Why Trump’s Spending Clawbacks Matter ... and Why They Don’t

Why Trump’s Spending Clawbacks Matter ... and Why They Don’t


In a party-line vote, the House on Thursday evening narrowly passed the White House’s proposal to claw back nearly $15 billion in previously approved federal funding that was never spent. The vote was 210-206.

Why It Matters
Trump is the first president in two decades to use the rescissions tool, and the proposed cuts represent the largest single rescissions package since 1981. President Trump and congressional Republicans touted the legislation as an important step toward cleaning up the federal budget and reducing government waste. “At least we’re still trying to have some kind of thought that we’re fiscally conscious here," said Republican Study Committee Chairman Mark Walker (R-NC).

The White House had urged lawmakers "to return this funding to the Federal Treasury rather than use it as a budgetary gimmick to offset spending elsewhere."

Democrats criticized the proposed cuts, especially some $7 billion in rescissions to funding for the Children’s Health Insurance Program (CHIP), saying they would hurt future budget decisions by eliminating funds that could be used to pay for new appropriations. “Targeting CHIP for a rescission, prevents Congress from re-investing in other priorities like child and maternal health, early childhood education, biomedical research, and our community health centers,” Rep. Nita Lowey of New York, the ranking Democrat on the House Appropriations Committee, said.

Democrats also blasted the rescissions as just a political fig leaf to cover the GOP’s $1.5 trillion in deficit-financed tax cuts. Watch for election campaign attack ads criticizing Republicans for eliminating health care funding for kids while cutting taxes for the rich.

Why It Doesn’t Matter
A Congressional Budget Office analysis released Thursday found that the rescission cuts would save only about $1.1 billion over 10 years, hardly a drop in the bucket relative to federal spending that now tops $4 trillion annually. Most of the $15 billion in unused money targeted for clawbacks would not have been spent anyway. An earlier analysis by the CBO found that the rescissions would not affect CHIP spending or coverage.

And the cuts might not come to fruition anyway. The White House urged the Senate to act quickly on the legislation, but the legislation reportedly faces long odds in the upper chamber, even though it would only require a simple majority to pass. “We’ll evaluate it,” Senate Appropriations Committee Chairman Richard Shelby (R-AL) said ahead of the House vote.