Congress·In Progress·H.R. 5438

Incentivize Savings Act

Rep. McCormick Introduces Incentivize Savings Act to Give Federal Workers Bonuses for Cutting Costs

about 2 months ago·View on Congress.gov·Read full text

The Incentivize Savings Act is currently moving through the House after a committee voted to approve it with changes. It is now waiting to be reported to the full House for further consideration. The bill is actively moving forward.

Legislative Progress

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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.
From policy text
“(2) 49 percent of such total funds shall be used for payments of principal and interest on the public debt”
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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.
From policy text
“(3) 2 percent of such total funds shall be used, not later than the date that is 30 days after the last day of the applicable period of availability, for retention bonuses within such Federal agency under section 5754 of title 5”
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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.
From policy text
“the budget request for the agency in the President's annual budget submission to Congress under section 1105(a) of this title, may not be greater than the total amount of the budget request for the agency for the fiscal year in which the availability of such funds expired, adjusted by the percentage change in the Consumer Price Index”
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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.
From policy text
“the term `Federal agency' means an Executive agency (as that term is defined in section 105 of title 5) or any other agency of the executive branch of the Federal Government, including the United States Postal Service and the Postal Regulatory Commission, but does not include the American National Red Cross.”
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Impact Analysis

Personal Impact

Who is affectedScoreImpactCertaintyScopeDurationSentiment

Scores: 1 = low, 5 = highSentiment: -5 to +5 (net benefit)

Milestones

3 milestones4 actions

Feb 4, 2026House

Ordered to be Reported (Amended) by the Yeas and Nays: 25 - 19.

Feb 4, 2026House

Committee Consideration and Mark-up Session Held

Sep 17, 2025House

Referred to the Committee on Oversight and Government Reform, and in addition to the Committee on the Budget, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Sep 17, 2025

Introduced in House

Related News

1 article

The Hill·15 days ago

Congress must stop rewarding states for wasting taxpayers' money

Rep. Jodey Arrington argues that federal programs are currently 'rewarded for increasing spending rather than safeguarding taxpayers' dollars.' He advocates for 'skin-in-the-game' requirements and fiscal discipline to address the nation's nearly $39 trillion debt.

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