Congressional auditors delivered some good news for the White House and House GOP leaders on Tuesday, saying in a report that President Donald Trump’s $15.2 billion spending cuts proposal mostly meets tests laid out in the 1974 statute establishing the “rescissions” process — even as leaders decided to put off consideration of the package until next month. 

The Government Accountability Office found that two Transportation Department accounts slated for $134 million in cuts can’t legally be “impounded,” or blocked by the administration during the initial 45-day period after submission of the requests to Congress. The rest of the cuts, including rescissions from mandatory spending accounts like the Children’s Health Insurance Program, are allowed to go forward under the 1974 law establishing the modern rescissions process, according to the GAO.

The 45-day period began on May 8, and a bill was later introduced in the House to rescind the funding. June 22 is the deadline for Congress to act on the rescissions package based on the current legislative calendar, or it loses special procedural protections. For example, a qualifying rescission bill cannot be filibustered in the Senate.

The GAO findings are likely to play a role in the Senate parliamentarian’s decision on whether the rescissions measure — should it pass the House — would qualify for the expedited procedures.

The two proposed transportation rescissions highlighted by the GAO include $85.9 million in prior year balances to carry out earmarked highway projects, and $48 million in unobligated balances that the White House said are related to miscellaneous highway projects.

The Office of Management and Budget instructed the Transportation Department to withhold the full amount of funds in both cases, and the agency did so.

The GAO, however, said the appropriation of those funds does not provide the Transportation Department any discretion over how to obligate the money. As a result, the funds are not allowed to be withheld from obligation while Congress considers the rescission proposal.

Julie Matta, managing associate general counsel at the GAO, said in a statement that the funds in the two transportation accounts cannot be withheld because they are “line-item appropriations for specified transportation projects over which the Department of Transportation has no discretion.”

In the report, the GAO pointed to a provision of the budget law called the “fourth disclaimer,” which states that nothing in rescissions law “shall be construed as … superseding any provision of law which requires the obligation of budget authority or the making of outlays thereunder.”

The GAO said its review of OMB’s apportionments show that for 32 of the rescission proposals, the office instructed agencies to withhold an amount equal to the proposed rescission. For six of the proposals, OMB instructed agencies to withhold an amount less than what was proposed.

The office did not instruct the Department of Health and Human Services to withhold funds for the two most controversial proposed rescissions — a $5.1 billion cut in CHIP funds for states and a $1.9 billion cut in the CHIP contingency fund, which provides payments to states that experience funding shortfalls due to higher than expected enrollment. The administration has said the money is not necessary and will not be spent.

A question of timing

While the analysis is helpful for the White House’s case in getting the 1974’s procedural protections to apply, it may not help get the votes to pass the measure in the House, where GOP moderates are balking at the CHIP cuts.

Since Republican leaders can’t rely on any Democratic votes to pass the cuts package, they can afford to lose only 20 GOP members on the rescissions vote. House Republican Study Committee Chairman Mark Walker of North Carolina, who supports the measure, said Monday he expects the vote to be  close.

Such dynamics led House GOP leaders to put off a vote on the package until at least June.

White House officials are considering making changes to the package that could ease members’ concerns about rolling back unspent funds for children’s health programs, combating the Ebola virus and other issues.

House Majority Leader Kevin McCarthy, however, said the chamber’s agenda in the run-up to the Memorial Day recess is the reason for the delay on the rescissions bill.

“The only reason it’s not on the floor this week is you had … the farm bill and others,” the California Republican said late Monday afternoon. “And now we’ve got so much more going on, so we’re just working through that. It’s just how much you got on your plate.”

Other sources said the Trump administration was expected to send Congress an update to the proposed rescissions package that would take some of the political bite out of the measure. Some GOP members are wary of taking a potentially damaging vote just six months before the midterm elections.

A Democratic aide also ventured that Republicans are likely to remove a proposed $10 million rescission from the EPA because of opposition from Senate Republicans. The unobligated funds are targeted for competitive water quality research and support grants. OMB says those grants duplicate other federal programs. 

Any potential changes, which could also help Republicans avert procedural issues, are not expected to be finalized this week, sources said. Lawmakers are off next week for Memorial Day and will return to the Capitol on June 5. McCarthy, a supporter of the package, had previously promised a vote on the legislation before the recess.

Though sources said House leaders were working with the White House on changes, McCarthy said he is not expecting an amendment from the administration. “I do not know of an amendment,” he said. “If it comes, then I’ll tell you.”

Changes to the bill could originate in the House Rules Committee, in theory, though McCarthy said the package is likely to remain intact. “No, I think we’re fine with it,” he said.

Walker, who backs the rescissions package, said he hadn’t heard of any specific changes. “There’s a little bit of conversation, but nothing that we’ve heard that’s definitive from the White House,” Walker said, adding that the current whip count was “pretty close.”

Ebola resurgence

The initial White House request sent to Congress on May 8 calls for rolling back $7 billion in leftover funds from the popular Children’s Health Insurance Program and $252 million that was appropriated in the past to combat Ebola abroad, among other cuts totaling $15.2 billion in budget authority.

The Ebola provision could be changed or the funds might be left untouched in the new rescissions plan, aides indicated. The deadly virus has made headlines recently as it spreads in central Africa, killing 27 people in the Democratic Republic of the Congo so far and leading Democrats and health advocates to criticize the proposed anti-Ebola rescission as irresponsible.

The CHIP rescission might also be curbed, according to those familiar with the discussions.

The current measure would not touch any new fiscal 2018 appropriations from the March omnibus bill, and the nonpartisan Congressional Budget Office has said the CHIP money and most of the other funds in the package would not actually be spent.

The CBO estimated the rescissions would reduce actual spending or outlays by $1.2 billion over a decade, while OMB said it would save $3 billion over that period.

Punting the vote on rescissions until June will likely bump it up against the 45-legislative day deadline to preserve its procedural protections. 

In a letter to Speaker Paul D. Ryan earlier this month, House Minority Leader Nancy Pelosi and Appropriations Committee ranking member Nita M. Lowey of New York said the protections will expire June 22. A Democratic aide said that date was based on GAO guidance and would hold true unless the House breaks for more than three days without holding a pro forma session.

Rep. Kevin Yoder of Kansas, a member of the House Republican whip team, said the rescissions package was not discussed at the group’s Monday evening meeting, given the focus on the farm bill for the time being. But he characterized some general concerns within the GOP ranks due to the fact that rescinded funds wouldn’t be available later to offset new spending during the fiscal 2019 appropriations process.

“I think people had a problem with optics, some of the programs. Although the funds are maybe unusable due to them being locked in previous years [of authorization], they’re programs that are very important to a lot of our constituents, and they want those funds to be allowed to be rolled over into the same programs,” said Yoder, a member of the Appropriations Committee.

“And so I don’t know what the result of it’s going to be, but I think there’s some that feel it’s not a very productive endeavor,” Yoder said. “It doesn’t [reduce] real government spending because those funds weren’t going to be spent anyway.”

Walker had a different take, saying that cutting funds that were unlikely to be spent should not be a difficult vote for members.

“There’s tough votes around here. That ain’t one of ’em,” he said.

Lindsey McPherson and Kellie Mejdrich contributed to this report.