Trust Us, It's an Interagency Agreement

Congress is preparing to scrutinize how the federal executive branch uses the Economy Act to move resources and execute priorities outside the traditional appropriations process. The House Financial Services and General Government Subcommittee's September 15 hearing will examine the statute, which permits agencies to purchase goods and services from one another through reimbursable interagency agreements. While the Economy Act can promote efficiency and reduce duplication, critics contend it creates opacity around how appropriated funds are ultimately deployed and complicates congressional tracking of spending decisions across agencies.

The appearance of witnesses from the GAO and Congressional Research Service suggests appropriators are focused less on specific program instances than on understanding the broader legal framework and systemic application of interagency agreements government-wide. Members are expected to pursue fundamental questions: What are the largest active Economy Act agreements? Which agencies rely most heavily on these authorities? How much funding has flowed through such agreements over the past three fiscal years? And critically, does Congress retain sufficient visibility into these transactions, or has executive spending effectively moved into a black box?

The Economy Act hearing reflects a deeper institutional concern about executive discretion. House appropriators, protective of their constitutional spending authority, view broad use of interagency agreements as a potential erosion of congressional prerogatives. This concern extends to related issues, including the Administration's proposed revisions to Uniform Guidance, which would expand political involvement in federal grant awards. The recent continuing resolution prevented the Administration from finalizing those revisions before December 11, but Chairman Cole noted the issue represents a postponed rather than concluded conflict over whether merit-based grant processes should be subject to greater political direction.

The September hearing slate also includes FAA oversight focused on modernization, workforce challenges, and air traffic control upgrades, followed by an examination of trade and investment agencies. Across these hearings, members appear intent on establishing whether federal dollars are translating into intended outcomes and whether excessive reliance on cross-government funding structures is undermining transparency and enabling duplication. This oversight effort unfolds against a backdrop of persistent inflation—the consumer price index rose 3.4% annually in August—which is likely to sharpen congressional scrutiny of deficit spending and administration priorities.