Federal Administration Plans Second Rescission Package

The federal administration announced it is preparing to send Congress a second rescission package, just days after Congress approved on July 17 a $9 billion cancellation of federal funding for the U.S. Agency for International Development (USAID), world health programs, the Public Broadcasting Service (PBS), and National Public Radio (NPR). A provision to rescind $400 million for the President’s Emergency Plan for AIDS Relief (PEPFAR) was removed. While it is unknown which specific programs will be included in the second rescission package, reports suggest that it will target funding at the Department of Education. Funding at other federal agencies could also be impacted.

Our partners at the National Council of Nonprofits compiled this list of programs that may be at risk. It includes all federal grant programs to nonprofits that (1) have pending payments for fiscal year 2025 funding, meaning that the Administration has not yet allocated FY25 funds to grantees; and (2) were identified in a presidential executive order or in the President's budget request as a program for which the Administration wants to claw back or rescind funds. This list does not include grants to local governments or other entities that may be passed through to nonprofits.

Lawmakers on both sides of the aisle have warned that the passage of rescission packages could undermine the bipartisan deal-making needed to enact appropriations bills, increasing the risk of a short-term stop-gap measure or a federal government shutdown when the federal fiscal year starts on October 1. While the Senate requires 60 votes to pass annual appropriations bills, forcing both parties to reach a compromise on spending, rescission packages, only require a simple majority to pass in the Senate.

This content is republished from National Council of Nonprofits, of which MANP is a member.