What does rescission mean in the context of budget authority?

In the context of budget authority, rescission specifically refers to the cancellation of previously approved budget authority. This means that funds that had been allocated for specific purposes are no longer available for use, essentially retracting or repealing the authority to spend that money. This action can be initiated for various reasons, such as necessary budget adjustments, changes in fiscal priorities, or an effort to reduce overall governmental expenditure.

Understanding rescission is critical in financial planning and budgeting because it impacts the available resources for programs and projects. It is important to differentiate this term from the others related to budget adjustments. For instance, while rescission involves the cancellation of funds, an approval of increased spending would mean more resources are being made available. Similarly, the allocation of additional funds implies an injection of resources rather than a retraction. A temporary hold on expenditures suggests that spending is paused but not permanently cancelled, which differs from a rescission that permanently removes budget authority.