Trump asks Congress to cancel $15B in former appropriations

Rescission proposal said to reclaim ‘unused’ funds; Withdraws $174M in funds to distressed neighborhoods

      President Donald Trump has asked Congress to approve rescissions of $15.4 billion in funds that were previously appropriated and signed into law.

      Some of the funds have been unused for years, or expired. But others are current.

      For example, Trump’s rescission package targets $174 million allocated to the Treasury Dept.’s Community Development Financial Institutions (CDFI) Fund, of which $151 million was appropriated for fiscal 2018 for Capital Magnet Fund grants. Another $23 million would be cut from CDFI’s Bank Enterprise Award program.

      The CDFI money is used to support grants and loans for affordable housing and other programs in economically-distressed communities, including loans and financial services for minority-owned firms.

      “Cuts to the CDFI Fund and the Capital Magnet Fund will have a significant impact on lending to minority and women-owned businesses and those in economically disadvantaged areas,” Women Impacting Public Policy said in a statement.

      The American Bankers Association, and other groups for banks and credit unions, are opposing the rescissions to CDFI, which they say is an important engine of economic activity in poor inner city areas.

      “The administration has characterized the items in the rescission package as unspent money that was unused and not needed; and thus no harm would be done by clawing back the money. This is not accurate,” the banking groups wrote in a letter to Congress.

Rescissions history

      Under law, presidents are allowed to ask Congress to rescind--or reclaim--funds that had been appropriated in the past and were still available to be claimed. President Clinton was the last to get his rescissions approved.

      Trump made his request to Congress on May 8, and Congress has 45 days to act on the request before it expires. During that time, funding in the targeted accounts is frozen.

      Rescissions can be approved in the House and Senate with simple majority votes. Senate passage of Trump’s proposal is uncertain, with some GOP senators concerned about revisiting approved spending.

Targeted programs

      Trump’s rescission package targets 38 programs, including these cuts:

• $7 billion from the Children’s Health Insurance Program, of which $5 billion has expired and $2 billion from a contingency fund the administration says will be unnecessary;
• $4.3 billion from the Energy Dept.’s Advanced Technology Vehicles Manufacturing Loan Program;
• $800 million from the Center for Medicare & Medicaid Innovation program;
• $683 million from the Energy Dept.’s Innovative Technology Loan Guarantee Program;
• $356 million from USDA’s Natural Resources Conservation Programs;
• $252 million for Ebola virus prevention and response;
• $220 million from the Nonrecurring Expenses Fund of the Health & Human Services Dept.;
• $179.1 million from the Federal Highway Administration;
• $157 million from USDA’s Watershed and Flood Prevention programs;
• $151 million from the Treasury Dept.’s CDFI Fund - Capital Magnet Fund;
• $107 million from funding for Hurricane Sandy relief;
• $53.4 million from DOT’s Federal Railroad Administration;
• $50 million from USDA’s Rural Business-Cooperative Service;
• $46.5 million from DOT’s Federal Transit Administration;
• $37 million from the USDA’s water and wastewater programs in rural America;
• $30 million from the Commerce Dept.’s Economic Development Assistance Program, which provides grants in low-income communities; and
• $22.7 million from Treasury Dept.’s CDFI Fund- Bank Enterprise Awards.

More information:
POTUS Transmittal Memo: https://bit.ly/2K5YZlr
Banks’ and credit unions’ response: https://bit.ly/2GEl9cA

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