March 16, 2017

On Thursday, March 16, President Donald Trump sent to Capitol Hill a general outline of his administration’s budget priorities for the fiscal year that begins October 1.  The blueprint, which is just over 50 pages long and amounts to a bare-bones spending request, proposes historically deep cuts across nearly every federal agency.  All told, the White House is recommending $54 billion in spending reductions to non-defense discretionary programs in order to pay for a commensurate increase in defense-related funding.

While the document, entitled “America First – A Budget Blueprint to Make America Great Again,” provides the clearest indication, to date, of the Trump administration’s fiscal objectives, it falls far short of a complete budget plan.  A full fiscal year 2018 spending proposal, with line-by-line funding requests and agency-level analyses, is expected sometime in May.  In the meantime, the president’s blueprint sets the stage for what is expected to be a vigorous debate in Congress over the size and proper role of the federal government.

It should be noted that President Trump included as part of today’s budget submission a $30 billion fiscal year 2017 supplemental spending request to pay for various defense and homeland security needs.  To help offset the additional current-year spending, the administration is proposing $18 billion in yet-to-be-identified cuts to domestic agencies.

Within the $30 billion, $3 billion would go to implement the president’s executive orders on immigration, with $1 billion of that total slated for construction of the proposed border wall.  The supplemental request is sure to set off a partisan firestorm, as congressional Democrats have vowed to fight any legislative vehicle that seeks to provide current-year funds for construction of a physical barrier between the U.S and Mexico.

To follow is additional information on the Trump administration’s fiscal year 2018 budget blueprint.

Department of Health and Human Services

The budget proposes a 17.9 percent cut to the Department of Health and Human Services (HHS), or a $15.1 billion reduction in discretionary funding in fiscal year 2018.

The Trump blueprint does not address proposed policy changes or possible cuts to federal mandatory spending programs such as Medicaid and the Temporary Assistance for Needy Families (TANF) program.  The document does state, however, that the administration “supports efficient operations for Medicare, Medicaid, and the Children’s Health Insurance Program and focuses spending on the highest priority activities necessary to effectively operate these programs.”

HHS programs targeted for elimination include the $715 million Community Services Block Grant (CSBG) and the $3.1 billion Low Income Home Energy Assistance Program.  Incidentally, while both programs were slated for reductions in several of President Obama’s proposed budgets, they were consistently funded by Congress.

The budget proposes a $500 million increase above 2016 levels to address the opioid epidemic, and a new $500 million block grant to states to address public health needs.  It should be noted that there is insufficient detail within the outline to determine the fate of the nearly $1 billion Prevention and Public Health Fund, which is slated for elimination under the GOP’s Affordable Care Act replacement bill.   

Department of Homeland Security

The White House is requesting $44.1 billion in discretionary budget authority for the Department of Homeland Security (DHS), a $2.8 billion (6.8 percent) increase from the 2017 annualized continuing resolution (CR) level.

The administration is seeking $2.6 billion for “high-priority tactical infrastructure” and border security technology, including funding to plan, design, and construct a wall along the southern border as directed by the president’s January 25, 2017 Executive Order.

The budget includes $314 million to recruit, hire, and train 500 new Border Patrol Agents and 1,000 new Immigration and Customs Enforcement law enforcement personnel in 2018, plus associated support staff.

The National Flood Insurance Program’s $190 million Flood Hazard Mapping initiative would be eliminated under the Trump budget

All told, the DHS budget would eliminate or reduce a number of state and local grant programs administered by the Federal Emergency Management Agency (FEMA), including the Pre-Disaster Mitigation Grant Program and the Homeland Security Grant Program.  According to the administration, the activities and acquisitions funded through these programs are primarily state and local functions.

Department of Justice

The Department of Justice would be funded at $1.1 billion under the Trump budget, or a 3.8 percent decrease from the 2017 annualized CR level.

The Trump budget seeks to cut roughly $700 million in “unnecessary spending on outdated programs that either have met their goal or have exceeded their usefulness.”  Among other programs, the administration is proposing the elimination of the State Criminal Alien Assistance Program (SCAAP), which is currently funded at $210 million.  The budget notes that two-thirds of SCAAP funding goes to reimburse four states for the cost of incarcerating certain undocumented criminals.

According to the budget outline, the administration is seeking to safeguard grants to state, local, and tribal law enforcement and victims of crime (though specific funding levels are not enumerated in the budget outline).  In addition, critical programs aimed at protecting the life and safety of state and local law enforcement personnel would be protected.

Department of Transportation

The White House is requesting $16.2 billion for the Department of Transportation’s (DOT) discretionary budget, or a $2.4 billion (13 percent) decrease from the 2017 level.

The budget seeks to eliminate funding for DOT’s $500 million discretionary TIGER grant program.

Funding for the Federal Transit Administration’s Capital Investment Program (New Starts) would only be available to projects with existing full-funding grant agreements.  According to the administration, “future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.”

The budget would eliminate funding for the $175 million Essential Air Service (EAS) program, which provides subsidized commercial air service to rural airports.

The White House has endorsed as part of its budget a GOP House proposal to shift the air traffic control function of the Federal Aviation Administration to an independent, non-governmental organization.

Environmental Protection Agency

The Environmental Protection Agency (EPA) would see a massive 31 percent reduction under the Trump administration’s budget.  In total, the White House is proposing to fund the EPA at $5.7 billion, a proposed cut of $2.6 billion.

The budget recommends eliminating more than 50 EPA programs for a savings of $347 million.  According to the administration, “lower priority and poorly performing programs and grants are not funded, nor are duplicative functions that can be absorbed into other programs or that are State and local responsibilities.”

The budget outline indicates that the administration is recommending “robust funding” for drinking and wastewater infrastructure and that the funding levels would further the president’s commitment to infrastructure repair and replacement while allowing states, municipalities, and private entities to continue to finance high-priority infrastructure investments that protect human health.  Specifically, the budget proposes $2.3 billion for State Revolving Funds, a $4 million increase over current levels, and $20 million for the Water Infrastructure Finance and Innovation Act (WIFIA) program (equal to the funding provided in the CR).

The White House is proposing to eliminate funding for the Obama administration’s Clean Power Plan, international climate change programs, climate change research and partnership programs, and related efforts – for a savings of over $100 million.

Department of the Interior

The budget requests $11.6 billion for the Department of the Interior, a $1.5 billion (12 percent) decrease from the 2017 annualized level.

President Trump’s budget “eliminates unnecessary, lower priority, or duplicative programs,” including National Heritage Areas and National Wildlife Refuge fund payments to local governments.

The budget would provide discretionary funding for the Payments-in-Lieu-of-Taxes (PILT) program at a reduced level that is “in line with average funding for PILT over the past decade.”  Because PILT has fluctuated over the course of the last 10 years, the program would likely be funded well below current levels.

The budget would provide the full 10-year rolling average for wildland fire suppression activities.

Department of Housing and Urban Development

The president’s budget requests $40.7 billion in discretionary funding for the Department of Housing and Urban Development (HUD), a $6.2 billion (13.2 percent) decrease.

In general, the Trump budget seeks to “devolve” community and economic development activities to the state and local level.  In place of funding cuts for HUD programs, the budget would redirect these resources to other activities.

Specifically, the budget would eliminate the Community Development Block Grant (CDBG) program, which is currently funded at $3 billion.  According to the administration, the program is not well-targeted to the poorest populations and has not demonstrated results.

The budget also seeks to eliminate funding for a number of other key HUD programs, including the HOME Investment Partnerships Program, Choice Neighborhoods, and the Self-help Homeownership Opportunity Program.  As a justification for the proposed cuts, the administration has indicated that “State and local governments are better positioned to serve their communities based on local needs and priorities.”

U.S. Department of Agriculture

The budget requests $17.9 billion for the U.S. Department of Agriculture (USDA), a $4.7 billion (21 percent) reduction from current spending.

Given the entitlement nature of the Supplemental Nutrition Assistance Program (SNAP), President Trump’s budget outline does not address any changes to the program.  It does, however, propose $6.2 billion to fully fund the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), which provides food and nutrition education for low-income pregnant mothers, infants and children.

The outline calls for full funding for USDA wildland fire preparedness and suppression activities at $2.4 billion, or 100 percent of the 10-year average for suppression operations.

Department of Labor 

President Trump is requesting $9.6 billion for the Department of Labor, a $2.5 billion (21 percent) decrease from the 2017 annualized CR level.

In general, the Labor Department budget cuts are not specified, with the exception of a proposal to eliminate the $434 million Senior Community Service Employment Program.

It should be noted that the Workforce Innovation and Opportunity Act and Job Corps are likely targets for elimination or reduction as part of a full Trump budget.  According to the Trump administration, the budget outline “Decreases Federal support for job training and employment service formula grants, shifting more responsibility for funding these services to States, localities, and employers.”