White House revises spending ‘claw-back’ proposal

The White House on Tuesday sent a revised, reduced proposal to claw back federal spending to Capitol Hill, eliminating or adjusting some $896 million from its original request.

The House is expected to review the changes and could vote on the rescissions package as soon as this week. If passed, the package would nix roughly $14.8 billion in budget authority, down from the roughly $15.4 billion in the original White House request.

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The administration withdrew plans to cut four programs from the original request, pertaining to the Federal Highway Administration, the Environmental Protection Agency and the United States Agency for International Development. It also made minor adjustments to rescission requests affecting the Department of Agriculture, the Department of Housing and Urban Development, the Department of Labor, the Treasury Department and the Corporation for National and Community Service.

The White House sent over its initial requests in May following discussions between House Majority Leader Kevin McCarthy (R-Calif.) and President Trump on how to roll back spending.

While fiscal hawks applauded the move, which comes after the passage of a massive $1.3 trillion spending omnibus earlier this year, the proposal has faced some pushback from a number of moderate Republicans and Democrats, with critics fearing it could hinder future bipartisan negotiations and eliminate necessary slush funds.

Senate Majority Leader Mitch McConnell (R-Ky.) has signaled little interest in moving a rescission package.

Requests targeting unobligated funds within the Children’s Health Insurance Program (CHIP) and the White House’s request to scrap remaining funds from an effort to combat Ebola in 2014-2015 proved to be the most controversial among House members. While the revised request eliminated the requests to slash the unused Ebola response funds, the call to rescind unused CHIP funding remains intact.  

Democrats have been highly critical of the call to cut $7 billion from two CHIP accounts, arguing the unused funds could prove to be problematic should enrollment turn out to be higher than anticipated. But McCarthy has dismissed the criticism, noting the nonpartisan Congressional Budget Office (CBO) confirmed no one’s coverage would be dropped late last month.

But the CBO analysis cut both ways. For all the pomp and circumstance around the proposal, CBO found that it would only decrease actual spending by around $1 billion over a decade, largely due to the proposal’s focus on unobligated funds.

The decision to withdraw rescission requests from the Federal Highway Administration likely reflects a concern that the Senate parliamentarian would not allow the move. The Government Accountability Office flagged that portion of the proposal last month.

House GOP leadership is currently whipping the proposal as pressure mounts on Republicans to slash spending ahead of the midterm election cycle.

This article was updated to more precisely reflect the numbers in the request.