President Biden Unveils FY 2025 Budget Proposal
March 14, 2024
On March 11, President Biden unveiled his fiscal year 2025 budget request to Congress, which covers broad spending categories and includes projections for major entitlement programs, such as Social Security, Medicare and Medicaid. All told, the administration is proposing $7.3 trillion in mandatory and discretionary spending for the upcoming fiscal year, which begins on October 1, 2024. The proposed funding level represents a 4.7 percent increase over the current budget. Among other things, the Biden administration is calling on Congress to restore the popular expanded Child Tax Credit that expired in 2021. The framework also includes funding for a federal-state partnership aimed at expanding free pre-school education and revives legislative proposals aimed at providing national paid leave and free community college.
New spending under the budget would be offset by taxes on the wealthy and major corporations. Among other proposals, the budget would introduce a 25 percent minimum tax on those earning more than $100 million. With regard to businesses, the proposal calls for increasing the corporate tax rate to 28 percent (up from 21 percent). It also proposes to increase the minimum tax on billion-dollar corporations to 21 percent (up from 15 percent). According to the administration, these reforms would reduce the deficit by nearly $3 trillion over the next decade.
Looking ahead, a number of cabinet officials and other agency heads will appear before various congressional committees to defend the administration’s spending priorities. However, given the divided Congress and highly-charged political climate ahead of the November elections, the administration’s budget plan will serve as more of a symbolic representation of the president’s policy priorities than the actual starting place for upcoming spending decisions.
CA Delegation Urges FEMA to Fully Reimburse Counties for Non-Congregate Sheltering Costs
On March 11, Congressman Robert Garcia (D-CA) – along with 35 other members of the California congressional delegation – sent a letter to FEMA Administrator Deanne Criswell urging the agency to provide full reimbursement for emergency non-congregate shelter (NCS) costs incurred by California’s counties during the COVID-19 pandemic. Senators Alex Padilla (D-CA) and Laphonza Butler (D-CA) sent a similar letter to President Joe Biden on February 20.
Launched by Governor Newsom in the early days of the COVID-19 pandemic, Project Roomkey provided non-congregate shelter options for people experiencing homelessness and was a cornerstone of the state’s strategy to protect life and mitigate the strain on an already overwhelmed health care system. In response to the urgent public health crisis, a number of California’s counties took unprecedented action to relocate large numbers of homeless individuals into empty motel and hotel rooms. Many of these individuals had medical conditions, placing them at higher risk of the negative health effects of COVID-19.
Despite assurances that California’s local jurisdictions would receive full federal reimbursement for Project Roomkey expenses, FEMA announced in October of 2023 that it would only cover emergency NCS stays for up to 20 days for the period between June 11, 2021 and May 11, 2023. FEMA’s decision to limit federal reimbursement in this regard represents a flagrant retroactive policy determination and, according to the most recent numbers provided by Cal OES, could cost California’s counties and cities roughly $300 million.
For its part, CSAC featured this issue as a key priority in advocacy visits during the NACo Legislative Conference. Among others, CSAC leaders met with members of the California delegation, the White House Office of Intergovernmental Affairs, and the Vice President’s Office of Public Engagement and Intergovernmental Affairs. Looking ahead, CSAC will continue to work closely with the California delegation and will remain in contact with key Biden administration officials regarding the FEMA policy change. CSAC also will continue to collaborate with Governor Newsom’s office and the League of California Cities.
Congress Approves Bill to Support Local Evacuation Routes
Last week, Congress cleared legislation (S. 3605) – sponsored by Senator Alex Padilla (D-CA) and endorsed by CSAC – that will support local evacuation routes and planning. The bill was included in the Consolidated Appropriations Act of 2024 (P.L. 118-42).
Specifically, the new law directs the U.S. Department of Transportation, in consultation with FEMA, to develop and publicly disseminate guidance and best practices for States, territories, Indian Tribes, and local governments to utilize when conducting local emergency evacuation route planning, both for evacuating communities and bringing in emergency personnel and supplies.
Senate Panel Advances Legislation to Reauthorize the Economic Development Administration
On March 12, the Senate Environment and Public Works (EPW) Committee advanced bipartisan legislation (H.R. 3891) that would reauthorize the Economic Development Administration (EDA) for the first time in 20 years. The EDA is an agency within the Commerce Department that invests in the economic development of distressed communities. The bill proposes key reforms to modernize EDA’s core programs and authorizes activities such as workforce development and disaster assistance. It would also authorize and update the laws pertaining to certain federal regional commissions.