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House Introduces $15 Billion White House Rescission Package

May 11, 2017—House Majority Leader Kevin McCarthy (R-Calif.) May 10 introduced legislation (H.R. 3) to rescind $15 billion in federal spending, including cuts to the Children’s Health Insurance Program (CHIP), the Center for Medicare and Medicaid Innovation (CMMI), and Ebola funding, as proposed by the White House in a May 8 letter to Congress.

According to the letter from Office of Management and Budget Director Mick Mulvaney, “The rescission proposals include unobligated balances from prior-year appropriations and reduction to budget authority for mandatory programs. These proposals include rescissions of funding that is no longer needed for the purpose for which it was appropriated by the Congress; in many cases, these funds have been left unspent by federal agencies for years.” Mulvaney also notes that if enacted, the proposal would reduce the federal deficit by about $3 billion.

The $7 billion cut to CHIP includes rescissions of $5.1 billion in unobligated balances to reimburse states for certain expenses and $1.9 billion to the CHIP Contingency Fund. According to an analysis from the Congressional Budget Office, “rescinding the unobligated balances would reduce budget authority by $7 billion, but would not affect outlays, or the number of individuals with insurance coverage.”

Additionally, the bill includes $800 million in cuts to CMMI. In its proposal, OMB notes that the remaining funds would be in excess of the amounts needed to carry out CMMI activities at its current spending pace for the next years and that the institute will receive new mandatory appropriations in FY 2020. The package also includes a cut of $252 million that was designated to the US Agency for International Development (USAID) for the 2015 Ebola outbreak.

Many Democrats, including House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Charles Schumer (D-N.Y.) have expressed opposition to this proposal due to the inclusion of cuts to the CHIP program.

The package does not include any rescissions from the FY 2018 omnibus appropriations bill that the president signed in March [see Washington Highlights, March 23], and is smaller than the up to $60 billion in rescissions that originally were anticipated.

Prior to the release of the White House proposal, the AAMC May 4 joined 35 higher education organizations on a letter to House and Senate Appropriations Committee leadership expressing concern over the impact if student aid programs were to be included in the package. The letter, coordinated by the American Council on Education, cautioned that changes to federal student aid programs would be “deeply harmful to students and their families” given that funds proposed for rescission would be impounded for 45 legislative days and the start of the federal student aid year is July 1. No programs from the Department of Education were included in the rescissions package the White House submitted to Congress.

The House is expected to bring the bill to the floor for a vote as soon as next week. Congress has 45 legislative days to act on the president’s rescission request before it expires. According to press reports, the White House is considering putting forward additional rescissions requests in the coming months.

Contact:

Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org

Tannaz Rasouli
Sr. Director, Public Policy & Strategic Outreach
Telephone: 202-828-0525
Email: trasouli@aamc.org

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806
Email: jkleinman@aamc.org