Fiscal 2024 already didn’t look promising of new funding for the Technology Modernization Fund. Now it looks downright hostile.

In approving the Financial Services and General Government 2024 appropriations bill, the Senate Appropriations Committee is rescinding $290 million of existing funds to pay for other priorities.

This rescind would leave the fund with an estimated $111 million instead of more than $400 million.

The General Services Administration estimated the TMF would have $401 million in unobligated funds in 2024, down from $879 million in 2023.

“I still believe taking this funding from the program is a bad mistake,” said. Sen. Jerry Moran (R-Kan.) during the bill markup today.

Moran was one of the co-authors of the Modernizing Government Technology Act that created the TMF in 2017.

He said he was planning to submit an amendment to protect the TMF, but held back when Sen. Chris Van Hollen (D-Md.), chairman of the FSGG subcommittee, included language in the bill’s report. What that language says is unclear as the committee hasn’t made the report public yet.

Van Hollen said at the markup while he agreed with Moran that the TMF “serves a useful purpose,” cuts had to come from somewhere.

“One of the challenges we faced, especially with the FSGG bill was most of the agencies we fund are for salaries and expenses. Therefore they would have seen very deep cuts in real terms if we weren’t able to take some of the funds from some of the capital budget parts,” he said. “This is always the problem, which is a lot of the things we need to be doing on the capital budget side we don’t when we are squeezed overall in terms of the budgets. That said there are a number of capital type accounts within the FSGG purview. As the process proceeds, we look forward to working with you and GSA to see if we can identify funds to put back at least some of these dollars into the TMF account.”

Moran said while he appreciated Van Hollen’s comments, he will suggest a particular account to take the money from instead of the TMF in the near future.

A Moran spokesperson declined to comment further on which account.

Need to put TMF on solid footing

Mike Hettinger, a former House oversight committee staff member and president of Hettinger Strategy Group, called the Senate committee’s decision short-sighted.

“At a time when the federal government is faced with daily nation-state efforts to breach federal networks including a high-profile hack at the hands of China announced earlier this week, we should be investing more, not less in IT modernization,” Hettinger said. “Whether you like all of the projects the TMF has funded or not, it has been critical to accelerating the federal government’s adoption of zero trust and related modern cyber capabilities. I know the Senate has expressed prior concerns about the TMF, and many of those are legitimate, but to stop it in its tracks as this action would, makes little sense to me. As we move to floor consideration and eventually conference, I hope the committee will look closely at the TMF, including the program’s successes, and come up with a plan that puts TMF on solid footing, without taking the drastic action proposed today.”

The Senate’s decision comes a few weeks after the House Appropriations Committee zeroed out funding for next fiscal year. The Biden administration requested $200 million for the TMF in its 2024 budget request. The TMF board received $50 million in 2023 from Congress.

The TMF now manages more than $750 million for 45 investments across 27 federal agencies. Of those 45, the board has made 34 of them using the $1 billion it received from the American Rescue Plan Act.

Matt Cornelius, a former Senate Homeland Security and Governmental Affairs Committee staff member, said the Senate Appropriations Committee’s actions were disheartening to say the least.

“When I was at OMB, we were incredibly vigilant about communicating the value of the TMF and why this unique program was so vital for IT modernization across agencies,” he said. “As someone who spent the past two years in the Senate, it’s fair to say that this administration has not been as vigilant in the communications and as solicitous of Congressional input on the TMF, which left the program vulnerable to the types of rescissions FSGG needed to make to comply with the budget agreement.”

Debt ceiling deal drove cuts

The TMF rescission decision is indicative of the challenges the Senate is facing with all the appropriations bill. Chairwoman Patty Murray (D-Wash.) said the deal made in the debt ceiling limiting the amount of money have been and remain concerning.

“We are moving ahead to make full use of all the resources in the debt ceiling agreement, honor its terms and write the strongest possible bills while lessening the blow of the cuts and caps, which are tough across the board, and especially on so many of our vital non-defense priorities,” she said. “We are making clear the Senate is focused on writing serious bills that can actually be signed into law and doing the most we possibly can for people back home.”

She said moving in this direction will help reduce the chances of “chaos or shutdowns,” as lawmakers continue to figure out how to manage the spending process to reduce the damage brought on by the caps.

The Senate, generally speaking, has less supportive than the House when it comes to funding the TMF.

The concern among some members has been around the use of the TMF as a slush fund.

In the fiscal 2022 omnibus appropriations bill, lawmakers asked the Office of Management and Budget and TMF board for more details on how the funding is making a difference across the government.

In the 2023 spending bill, Congress was more generous but still well below the president’s full $300 million request.

Cornelius said he hopes the markup will further motivate OMB and GSA leaders to communicate more with lawmakers about the importance of the TMF.

“Assuming OMB and GSA get the message, they can attempt to work together more effectively and convince the Senate to step back from these draconian rescissions and ensure the TMF has the capital it needs to support the critical IT and cybersecurity priorities of the Biden administration,” he said.

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