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President’s FY2020 Budget

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Today, the Administration released its FY 2020 President’s budget request (PBR) to Congress. This budget is the first step in the annual Congressional appropriations cycle. The annual PBR is a political and policy document indicative of the goals of the  Administration for the coming year.

The $4.7 trillion FY 2020 budget released today would sharply reduce spending on safety-net programs, while effectively exempting the Pentagon from strict spending caps set to take effect in FY 2020.

The PBR assumes the scheduled FY 2020 and 2021 sequester cuts to domestic spending, which is effectively a 10 percent reduction to nondefense programs from current levels. The budget would reduce the overall level of nondefense spending by nearly $30 billion reduction and would increase military spending by 5 percent, to $750 billion from $716 billion received in FY 2019. It requests $8.6 billion for new barriers along the southern U.S. border, including $5 billion for the Department of Homeland Security and $3.6 billion for the Defense Department’s military-construction budget. The president’s blueprint would also provide additional funding to boost manpower at Immigration and Customs Enforcement and Customs and Border Protection, and it proposes policy changes to end so-called sanctuary cities.

The Administration’s budget proposed $2.7 trillion in spending cuts over the next decade of which $1.9 trillion is cuts to mandatory spending programs.  Specifically within those programs, the Administration proposes to cut $22 billion from safety-net programs next year—$327 billion over the next decade—and proposes new work requirements for recipients of food stamps, Medicaid, and federal housing programs.

Within the discretionary nondefense side of the ledger, cuts were proposed to:

  • $87.1 billion for HHS (a 12 percent cut)
  • $34.36 billion for NIH (a 12 percent or $4.9 billion cut)
  • $5.8 billion for HRSA (a $1 billion cut)
  • $5.27 billion for CDC (a $1.2 billion cut)
  • $31.7 billion for Energy, (an 11 percent cut) and requests $5.5 billion for Office of Science (a 9 percent decrease) while eliminating Advanced Research Projects Agency-Energy (ARPA-E)
  • $62.0 billion for ED (an $8.5 billion or 12 percent cut) and eliminating, Public Service Loan Forgiveness, Supporting Effective Instruction State Grants, 21st Century Community Learning Centers, and Federal Supplemental Educational Opportunity Grants
  • $12.2 billion for Commerce (a $1.0 billion or a 9.3-percent increase), but eliminations to the  Sea Grant, Coastal Zone Management Grants, and the Pacific Coastal Salmon Recovery Fund.
  • $12.5 billion for Interior (a 14 percent cut)
  • $7.1 billion for NSF (a 9 percent cut)
  • $21 billion for NASA (a 1.4 percent increase)

The budget specifics for HHS, ED, Energy, DOD, Interior, NOAA, and NASA should be forthcoming this week.

Other items included in the budget, the PBR proposes to streamline student loan repayment by consolidating multiple IDR plans into a single plan. The Single IDR plan would cap a borrower’s monthly payment at 12.5 percent of discretionary income. For undergraduate borrowers, any balance remaining after 180 months of repayment would be forgiven. For borrowers with any graduate debt, any balance remaining after 30 years of repayment would be forgiven.  It would expand Pell Grant eligibility to include high-quality short-term programs. The budget proposes to restructure and streamline the TRIO and GEAR UP programs by consolidating them into a $950 million State formula grant.

NIH would continue to address the opioid epidemic, make progress on developing a universal flu vaccine, and support the next generation of researchers. The PBR includes a new, dedicated effort to support research and develop new treatments for childhood cancer. Cancer is the leading cause of death from disease among children and adolescents in the United States. The basic biology of childhood cancers is not fully understood and differs from that of adult cancers. The Budget includes increased funding and an innovative initiative to enable the Nation’s best researchers and doctors to learn from every child with cancer, providing the opportunity to comprehend finally the unique causes and the best cures for childhood cancer.

 

 

Senate Likely to Disapprove National Emergency Declaration

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Over the weekend, a fourth Republican Senator, Rand Paul of Kentucky, expressed his support for the resolution disapproving the president’s declaration of a national emergency on the Southern border.  Paul joins Susan Collins of Maine, Lisa Murkowski of Alaska, and Thom Tillis of North Carolina in publicly declaring their support for the resolution.  A number of other Republican Senators have signaled that they could join that group.

The House passed the resolution 245 – 182 in February.  Paul’s support, along with that of every Democrat in the chamber, means that it will pass in the Senate as well.  However, the president has pledged to veto the measure, which would be his first veto. The margins in the two chambers are not large enough to override the veto.

A number of states have already filed a lawsuit against the declaration and other lawsuits are expected.

Read more about the political situation on this issue in Congress here and here.

Meanwhile, in Non-Budget Related News…

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In another demonstration of how unusual the current political times are, the House is expected to take up today H. J. Res. 46, a resolution disapproving President Trump’s decision to declare a national emergency to build a wall along the Southern border.  The measure is expected to pass easily in that chamber.  The remaining question in the House appears to be whether it will pass with enough votes to overturn a presidential veto.  Should the resolution reach the his desk, the President has vowed to veto it, which would mark his first veto in office.

If the resolution passes the House, the Senate would be required to take it up and it would only require a majority for passage.  With all Senate Democrats expected to support it, the question now is whether enough Republicans will join them to garner its passage.  So far, three Republicans have declared their support for the resolution:  Thom Tillis of North Carolina, Susan Collins of Maine, and Lisa Murkowski of Alaska.  Only one more would be needed for passage, but that would not be enough to make it veto-proof.

Read more about the issue here and here.

Meanwhile, in other news, former Trump attorney Michael Cohen is scheduled to appear before three different Congressional committees this week, starting with the Senate Intelligence Committee today.  Tomorrow, he is expected to testify on the House side, before both the House Oversight Committee and the House Intelligence Committee.  Only his appearance before the Oversight Committee is expected to occur in a public setting.  Read more about the Cohen situation here and here.

And here comes the NEXT Spending Battle

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Although the FY2019 spending situation has finally been resolved, another potentially protracted spending fight is already underway.  Without an agreement to lift the statutory limits on how much the government can spend during FY2020, the federal government is looking at a very steep fiscal cliff and significant automatic cuts.

In 2011, House and Senate negotiators came up with, and the Obama Administration agreed to, a plan that was considered so potentially draconian that no one thought that parts of the plan would ever be allowed to come to fruition.  The overarching goal of the plan was to cut mandatory spending.  The intent was to force cuts in mandatory spending by imposing automatic cuts (or popularly called “sequesters”) to the discretionary part of the budget– both defense and non-defense– with statutory cuts placed on each part of the discretionary budget for 10 years.

The mandatory savings never materialized, and over the last eight years, sequesters have been avoided only as a result of two-year deals that raised the spending limits imposed on both defense and non-defense discretionary (“NDD”) programs.  The last deal that lifted the cap applied to FY2018 and FY2019.

All of this means that, for FY2020, without an agreement that lifts the statutory limit on discretionary programs, we are facing a mandatory cut of $126 billion below FY2019 levels.  As a result of the 2011 agreement, discretionary defense programs would be subject to a cut of $71 billion while the domestic agencies and programs funded through discretionary funds– such as NIH and NSF– would be forced to deal with a cut of $55 billion in FY2020.  An agreement must also be reached for FY2021 in order to prevent similar automatic cuts.

Advocacy groups have mobilized to draw Congressional attention to the serious problems surrounding maintaining current spending caps.  Congressional discussions have begun and the situation will take months to resolve.

 

Trump to Sign Spending Bill, Then Declare National Emergency

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Late this afternoon, the Senate cleared by a vote of 83 to 16 the spending package that would fund the entire government for the rest of the fiscal year (the text of the conference report is available here). The Senate moved to vote on the bill even as the Members were unclear as to whether the President would actually sign it.

To end the drama, Senate Majority Leader Mitch McConnell (R-KY) appeared on the Senate floor to announce that President Trump would sign the bill, which does not contain the $5.7 billion requested by the President for a concrete wall.  While declaring that the bill would be signed by the President, McConnell also added that President Trump also plans to declare a national emergency, in an attempt to find additional ways to construct the wall.  A number of Republicans in both chambers of Congress have expressed reservations about such a move, as they are concerned that a future Democratic president might declare a national emergency for other issues, such as gun violence or climate change.  If and when a national emergency is declared, various lawsuits are expected to be filed, challenging that declaration.

The House is scheduled to take up the measure later this evening.

Read more about the developments here, here, and here.

We will provide details from the conference report shortly.