On May 8, President Trump submitted a request to Congress to rescind, or return to the U.S. Treasury, $15.4 billion of funds from previous fiscal years. This request would not impact spending allocated under the recently passed FY 2018 omnibus spending bill. According to a report from the Congressional Budget Office (CBO), most of the targeted funds in the rescission request would not have been distributed because they are no longer necessary, or they could not be spent by a given agency because their authorization period has lapsed. In sum, CBO estimates the rescission package will only reduce the federal deficit by $1 billion over the next decade.
Since the majority of the funds targeted in the request could no longer be spent, it is unlikely these rescissions will significantly impact county budgets. A few programs, outlined below, could see smaller funding amounts for grant programs, which could result in fewer grants being made available to counties.
Following President Trump’s request, Congress now has 45 days to act before the request expires, during which time the requested funds are frozen. If Congress fails to act or votes down the proposal, the appropriate agency must spend any allocated funds that are still authorized, and a rescission cannot be proposed again.
Leadership in both chambers of Congress is still considering the rescissions request from the administration, and a path forward remains unclear. NACo will continue to work with Congress to ensure county priorities are reflected in the annual appropriations process. Below are the programs included in the rescissions package that could impact county governments.
U.S. Department of Agriculture
- The proposal would rescind $500 million from USDA Farm Security and Rural Investment Programs (funded at $1.5 billion). CBO estimates this rescission will lower program spending by $50 million over the next ten years.
- The proposal would rescind $157 million in prior year balances for USDA Watershed and Flood Prevention Operations, which CBO estimates will result in a reduction of $51 million over the next ten years.
- The proposal would rescind the entire amount for USDA’s Rental Assistance Program for FY2017 (funded at $40 million). This program provides rental assistance to low and very-low income rural residents.
- The proposal would rescind $2 million in carryover balances from the Community Facilities program (funded at $10 million) which provide assistance to rural communities to develop essential public facilities including schools, hospitals and police stations.
- The proposal would rescind $15 million in carryover balances from the Value-Added Producer Grant Program (funded at $24 million) which helps small businesses market their agricultural products.
- The proposal would rescind $36 million in unobligated balances from the Biorefinery Assistance Program (funded at $92 million) which helps promote the production of biofuels, renewable chemicals and bioproducts.
- The proposal would rescind the entire $13 million for USDA’s High Energy Costs Grant Program (funded at $13 million) which helps counties to improve energy generation, transmission, or distribution.
- The proposal would rescind $37 million in carryover balances from the Water and Wastewater program (funded at $40 million) which provides grants and loans to counties of 10,000 or less to develop clean drinking water and wastewater facilities.
U.S. Department of Housing and Urban Development
- The package includes a $41 million rescission from the Public Housing Capital Fund from prior year balances made available in 2017.
U.S. Department of Commerce
- The package includes a $30 million rescission from Economic Development Assistance Programs (EDAP) from the prior year balances made available in 2017, which CBO estimates would reduce total program funds.
U.S. Forest Service
- The package includes a $16 million rescission of unspent Forest Service land acquisition funds. This could impact counties that are in the process of selling possible inholdings to the Forest Service or looking to conduct a land swap.
U.S. Department of Transportation
- The proposal would rescind $86 million from the Federal Highway Administration (FHA)’s Surface Transportation program and $48 million from FHA’s Miscellaneous Highway Trust Funds.
- The proposal would rescind $46.5 million from the Federal Transit Administration’s Formula Grants from FY 2005 and prior fiscal years.