impact on future spending may not move the needle much.  

“In a $4 trillion budget, there’s always something you can find to offset something else if it’s really politically important enough to do,” Cole said.