Incentivize Savings Act

Key Points

• This bill tackles the "use it or lose it" spending culture at federal agencies by creating a new system for handling unspent money. Instead of losing all leftover funds, agencies would keep nearly half for the next year, incentivizing them to save rather than rush to spend every dollar before their budget expires.
• Another 49% of any unspent funds would go directly toward paying down the national debt, meaning taxpayer savings would have a concrete fiscal benefit beyond just the agency level.
• A small portion — 2% of leftover funds — would be used for retention bonuses for employees at the agency that saved the money. These bonuses are capped at 10% of an employee's base pay, and any leftover bonus funds also go to paying down the debt.
• To prevent agencies from gaming the system by requesting inflated budgets, the bill caps future budget requests. An agency that triggers these savings rules cannot ask for more money than the previous year, adjusted only for inflation.
• The bill applies broadly to nearly all executive branch agencies, including the U.S. Postal Service and the Postal Regulatory Commission, but specifically excludes the American National Red Cross.