The Forgotten Funds Act rescinds unobligated discretionary federal funds from fiscal year 2021 and prior years, returning the money to the Treasury to reduce the national deficit.
David Schweikert
Representative
AZ-1
The Forgotten Funds Act mandates the rescission of all unobligated discretionary funds set aside by Congress for fiscal year 2021 and prior years. This returned money will be permanently transferred to the Treasury's general fund. The sole purpose of these recovered funds is to reduce the national deficit.
Forgotten Funds Act Claws Back FY 2021 Unspent Money to Pay Down National Debt
The Forgotten Funds Act is laser-focused on one thing: taking back federal money that Congress previously approved but that agencies never actually got around to spending. Specifically, the bill mandates that any discretionary funds—that’s money set aside for specific programs or projects, not mandatory spending like Social Security—that were appropriated for Fiscal Year 2021 or any year prior, and remain ‘unobligated’ (meaning not formally committed to a contract or project), must be permanently rescinded. That money doesn’t get reallocated to a different program; it gets sent straight to the Treasury’s general fund, and the bill strictly dictates that it can only be used for reducing the national deficit.
The Government’s Lost and Found
Think of this as the government cleaning out its wallet and finding old twenty-dollar bills it forgot about. While the idea of reducing the deficit is a clear benefit for everyone who pays taxes, the mechanism here is straightforward and potentially disruptive. Federal agencies often have funds sitting around for long-term projects, complex grants, or contracts that take time to finalize. By yanking back anything unspent from FY 2021 and earlier, the Act essentially cancels those future plans. For example, a grant program that received funding in 2021 but was planning to issue the final round of grants in 2024 might suddenly find its money gone, leaving potential recipients—like local non-profits or research labs—out of luck.
Who Feels the Pinch?
The main groups feeling the heat here are the federal agencies themselves, and by extension, the programs and people who rely on them. If the Department of Transportation had unobligated funds from 2021 earmarked for a slow-moving infrastructure study or a rural broadband initiative, that money is now being pulled back to pay down the national debt. This means those projects are either stalled or require new funding authorization, which is never guaranteed. For everyday people, this could mean delays in projects like road maintenance, environmental cleanup efforts, or even the rollout of new technology, depending on which agency’s funds are targeted.
The Trade-Off: Fiscal Discipline vs. Operational Flexibility
The Forgotten Funds Act is a clear win for fiscal discipline advocates, ensuring that old, unused spending authority doesn't linger and potentially contribute to future spending bloat. It forces a hard stop on old appropriations. However, the practical challenge is that not all unobligated funds are a sign of waste; sometimes they represent necessary reserves or funding for multi-year contracts that are inherently slow to execute. By applying a blanket rescission date of FY 2021, the bill removes agency flexibility and could force agencies to either scramble for replacement funding or simply abandon previously authorized projects, potentially leaving gaps in services or infrastructure that Congress had already agreed were necessary.