The Senate Appropriations Committee voted on July 13 to approve a spending bill that would claw back from the Technology Modernization Fund (TMF) $290 million of money that was approved by Congress for TMF in prior years.

The TMF, which is administered by the General Services Administration (GSA), was created in 2017 under the Modernizing Government Technology Act to provide money to Federal civilian agencies to undertake tech modernization projects. The fund in recent months has been spending down some of the $1 billion cash infusion it received from Congress in 2021 under the American Rescue Plan Act.

The proposed clawback of already-approved funding is contained in the Financial Services and General Government Appropriations Bill (FSGG) for fiscal year 2024 approved by the committee by a vote of 29-0.

In the TMF section of the FY2024 FSGG bill, the committee proposed no new funding for TMF next year.

Earlier this year, the Biden administration proposed $200 million of new money for TMF in FY2024. The House Appropriations Committee earlier this week approved its FY2024 spending bill that includes no new TMF funding.

According to the FSGG bill approved by the Senate Appropriations panel on July 13, “Section 636 rescinds $290,000,000 from the American Rescue Plan from the Technology Modernization Fund.”

“The Committee notes that the TMF received $1,000,000,000 in the American Rescue Plan Act of 2021 (Public Law 117–2),” the Senate Appropriations Committee said.

“The Committee supports the goals of the TMF, but believes the Fund should require full reimbursement over time from funded agencies as envisioned in the Modernizing Government Technology Act of 2017 [MGT] Act so that the fund can be self-sustaining,” it said.

During the coronavirus pandemic, TMF has been funding investments in Federal agency IT projects under arrangements that require less than 100 percent reimbursement.

In the Senate FSGG bill, the approved legislation tells GSA to “report to the Committee no later than 60 days after enactment of this act on the reimbursement level required for each investment that has been funded to date.”

One source close to the TMF funding debate said today that any movement to require 100 percent reimbursement of TMF funding awards to Federal agencies would be very likely to greatly reduce agency appetites for seeking funding awards.

It’s not exactly clear how much money TMF has left in its coffers right now, and how much it would have if the recission takes effect.

Earlier this month, TMF announced $50 million of new awards to five Federal agencies to help improve digital customer experience and data protection efforts. Including those awards, TMF had made a total of about $750 in funding awards to support 45 projects across 27 Federal agencies. Since its inception, TMF has received a total funding of about $1.45 billion, leaving it with roughly $400 million unspent.  The $290 million recission approved by the Senate Appropriations Committee would leave the fund with somewhere in the neighborhood of $100 million.

Rep. Gerry Connolly, D-Va., a cosponsor of the MGT Act that created TMF and the prime mover in Congress for getting the $1 billion infusion in 2021, expressed outrage with the Senate Appropriations Committee’s vote.

“For a government that spends more than $100 billion a year on information technology (IT), 80 percent of which is on operations and maintenance of existing IT, including legacy systems, it is inconceivable that we would move to strip the very program that meaningfully modernizes Federal IT,” Rep. Connolly said.

“The Technology Modernization Fund is an innovative, agile program that has proven to deliver greater security, efficiency, and operability,” he said. “Furthermore, the revolving nature of the fund allows the American people to reinvest secured cost savings over and over again.”

“I implore my colleagues to reconsider the rescission of these funds and join the administration’s call to increase our investment into the TMF,” the congressman said.

Ross Nodurft, executive director of the Alliance for Digital Innovation trade group, warned that “rescinding TMF funding and removing investments in modern, cloud technology and zero trust cybersecurity environments will negatively impact the effectiveness and security of our government agencies and their ability to service citizens.”

“The TMF is helping agencies make investments that have been decades in the making, due – in part – to Congress continually using IT line items as a bill payer,” he continued. “To see this happen today, as more and more of our core government services and defenses move into a digital environment, is disappointing and reckless.”

“We encourage the Senate to restore all of the rescinded funding and continue to provide the flexibility to invest in IT modernization, cybersecurity, and customer experience,” he said.

The ultimate outcome of TMF funding for FY2024 is still far from certain, as the House and Senate still have to approve full-year spending bills on their own, and then negotiate on a unified version of final spending numbers that both chambers will have to approve.

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John Curran
John Curran
John Curran is MeriTalk's Managing Editor covering the intersection of government and technology.