TMF Funding Boost Hopes Take a Step Back in FY2021 Approps Bill

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If the Technology Modernization Fund (TMF) is going to see a big boost in funding anytime soon, it may not arrive through the regular annual appropriations process.

That’s one takeaway from the FY2021 Financial Services and General Government funding bill released July 7 by the House Appropriations Committee, which proposed $25 million of new money for TMF. That figure compares to a $1 billion TMF funding increase approved by the House in May, but as of yet not taken up by the Senate.

The fund was created to finance IT modernization projects by Federal agencies, who agree to repay borrowings to the fund through savings generated by the projects. That repayment requirement has tempered agency demand for TMF-funded projects, and TMF has still not spent all of its funding from previous years.

The $25 million of new TMF funding proposed in the FY2021 appropriation bill matches the figure that Congress has approved in the last two fiscal years. The Trump administration, as it did in FY2020, proposed $150 million for TMF for FY21.

The coronavirus pandemic that began in March, however, has focused more attention – much of it positive – on the need to quicken the pace of Federal IT modernization to help government and citizens weather the current storm, and prepare for whatever the future holds.

Among congressional Democrats and some of the tech industry’s biggest companies, TMF has become a favored vehicle to advance faster modernization efforts.

Most notably, the HEROES Act coronavirus relief legislation approved by the House in May would pump $1 billion into the TMF to fund “technology-related modernization activities to prevent, prepare for, and respond to the coronavirus.” But that House bill earned short shrift from Senate Republican leaders, and a veto threat from the White House.

In the lead-up to the HEROES Act bill, Rep. Gerry Connolly, D-Va. – one of the House’s most vocal TMF supporters – urged $3 billion of new funding for TMF.

“The coronavirus pandemic has exposed significant weaknesses in our outdated Federal IT systems,” Rep. Connolly told MeriTalk in a statement today. “Addressing these needs demands visionary investment, which is why I was proud to support the Heroes Act that made a $1 billion investment in the TMF. My hope is Congress will realize this opportunity and provide the TMF the funding necessary to modernize our IT systems.”

More recently, a collection of big-tech trade groups urged Senate leaders in late June to match or exceed the $1 billion in TMF funding contained in the HEROES Act. They also called for legislative action to boost the ability of Federal agencies to fund modernization through working capital funds. And they asked legislators to provide more money for the Continuous Diagnostics and Mitigation (CDM) and FedRAMP programs.

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