June 19, 2018

H.R. 3 – Spending Cuts To Expired And Unnecessary Programs Act

NOTEWORTHY

Background: H.R. 3 was introduced on May 9, 2018, one day after the president transmitted a rescission proposal to Congress. The bill passed the House on June 7 by a vote of 210-206. Text of the bill as it passed the House is available here. Text of the president’s rescission messages are available from the Office of Management and Budget: original and supplemental messages.

Floor Situation: The Senate may vote in relation to the motion to proceed to the bill during the week of June 18.

Executive Summary: The bill contains the presidential rescission proposal transmitted to Congress on May 8, 2018, as revised by the supplemental message.

OVERVIEW OF THE ISSUE

Section 1012 of the Impoundment Control Act of 1974 gives the president the authority to propose rescissions, or cancellations, of budget authority to the Congress. The act also provides for expedited consideration of these proposed rescissions in Congress within a certain period of time. The rescission process was used by every president from Ford through Clinton, though Presidents George W. Bush and Barack Obama did not submit rescission proposals to Congress. Before this latest proposal, presidents had proposed a total of $76 billion in rescissions, and Congress had agreed to $25 billion of that.

Once the president submits a rescission proposal, Congress has 45 calendar days to consider it, excluding periods on which both the House and Senate are out of session for longer than three days. During this 45-day period, an agency may withhold from obligation any funds that are proposed for rescission. Any bill a member introduces to enact the president’s rescission proposals will be referred to committee. If the committee does not report the bill within 25 days of the bill’s introduction, then a motion to discharge the bill from committee is in order. Debate on the motion is limited to one hour and only requires a simple majority vote. The motion to proceed requires a simple majority vote. Once on the bill, debate on the bill is limited to 10 hours. Amendments must be germane. Debate on a conference report on the bill is limited to two hours.

CONSIDERATIONS ON THE BILL

On May 8, 2018, the president transmitted a rescission proposal to Congress, and agencies began to withhold from obligation the funds included in the rescission proposal. The proposal contained 38 rescissions of budget authority already enacted.

On May 22, the Government Accountability Office ruled that two of the proposals cannot be withheld during the 45-day period provided for congressional consideration because it would violate section 1001(4) of the Impoundment Control Act. This section of the law says the act “does not supersede any provision of law which requires the obligation of budget authority or the making of outlays thereunder.” The two proposals that cannot be withheld would both rescind authority for the Federal Highway Administration and concern specific project funding from Department of Transportation appropriations from fiscal years 2001 and 2010. On June 5, the administration submitted a supplemental rescission request to Congress. Among other changes, the supplemental withdrew the two proposals GAO identified.

The proposed rescissions do not impact funding included in the fiscal year 2018 omnibus appropriations bill or the Bipartisan Budget Act of 2018.

If Congress does not pass a rescission bill within 45 days, the funds proposed to be rescinded must be made available for obligation.

NOTABLE BILL PROVISIONS

The bill as passed the House is identical to the administration’s rescission request of May 8, as updated by the supplemental request of June 5.

Notable rescissions include:

  1. Children’s Health Insurance Program, HHS – $7 billion. This total includes two rescissions in different budget accounts, but both relate to CHIP. OMB says these funds are no longer needed and that enacting this proposal would not affect the CHIP program and would not affect outlays. CBO agreed, and said this rescission “would not affect payments to states over the 2018-2028 period” and “would not affect outlays, or the number of individuals with insurance coverage.”

  2. Advanced Technology Vehicles Manufacturing Loan Program, Department of Energy – $4.3 billion. CBO reports that this rescission would lower outlays by $100 million over the 2018-2028 period. OMB, however, estimated this rescission would have no effect on outlays. This funding was originally provided for fiscal year 2009, and no new loans have been made under this program since 2011.

  3. Center for Medicare and Medicaid Innovation – $800 million. OMB states that there was $3.5 billion in this account at the beginning of the current fiscal year and that the $800 million is not needed in fiscal year 2018 or 2019. CBO reports that this rescission has no effect on outlays. The center will get a new mandatory appropriation for fiscal year 2020.

  4. Title 17 Innovative Technology Loan Guarantee Program - $684 million. OMB states that the two rescissions requested for this Department of Energy program would cancel funding provided in the stimulus bill ($523 million) and the fiscal year 2011 appropriations act ($161 million). OMB says that “enacting the rescission would support the elimination of the program.” CBO estimates that these two rescissions would lower outlays by a combined $25 million over the 2018-2028 period.

  5. Farm Security and Rural Investment Programs - $500 million. OMB states that this proposal would rescind: (1) $356 million from programs that were not extended in the 2014 farm bill; and (2) $144 million for unobligated balances from fiscal years 2014-2017 for the Environmental Quality Incentive Program. OMB states that this rescission “would have limited programmatic impact.” CBO reports that this rescission would lower outlays by $50 million over the 2018-2028 period.

ADMINISTRATION POSITION

A Statement of Administration Policy for H.R. 3 is available here; the administration supports passage of the bill.

COST

The bill would rescind nearly $14.7 billion in budget authority, which CBO estimates would reduce outlays by $1.1 billion over 10 years. The original rescission request reduced budget authority by $15.2 billion, which CBO estimated would reduce outlays by nearly $1.3 billion over 10 years.