Key Takeaways from Recent Spending Bills

Recent Congressional spending bills for fiscal year 2026 focus on budget adjustments for various federal agencies, with specific provisions impacting the IRS, the General Services Administration (GSA), and the State Department.

Key Takeaways from Recent Spending Bills

Less Severe Cuts for the IRS

The IRS is set to receive an $11.2 billion budget. This represents a 9% decrease, equating to a $1.1 billion reduction from current levels. Notably, this marks the fourth consecutive year of budget cuts or stagnant funding for the agency.

• The enforcement budget for the IRS will decrease to $5 billion, a cut of approximately $439 million.
• Taxpayer services will receive $3 billion, which is an increase of about $256 million compared to the previous budget.

In contrast, the Trump administration had suggested a budget of $9.8 billion for the IRS, leading to cuts exceeding 20% from current levels. The IRS’s ability to modernize its IT infrastructure has been hampered by these ongoing budget constraints.

Changes in GSA Funding and Office Space Management

Congress has instructed the GSA to expedite efforts to dispose of underutilized federal office space. However, the allocated funds fall short of addressing the agency’s significant maintenance backlog, which currently amounts to about $24 billion.

• GSA will receive $9.7 billion from the Federal Buildings Fund.
• This includes $166 million for new construction and $934 million for repairs.

Ed Forst, the newly confirmed GSA administrator, has indicated that an estimated $6 billion is needed urgently to tackle these deferred maintenance projects.

AI Tools for Improved Services

Lawmakers are encouraging the use of artificial intelligence to enhance the delivery of public services. Although funding is not allocated for this purpose, the goal is to improve customer engagement with government resources.

• GSA’s Office of Technology Policy received $1.4 million to enhance website accessibility for individuals with disabilities.
• Over half of federal websites have reported accessibility issues, highlighting a need for improvements.

State Department’s Funding Status

The State Department will maintain a budget of $9.7 billion, reflecting almost no changes from the current operations budget. Despite significant reorganization efforts last year that led to layoffs and consolidation of programs, the new budget preserves funding for independent agencies slated for cuts under the previous administration.

• The budget stipulates quarterly staffing updates and addresses previous layoffs of approximately 1,350 employees.
• Programs from the U.S. Agency for International Development that survived potential cuts have been integrated into the State Department.

Outlook and Challenges Ahead

Senate and House appropriators have indicated that, while negotiation has been difficult, the approved spending package is preferable to a prolonged continuing resolution. Appropriators are focused on balancing fiscal responsibilities with the need for essential public services.

In summary, the recent spending bills reflect a cautious approach to budget cuts while addressing crucial needs in taxpayer services, federal office management, and public service delivery enhancements. Lawmakers emphasize the importance of meeting the challenges facing American constituents through thoughtful fiscal planning.