Budget

Democrats warn layoffs ahead as House GOP proposes agency spending cuts

Democrats say an appropriations bill with 10% spending cuts to covered agencies would leave no choice but to implement staff reductions to make ends meet.

Drew Friedman@dfriedmanWFED

June 5, 2024 5:25 pm

5 min read

As House appropriators outline plans to make steep government spending cuts for fiscal 2025, Democrats are warning that reduced agency budgets would lead to federal employee layoffs, and by extension, worsening federal services.

The fiscal 2025 financial services and general government appropriations bill is now heading to the full appropriations committee for consideration. Members of the GOP-led House Appropriations Financial Services and General Government Subcommittee advanced the legislation — along party lines and without amendments — during a markup Wednesday morning.

But Democrat subcommittee members opposed to the spending cuts said they’re concerned about the ability of the relatively small agencies included in that specific appropriations bill to handle large budget cuts.

“Our agencies often have smaller budgets, and thus less flexibility to deal with the cuts,” Rep. Steny Hoyer (D-Md.) said Wednesday during the subcommittee’s markup of the legislation. “Larger agencies under the jurisdiction of other subcommittees can scale back grant programs and shift funding around to make ends meet. It’s tough, and perhaps may not be appropriate, but it is easier than this bill.”

Hoyer warned that the House GOP bill, as is, would leave many agencies with no choice but to implement staff reductions to make ends meet.

“Our agencies have to lay off staff, severely undermining their ability to function at the most basic levels,” Hoyer said. “That has direct consequences on the American people.”

Under the 2024 enacted budget, which included significant spending cuts, some agencies are already limiting new hires and in some cases considering plans to reduce their workforces. The State Department and the Department of Veterans Affairs, for example, are looking to make staffing cuts in the Foreign Service and the VA health care workforce.

The House appropriations legislation comes in stark contrast to the White House budget request proposed in March. House Republicans proposed a discretionary spending allocation totaling $23.6 billion, which is close to 20% below the Biden administration’s request. The bill would cut spending to 10% below the enacted level for 2024.

Subcommittee Ranking Member Rosa DeLauro (D-Conn.) called the spending levels and several GOP policy riders “unacceptable.”

That steep of a budget cut, Hoyer added, “belies the importance of the agencies for which we appropriate money.”

For the government’s lead agency on all things workforce, House Republicans’ spending plans would give the Office of Personnel Management a budget of $477 million for 2025. It’s an increase of $29.1 million over the enacted 2024 level — but the number still falls $31.4 million short of the White House’s request for the coming fiscal year.

At the same time, House Republicans, in the bill are calling for OPM to specifically aim to modernize IT and strengthen the government’s acquisition workforce.

The bill doesn’t include any language related to the federal pay raise for 2025, appearing to align with Biden’s 2% raise proposal for most General Schedule employees next year.

The draft bill also includes IRS spending cuts and proposes completely defunding IRS’ free Direct File platform. The legislation would cut the budget for IRS for 2025 to $10.1 billion, which is $2.2 billion below the enacted level for fiscal 2024.

The cuts would be most severe for IRS enforcement, which would see a $2 billion reduction in funding, House appropriators explained in a summary of the draft 2025 spending bill. Hoyer took particular issue with that component of House Republicans’ plans for IRS.

“The authority to transfer funds are not provided for in this bill,” Hoyer said. “In other words, we’re cutting our collection department by $2 billion. That’s the very essence of trying to be able to afford that which we’re buying and not paying for.”

The General Services Administration would see spending cuts for its use of the Federal Buildings Fund in 2025, according to the draft legislation. Lawmakers are calling for a cap of $8.9 billion to come out of that fund, which is nearly $1.8 billion below the 2025 budget request.

In one policy rider on the appropriations bill, House Republicans rejected the Biden administration’s request of $3.5 billion to build a new FBI headquarters in Greenbelt, Maryland. The draft bill would also withhold current funds allocated for the massive construction project.

Already, GSA has said construction on the new building will take more than a decade. Construction on the new FBI headquarters is not expected to begin until 2029, and FBI employees would not be working out of the new space until 2036. But in the spending bill, House Republicans said GSA should either continue operating out of the current building, or choose an existing, federally owned building in Washington, D.C., as a new headquarters.

The Executive Office of the President would receive $815.5 million for 2025, according to the spending bill. That’s $105.6 million below the budget request. As part of that appropriation, the Office of Management and Budget would get $126 million.

Several of the bill’s other policy riders specifically target Biden administration policies that Republicans have opposed for years. The legislation in its current form would ban the implementation of President Joe Biden’s executive orders on climate change, as well as diversity, equity, inclusion and accessibility (DEIA).

Additionally, the Small Business Administration would not be able to fund any climate change initiatives under the bill. In total, the House subcommittee proposed about $854.1 million for SBA, a cut of $117.1 million from the White House’s request, and $187.6 million below the enacted level for 2024.

Once the Senate subcommittee releases and votes on its version of the draft appropriations bill, House and Senate lawmakers will have to reconcile any differences between the two versions of the bill before voting on it, or sending it to the president’s desk for a signature.