House GOP Leader McCarthy and White House Propose Taking Back FY18 Funds

Pushed by discontent among some GOP fiscal hawks at the size of the recent omnibus budget bill, the White House and House Majority Leader Kevin McCarthy (R-CA) have proposed using a lesser-known provision of the 1974 Budget Act to cancel some of the funds Congress authorized the federal government to spend. This process is known as “rescission” and the President can initiate it with a formal request for Congress to rescind funding it has authorized. However, if Congress does not take action within 45 days of the President’s request, the request becomes void and Congress must disburse the full sum of funding.  It is important to note that the proposal is not receiving visible enthusiasm from the rest of Congress at this time.

The Senate GOP has expressed skepticism about the proposal and House Speaker Ryan has not taken a public position on the topic. It is unclear whether any other member of the GOP House Leadership team besides Leader McCarthy supports rescission. Democratic Members of Congress have expressed opposition to this proposal. Democrats have leverage in these discussions as they could force the GOP to take politically sensitive votes as part of the rescission process, a powerful prospect in an election year.

While it is too soon to panic about this given the difficult road ahead in the Senate for this proposal, ANCOR is closely monitoring the rescission discussion. We note that it is also possible that the discussion will go in a different direction. As noted by a snippet from Politico Pro: “The White House is also weighing whether to send a proposal for a line-item veto to Congress, which has been declared unconstitutional in the past. Trump has demanded line-item veto power to cut out spending programs preferred by Democrats.”

ANCOR will keep members apprised of any significant developments.