Senate panel outpaces House in tech spending plans, including TMF

The Senate Appropriations Committee advanced several funding bills on Thursday, including allocations to several key government technology accounts. 

Lawmakers would provide the Technology Modernization Fund  — the government’s central revolving fund meant to help significant agency IT projects cross the finish line — $25 million under the Senate bill.

That’s less than the administration asked for — $75 million — but more than their House counterparts allocated in their bill that passed in June, under which the TMF would see no new funding. 

Lawmakers also decided not to add to TMF funding in last year’s fiscal 2024 funding package, where they instead clawed back some of the $1 billion investment in the TMF approved under the American Rescue Plan Act.

The $75 million the administration is seeking “would continue to support a more rapid transition of legacy systems and the adoption of more secure commercial technology,” the White House wrote in a veto threat of the House bill last week. “To date, the TMF board has received more than 250 proposals from agencies [totaling] over $3.9 billion in requested funds, far exceeding the amount of resources available.”

The General Services Administration's budget request for 2025 noted that the TMF was “on track to allocate the vast majority of current funds.”

The Senate report accompanying the bill also asked GSA to provide lawmakers with a list of agencies that have non-recurring expense funds or working capital funds, which allow agencies to use expired balances on investments like tech. 

The committee also asked for “statutory language options for the committee to pursue regarding pass-the-hat authority for TMF that will not impact NEF and/or WCF authorities for agencies.”

The report notes that the committee “supports GSA’s work in exploring alternative funding mechanisms for TMF, which could provide much-needed authorities to agencies without NEFs and/or WCF.”

The Senate has had “lots of questions and concerns about TMF” over the years, said Mike Hettinger, a former senior congressional staffer who lobbies on behalf of technology companies, adding he was “surprised” to see the committee include TMF funding at all. 

When the revolving fund was originally established in 2018, the intent was that agency reimbursements would help keep the fund solvent. Whether that’s happening in practice has long been a concern for lawmakers, however, who included new reimbursement requirements — which had been relaxed by the Biden administration — in the TMF reauthorization bill that recently passed a Senate committee. The fund is currently set to expire in 2025.

The Senate bill also includes $30 million for the Information Technology Oversight and Reform account at the Office of Management and Budget, which funds the Office of the Federal Chief Information Officer and the U.S. Digital Service. 

The administration requested upwards of $44 million. 

USDS has been using $200 million it received from ARPA in recent years, according to its budget request, but that money expires at the end of this fiscal year. Lawmakers also clawed back $10 million of that funding in the fiscal 2024 package. 

The administration’s funding request is meant to move the White House-based tech team back to using annual appropriations, that request states. 

The House’s version of the bill would give the OMB fund $8 million, in addition to a new reimbursement authority for USDS to get up to $30 million from agencies — an authority not included in the new Senate bill. 

The White House said that the House proposal “could potentially result in the layoffs of 251 out of 278 staff across USDS and [OFCIO]” in its veto threat. 

Finally, GSA’s Federal Citizen Services Fund — meant to support governmentwide digital services — would see $90 million in the Senate bill, an improvement on the $55 million allocated in the House bill, but slightly less than the $97 million in the agency’s budget request.

That fund also gets reimbursements from federal agencies; the Senate bill would set the aggregate funding cap at $250 million, $100 million more than the House bill provided.

The House and Senate appropriators will have a short calendar in which to reconcile and pass spending bills after the August recess. Hettenger said it's widely expected that Congress will opt for a continuing resolution by the end of the fiscal year to avoid a government shutdown ahead of the November elections.