President Revives Dormant Process to Target Dormant Spending

Today, President Trump revived a long dormant process to rescind funds, submitting to Congress a list of reforms to 38 programs that would reduce budget authority by $15 billion. Most of the rescissions are aimed programs with funds left unspent after several years. Congress will now have 45 days to take up the package.

This stand-alone process for considering rescissions has not been used since President Clinton in 2000. Congress regularly rescinds funding within broader legislation, but typically not with the result of reducing net spending. The money is instead redirected to other programs. For example, this year’s $1.3 trillion omnibus spending bill – whose price tag inspired the White House to revive the rescission process – included over $2 billion in rescission of funds left over from previous years, which helped offset a portion of the higher spending in the legislation.

The President’s rescission package:

  • Would enact a reduction in unneeded spending for its own sake rather than as a means to offset higher spending in future legislation – a rarity in Washington.

  • Is a small but symbolically important step to prioritize taxpayers over the perpetual recycling of unobligated funds into future spending hikes. In and of itself the amount of savings the President put on the table is quite small: $15 billion in authorizations. Since many of the accounts targeted haven't spent their funding for several years, the amount of actual outlay savings is estimated to be about $3 billion, which amounts to just 0.4 percent of this year’s projected deficit, and 0.07 percent of total outlays. If Congress can’t take seriously such a modest reduction in largely left-over funds, it will be awfully difficult to tackle larger challenges like entitlement reform.

  • Will deprive big-spending Members of Congress of gimmicks in the usual bag of tricks to finance expansions in government. Unobligated funds are routinely used to help finance spending increases elsewhere in the budget.

  • Gets the ball rolling on spending reform. The White House announced that it plans to follow up with an additional rescission effort sometime later this year to target a portion of the spending in the omnibus bill. Thus, today’s package is just a modest first step in getting a handle on wasteful spending.

Earlier this year, through the Bipartisan Budget Act of 2018, lawmakers boosted spending and overrode the previously enacted budget caps – the most effective means of limiting spending. The President’s rescission package represents programmatic reforms to target wasteful spending throughout the budget and rein in the deficit, much more of which will be necessary to get a handle on our long-term debt challenges.