By ACUF's Senior Fellow for Government Reform Larry Hart.

How rescissions are peeling back modest amounts of wasteful spending

As Congress proceeds to trash the Trump administration’s fiscally sound budget proposals for fiscal 2019 and implement the bloated budget deal that allows for a $300 billion increase in discretionary spending over two years, Office of Management and Budget Director Mick Mulvaney has refused to give up on spending reform.

President Trump has signed off on Mulvaney’s package of rescissions (in English: taking back appropriated but unspent funds) that total $15 billion. When you stack that up against the March budget deal, it seems like a drop in the bucket, and it is if you define the program in total dollars.

However, there are positive aspects of this move that can allow unhappy fiscal conservatives to take heart. To start, this is the first rescission package sent to Congress since Bill Clinton was president.

In addition, it is the largest single rescission package ever proposed. And the law authorizing this move allows the president to freeze these $15 billion in funds for 45 days while waiting for Congress to act. Its law also allows the Senate to bypass the filibuster rule so that a majority of 51 votes is all that’s needed for approval.

Finally, a closer look at the painstaking work Mulvaney put in to find the dozens of programs listed in the rescissions request can serve as an eye-opener for those who think that “wasteful government spending” is an overused cliche. I would call it “A Consumer’s Guide to Wasteful Government Spending.” Here are a few examples:

  • The Advanced Technology Vehicles Manufacturing Program: This 2007 corporate subsidy program, after loaning Elon Musk’s Tesla company some funds to change its sports car models to sedans, has gone nowhere. The last loan it made came in 2011. The more than $4 billion appropriated by Congress ten years ago is still sitting there. The rescission package gets rid of it.
  • The Children’s Health Insurance Program. Conservatives have continually (and will again with this proposal) been labeled “hard-hearted” for trying to place some limits on the billions of dollars thrown at this program in recent years. The result is that it’s been overfunded. The program was unable to spend $5 billion it had been given before its authorization ran out last year. There was also another $1.865 billion set aside to make payments to states that experienced higher than expected enrollment. But none of the states did, and so the money is still sitting there, unspent. The rescission package eliminates these funds as well.
  • In its 2012 ratings of Congress, the American Conservative Union pointed out that much of the $60 billion in “emergency disaster relief” after Hurricane Sandy could not be spent quickly and included funds for projects totally unconnected to the storm. Six years later, there is still $107 million in the “Emergency Watershed Protection Program” designed for Hurricane Sandy disaster relief that cannot and will not be spent. This is finally eliminated by the rescission package.

Other smaller amounts include:

  • $30 million in old, unspent funds at the Economic Development Administration, another program that has been decried in the ACU ratings and elsewhere as one of 180 duplicative government-run economic development programs and that serves as a slush fund for local politicians.
  • $53 million for a high-speed rail project between Chicago and Iowa City. Obviously, it was never created, and the $53 million for that project is still just sitting there.
  • $48 million for “Miscellaneous Highway Projects” at the Department of Transportation. What is a “Miscellaneous Highway Project”? The folks at DOT didn’t know, either, so the $48 million is still left over from 2001.

Some large lessons can be learned from these small amounts, one being that the congressional appropriations process is an abomination. Another lesson is that throwing billions of extra dollars at government agencies that cannot be spent in a timely fashion does no one any good, even if the programs themselves are uncontroversially good (and especially if they are bad).

In the past, when Congress has agreed to rescissions, it has often then turned around and spent those funds elsewhere. It must avoid that trap this time, which would make the whole effort a waste of time.

There are also indications that a “Rescissions 2.0” is in the works that would begin to tackle the most egregious spending increases in the March omnibus. That will not happen if this first package fails, making it all the more worthwhile to support this package as a first step.

Larry Hart is the American Conservative Union Foundation Senior Fellow for Government Reform.


The article was originally published in the Washington Examiner.