Funding for IT modernization diminished by House decision
The United States House of Representatives has approved the Financial Services and General Government Appropriations bill for 2026, with a vote of 35 to 28. This bill includes significant allocations for Information Technology (IT) modernization and cybersecurity measures.
One of the key recommendations in the bill is a $10 million allocation for the IT Oversight Reform (ITOR) fund. Of this amount, $5 million is earmarked for the Office of the Chief Information Officer, and the remaining $5 million is designated for the United States DOGE Service.
The House report accompanying the bill encourages the Office of the National Cyber Director to collaborate with the Cybersecurity and Infrastructure Agency to ensure the implementation of best practices for securing federal data. This comes amidst concerns about the infiltration of Chinese hackers into the Treasury's information technology systems.
The bill also directs the Treasury to submit quarterly updates on the status of implementing the cybersecurity plan and to identify any agreement or areas of cooperation with members of the intelligence community to strengthen its cybersecurity platform.
The bill's advancement signifies a step towards fiscal discipline and common sense within the federal government, according to House Financial Services and General Government Subcommittee Chairman Dave Joyce.
In addition to IT and cybersecurity, the bill also addresses the Federal Citizen Services Fund. For 2026, the allocation stands at $55 million, with $5 million intended for hiring employees to support the implementation of the Foundations for Evidence-Based Policymaking Act of 2018.
However, the bill has zeroed out the Technology Modernization Fund for the third straight year. This fund, which has not received any funding in the House 2026 bill, has been a significant source of support for governmentwide modernization programs in the past.
The General Services Administration (GSA) has proposed making the Technology Modernization Fund a revolving or working capital fund, allowing it to collect funding from other agencies and bring that funding into the TMF with OMB approval.
The House 2026 bill also allocates $99 million for the Treasury's Cybersecurity Enhancement Account, an increase from the 2025 appropriation of $36.5 million. The bill directs the administrator of DOGE to submit quarterly reports to the House and Senate committees on appropriations on the number of hires for DOGE.
It is worth noting that ITOR has over $55 million left for 2025, according to USASpending.gov. House lawmakers have reduced funding for IT modernization efforts across the board in their version of the Financial Services and General Government appropriations bill.
In many cases, the Office of Management and Budget uses money from all three funds (ITOR, TMF, and Federal Citizen Services Fund) to support governmentwide modernization programs. The reduction in funding for these funds may impact these programs moving forward.
The House 2026 bill also reduces the Office of the National Cyber Director's budget to $18.1 million, down from the 2025 appropriation of $21.7 million. This reduction could potentially impact the agency's ability to strengthen federal cybersecurity measures.
The approved bill now moves to the Senate for consideration. The outcome of the Senate's deliberations and any potential negotiations between the House and Senate will determine the final budget allocations for 2026.
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