Trump Plan to Cancel $15 Billion in Unspent Funds Passes House

(Bloomberg) -- The U.S. House overcame Republican divisions to approve President Donald Trump’s request to cancel about $15 billion in unspent funds left over from previous years.

The measure, which passed on Thursday night by a vote of 210 to 206, was meant to assuage conservative anger over the $1.3 trillion fiscal 2018 spending bill approved in March.

The legislation now heads to the Senate where it has a chance at passing under a 1974 budget law that allows such presidential requests to pass with a simple majority. That could allow Republicans to bypass Democrats -- if they all stick together.

Senate Republicans Susan Collins of Maine and Lisa Murkowksi of Alaska have indicated they may oppose the measure. Senate Appropriations Committee Chairman Richard Shelby of Alabama told reporters his committee will "evaluate" the bill once it passes the House.

Request Revised

Trump’s initial request in May ran into resistance from some House Republicans. To address those concerns, the administration agreed to restore funding for Ebola outbreaks, water quality improvements and Hurricane Sandy repairs after the administration initially proposed canceling the funds.

Members of the Appropriations Committee, which is reluctant to give up its power of the purse, went along with the revised request after conservatives threatened to vote against 2019 spending bills if the spending claw-back wasn’t passed.

"The bottom line is that it is not in the interest of the taxpayer to let outdated, unnecessary dollar balances sit idle, especially when the nation is facing such high debt and deficits," said Chairman Rodney Frelinghuysen of New Jersey said on the House floor.

Appropriators typically cancel unspent funds from previous years to increase spending in the current fiscal year without hitting a budget cap. While the Trump request only affects $1 billion in actual spending, conservatives argue it has a larger effect since it will prevent the Appropriations Committee from using the unspent funds in this way during fall spending bill talks.

Democrats opposed the measure, arguing that cuts in the bill to unspent children’s health care funds should be re-purposed for other social programs rather than given back to the Treasury.

The White House has said it will send a second cancellation request targeting funds in the 2018 omnibus spending bill later this year. That request is expected to be dead on arrival in Congress because Republican leaders argue it would make future bipartisan deals with Democrats impossible.

To contact the reporters on this story: Erik Wasson in Washington at ewasson@bloomberg.net;Katherine Scott in Washington at kscott85@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Justin Blum, John Harney

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