Congressional Spending Deal Could Revive Technology Modernization Fund

Editor’s note: This article was updated Jan. 21, 2026, to include comment from Jessie Posilkin, acting executive director of the Technology Modernization Fund.

The Technology Modernization Fund, General Services Administration’s funding vehicle for federal IT upgrades, may get new life if lawmakers pass their latest version of the federal funding package released Tuesday. 

The latest three-bill minibus includes $1.2 trillion in spending for the departments of War, Labor, Education, Health and Human Services, Transportation, Housing and Urban Development and related agencies. Lawmakers have agreed to vote on the three bills together since they have bipartisan support and vote separately on the Department of Homeland Security funding bill since it does not yet have a bipartisan path forward. Members of Congress need to pass the package by Jan. 30 to avoid another government shutdown.

In addition to allocating funds, the package extends the TMF through Sept. 30. The TMF expired in December after Congress failed to extend its authorization. The lapse left nearly $200 million in available funds effectively frozen. At the time, GSA said they would continue to manage ongoing work but would not award new funding.

“We’re excited that Congress included language in its latest appropriations bill reauthorizing the Technology Modernization Fund through the end of fiscal year 2026,” acting Executive Director of the TMF Jessie Posilkin told GovCIO Media & Research. “This will give GSA additional time to partner with agencies, accept new proposals and invest in high-impact projects that strengthen security, reliability, and efficiency for taxpayers, while Congress works toward a longer-term reauthorization.”

Posilkin added that she views the reauthorization as a strong vote of confidence for the TMF, a program that has helped save “hundreds of millions of work hours” and generated billions in cost savings and efficiency gains across government. 

If the bills pass, it’s unclear where that leaves the Trump administration’s proposed new funding model for the program. The administration suggested earlier this year that — with approval from the Office of Management and Budget — GSA could collect “unobligated balances of expired discretionary funds” from other federal agencies and put in the TMF.   

Background 

Congress created the TMF in 2017 to address a long-recognized problem: federal agencies spending more to maintain outdated, failure-prone systems than modernizing them. The revolving-fund model was intended to give agencies a flexible way to pay for multi-year upgrades without being constrained by the annual appropriations cycle.   

“The U.S. federal government is the largest purchaser of IT products and services in the world, spending over $100 billion each year. Nearly 80% is spent maintaining existing IT, including legacy systems that are decades old. These outdated systems require rare skills to fix and maintain, are difficult to secure and scale, and stand in the way of agencies delivering on their missions,” according to GSA.  

Since its launch, the fund has invested roughly $1 billion in 70 projects across 34 federal agencies. Major investments include: 

• $10 million for the National Institute of Standards and Technology to modernize cybersecurity systems, move legacy platforms to cloud services and develop AI-backed analytic tools. 

• $45 million to the Justice Department’s Antitrust Division to modernize its data analysis capabilities through AI and develop a new portal for citizens to report violations. 

• $42 for the Labor Department to update its system that processes health records and claims for 2.5 million federal workers.  

“The TMF has saved 378 million work hours for Americans and delivered billions in cost savings. Without reauthorization, the administration’s priorities around shared services and AI adoption will falter, cybersecurity improvements will stall, and we risk losing critical modernization momentum,” a GSA spokesperson told GovCIO Media & Research in December.