Public Policy Update – FY 2018 President’s Budget Priorities to be Released Thursday, March 16

By Tom Branen, Chief Policy Officer, America’s Service Commissions (ASC)

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This is a big week, the President is expected to release an abbreviated version of his FY 2018 budget proposal and the expectation is that it will propose a major shakeup in the size and scope of the federal government. As this moves forward, please keep in mind that this budget is a proposal and that Congress actually appropriates annual federal spending.

This update provides a preview of the President’s FY 2018 budget release and the latest on the FY 2017 appropriations process.

FY 2018 President’s Budget Release

An abbreviated version of President Trump’s FY 2018 budget proposal is scheduled to be released this Thursday, March 16th.  Reportedly, if enacted, it would cut or eliminate numerous federal programs expediting a historic contraction of the federal workforce. This would be the first time the government has executed cuts of this magnitude and all at once since the drawdown following World War II, according to experts. Administration officials have signaled for weeks that large cuts will be part of the budget. Reportedly, the budget prioritizes the military and homeland security while slashing many other areas, including housing, foreign assistance, environmental programs, public broadcasting and research.

The New York Times in February reported that the Corporation for National and Community Service was on a list of federal agencies and programs that were under consideration for elimination.  The proposed cuts could lead to layoffs among federal workers, but it is unclear what the precise impact on many agencies might be because the departments could choose to implement reductions in a variety of ways. Administration officials have also stressed that discussions are ongoing between budget officials and agencies, and that the size of the budget cuts remains fluid. Moreover, the cuts cannot take effect unless they are authorized by Congress, which could prove difficult. Lawmakers routinely rebuffed budget requests from President Barack Obama, leading instead to protracted negotiations between both sides. In fact, most Presidential budgets are not funded as presented and many times are considered to be policy priority statements rather than true budget blueprints. Democrats have vowed to fight these proposals, and some Republicans have also expressed unease at the size of the reductions.

The federal government is projected to spend $4.091 trillion next year, with roughly two-thirds of that going mostly toward Social Security, Medicare, Medicaid, poverty assistance and interest payments on the government debt. This spending is expected to be left untouched in the budget proposal. What President Trump will propose is changing the rest of the budget, known as discretionary spending, which is authorized each year by Congress. Slightly more than half of this remaining money goes to the military, and the rest is spread across agencies that operate things like the national service, education, diplomacy, housing, transportation and law enforcement. Among the expected proposals are an increase in military spending of $54 billion, more money to start building a wall along the border between the United States and Mexico, and the creation of new initiatives that expand access to charter schools and other educational programs. To offset that new money, the President will propose steep cuts across numerous other agencies. Although final numbers remain in flux, there are reports that the Department of Housing and Urban Development’s budget alone would be cut by $6 billion, or 14 percent. Additionally, preliminary budget documents have also shown that Trump advisers have also looked at cutting the Environmental Protection Agency’s staff by about 20 percent and tightening the Commerce Department’s budget by about 18 percent. A more detailed budget proposal is expected to be released in early May by the Trump Administration.

FY 2017 Appropriations Update

Senate Democratic leaders warned Monday in a letter sent to Majority Leader Mitch McConnell and Appropriations Committee Chairman Thad Cochran that proposed funding for a wall along the U.S.-Mexico border could cause a partial government shutdown this spring Senate Democrats said that they will help pass spending bills if those bills adhere to the topline spending levels written in an October 2015 bipartisan budget agreement, if any increases in defense spending are matched by equal increases in non-defense, and if poison pill riders are avoided. They also said funding in fiscal 2017 for a border wall would be inappropriate.

President Trump is expected to submit to Congress a supplemental spending request that could propose adding as much as $60 billion in defense funds in fiscal 2017, and a border wall supplemental spending request to begin construction of a barrier along the U.S.-Mexico border. A standoff could lead to major government funding problems in late April, when a fiscal 2017 continuing resolution runs out. Most of the government is operating under the CR, including the Corporation for National and Community Service (CNCS). According to non-partisan experts, the proposed new border wall could cost as much as $25 billion. The Trump administration has not yet sent the Hill the supplemental spending requests, even though fiscal 2017 is almost halfway over and lawmakers have begun moving forward with bicameral, bipartisan negotiations on the remaining bills.While the wrap-up of fiscal 2017 appropriations is not set in stone, the House is expected to pass 10 remaining domestic spending bills in an omnibus-style package. The Defense spending bill passed last week and is holding in the Senate, where the outlook is much more uncertain for fiscal 2017.The supplemental spending requests would most likely be packaged with the remaining fiscal 2017 spending bills instead of moving through Congress as individual spending bills. Republicans have a narrow 52-seat majority, meaning they need Democratic votes to reach the 60-vote threshold required to move past procedural votes and keep the government funded past April 28. If an agreement is not made before then, another short-term CR may be considered or the federal government could face another partial shutdown.The prevailing sense on Capitol Hill is that appropriators ould like to move forward the bipartisan FY 2017 omnibus bill  that was negotiated late last year and then pivot to working on the FY 2018 spending bill.

ASC is monitoring the release of the President’s FY 2018 budget and the ongoing FY 2017 appropriations situation and will update you as negotiations continue.

For more information, contact:

Tom Branen

America’s Service Commissions

455 Massachusetts Ave, NW Suite 153

Washington, DC 20001

202-207-5389

TBranen@asc-online.org

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