Trump's Request to Cancel Spending Has Shot at Passing Congress

(Bloomberg) -- President Donald Trump’s request to Congress to cancel $15.4 billion in unspent government funds has a strong chance of clearing Congress because it doesn’t touch this year’s bipartisan spending bill.

White House Budget Director Mick Mulvaney said House Republicans reacted positively to the request when he presented it Tuesday morning behind closed doors. Mulvaney told lawmakers that the White House will send a separate request later in the year to cancel some funds from the $1.3 trillion 2018 omnibus spending bill, an idea that has met resistance from Senate Majority Leader Mitch McConnell.

McConnell of Kentucky indicated openness to Tuesday’s proposal, telling reporters that if the House can pass it, the Senate will “take a look at it.” He said it wouldn’t renege on the 2018 spending bill.

The proposal is a Republican effort to claim fiscal responsibility after a deficit-increasing tax cut and higher spending in the omnibus bill. The effort comes as the GOP is struggling to keep control of the House and Senate in November elections.

“We will get the rescissions package passed,” House Majority Leader Kevin McCarthy of California told reporters after the Tuesday meeting.

No House Republicans came out against the $15.4 billion request during the meeting, lawmakers said.

‘No Pushback’

“There was no pushback whatsoever. In fact people said they want more," said Representative Mark Walker of North Carolina, who leads the conservative Republican Study Committee. He said the White House has more work to convince Senate Republicans.

The cuts can be adopted with a simple majority in the House and Senate, meaning Republicans could pass it without Democratic votes.

One obstacle in the Senate could be Alaska Republican Lisa Murkowski.

“I don’t understand why we would go after CHIP," she said Tuesday, referring to the Children’s Health Insurance Program. "It makes no sense to me.”

Under the rescission process, lawmakers can exclude some items from the president’s request.

The request would cancel $7 billion from prior years for CHIP, including $5 billion in funds that expired in September. The March spending bill canceled other leftover CHIP funds and used the money to boost domestic spending elsewhere. That bill was supported by lawmakers from both parties.

“These Republican rescissions show the hypocrisy of a GOP Congress that insists on tight budgets for children and families while handing enormous, unpaid-for giveaways to corporations and the wealthiest,” House Minority Leader Nancy Pelosi of California said in a statement.

She told a Washington audience Tuesday morning that the second rescission request has “no chance”of passing, but she didn’t make a similar declaration about the first one.

Other unspent funds that would be canceled include $4.3 billion for a vehicle technology program and Energy Department loans, funds for Obamacare, the 2015 Ebola outbreak and railroad retiree benefits.

Smaller Request

The $15 billion request is scaled back from the administration’s initial goal of cutting a larger amount of domestic funds from the 2018 spending bill signed by Trump in March, which has proven unpopular with Republican voters. The goal is to keep Congress from tapping unspent money for new purposes as has happened in the past, a senior administration official said Monday.

Senate Appropriations Chairman Richard Shelby, an Alabama Republican, said in a Monday interview that he’s open to a spending-cut plan though he hadn’t seen the details.

“If it is frivolous stuff that we can get rid of and save the taxpayer money, then we ought to do it,” Shelby said. He said he doesn’t favor reopening the 2018 spending bill.

“We’ll take a look at it,” said House Appropriations Chairman Rodney Frelinghuysen of New Jersey, noting that the plan would address prior-year funds. He had previously said he strongly opposed cutting current-year spending because it would break trust with Democrats and make it harder to reach future spending deals.

Partly as a result of the tax-cut law, the annual federal deficit is projected to increase from $665 billion in 2017 to $1 trillion by 2020, according to the Congressional Budget Office.

Measured against the $1.9 trillion tax cut, the proposal to cancel $15.4 billion in unspent funds will do little to reduce that deficit.

“Today’s specific rescission package will have little effect on the budget deficit since the proposed cuts are relatively small and most are to funds that will never be spent anyway,” said Maya MacGuineas of the Committee for a Responsible Federal Budget. “But every little bit helps.”

©2018 Bloomberg L.P.