Update from Washington, DC
February 13, 2020
Trump Administration Releases Fiscal Year 2021 Budget
On Monday, February 10th, the Trump administration released its fiscal year 2021 budget request to Congress. The election-year plan, which the White House has dubbed “A Budget for America’s Future,” calls for a record $4.8 trillion in federal spending. If embraced by lawmakers, the fiscal blueprint would yield a nearly $1 trillion deficit, which is on par with the budget deficit for the current fiscal year.
It should be noted that the administration’s plan does not adhere to the topline domestic spending figure as authorized by last year’s bipartisan budget cap agreement (PL 116-37). Instead of providing a modest increase for nondefense programs as called for under the law, the Trump budget proposes a six percent cut in domestic discretionary spending. In the area of national defense, the administration’s proposal sticks to the cap deal, which allows a 0.5 percent boost in military spending.
Like previous versions of President Trump’s budget, the 2021 request recommends steep reductions for several individual departments, agencies, and programs. Among the hardest hit would be the Department of Commerce (-37 percent), the Environmental Protection Agency (-26 percent), and the Department of Housing and Urban Development (-15 percent).
Winners under the Trump budget would be the Department of Veterans Affairs (+13 percent), the National Aeronautics and Space Administration (+12 percent), and the Department of Homeland Security (+3 percent).
The administration’s proposal also calls for roughly $2.3 trillion in savings from mandatory spending programs (entitlements) over the next decade, including cuts to Medicaid, the Temporary Assistance for needy Families Program (TANF), the Children’s Health Insurance Program, and the Supplemental Nutrition Assistance Program (SNAP), among others.
As expected, Democratic leaders in both the House and Senate have declared the Trump budget “dead on arrival,” with a number of Republicans also expressing skepticism over portions of the plan. Given the partisan divisions in Congress and the political climate ahead of this fall’s presidential election, the administration’s proposal will serve as a representation of the president’s policy priorities rather than the starting place for actual spending decisions.
To follow are select highlights of the Trump administration’s fiscal year 2021 budget proposal.
Department of Housing and Urban Development
Consistent with previous budget requests from the Trump administration, the spending blueprint proposes significant cuts ($8.6 billion) to programs administered by the Department of Housing and Urban Development (HUD). Of particular interest to California’s counties, the budget eliminates the Community Development Block Grant (CDBG) program (-$3.43 billion), the HOME Investment Partnerships Program (-$1.35 billion), and the Choice Neighborhoods program (-$175 million). The White House has stated its belief that these programs are ineffective and lack measurable outcomes. Homeless Assistance Grants, on the other hand, would hold steady at current levels ($2.8 billion).
On the policy front, the HUD request includes a proposal requiring public housing beneficiaries to work and contribute more of their income to rent. It also proposes a new initiative to reduce unsheltered homelessness by supporting interventions to reduce the number of people who sleep on the street. The initiative would be targeted at cities with the largest increases in unsheltered homelessness in recent years.
Department of Health and Human Services
The Department of Health and Human Services would face $9.4 billion in funding cuts under the administration’s budget request, a nine percent reduction from current spending levels. Among other things, the White House is reiterating its call for legislation that would lower prescription drug prices. Incidentally, the administration for the first time does not call for the repeal of the Affordable Care Act. However, it should be noted that the proposed budget comes as the health care law is currently facing a constitutional challenge that could ultimately decide its fate.
In a positive development, county child welfare agencies would benefit from a proposal to allow programs rated evidence-based by the California Evidence-Based Clearinghouse for Child Welfare to be eligible for reimbursement under the Family First Prevention Services Act (FFPSA). Relatively few prevention services programs have been approved under the current FFPSA standards. The budget also proposes a legislative fix to address the FFPSA congregate care barrier identified by counties, which currently bars Medicaid payments to Qualified Residential Treatment Programs (QRTPs) under the Institutions for Mental Diseases (IMD) payment exclusion. The proposal would allow those group homes to receive federal reimbursement.
On the other end of the spectrum, the administration is proposing to eliminate the Social Services Block Grant (-$1.7 billion), the Community Services Block Grant (-$740 million), and the Low-Income Home Energy Assistance Program (-$3.75 billion).
Department of Transportation
The president’s budget proposes a $1 trillion investment toward an infrastructure package. It should be noted that Trump’s previous infrastructure proposal called for $1.5 trillion in spending. However, under that blueprint, the federal government would have only contributed $200 billion, while state, local, and private investment would have made up the balance. The latest budget proposal, on the other hand, would be fully funded by the federal government over a period of ten years.
Of the $1 trillion, $810 billion would be reserved for the nation’s highways, rail, and transit systems, while the balance of funds would go toward other infrastructure purposes, including broadband deployment to rural communities. Absent from the budget is a plan for how to ultimately finance this proposal.
Department of the Interior
The budget proposes a $2 billion cut to the Interior Department, a reduction of nearly 14 percent. While the budget for the Bureau of Land Management (BLM) would hold steady, sizable cuts are proposed for other sub-agencies, including the Bureau of Reclamation, the Fish and Wildlife Service, and the National Park Service.
At the programmatic level, and while the administration proposes an additional year of funding for the Payments in Lieu of Taxes (PILT) program ($442 million), the Land and Water Conservation Fund (LWCF) would take one of the biggest hits (a 71.4 percent cut). This contrasts heavily with a recent congressional increase to the LWCF, much of which was funded through federal offshore oil and gas receipts.
Finally, there are two key legislative proposals that have been carried over from the previous request, including a package of legislative reforms to improve forest management and another that would establish a Public Lands Infrastructure Fund to address infrastructure needs on public lands.
Department of Justice
The president’s budget would reduce funding to the Department of Justice by $730 million compared to current funding levels, which reflects a 2.3 percent cut. Among other things, the department seeks several categorical funding increases, including an additional $6 million to hire 10 new attorneys and support staff to boost the number of drug cases generated by the U.S. Attorney’s Office. The administration also is seeking $361 million for “opioid-related state and local assistance,” which includes money for treatment and recovery support. With regard to cannabis, the White House has proposed eliminating the long-standing policy that protects state-legal medical cannabis programs from federal interference. It should be noted that the so-called Rohrabacher-Farr rider, which has been in place since 2014, was also opposed by the Obama administration.
In the area of state and local law enforcement, the largest cuts are proposed for the State Criminal Alien Assistance Program (SCAAP), which is slated for elimination (-$244 million), and the COPS Hiring Program (-$136 million).
U.S. Department of Agriculture
President Trump has requested a $1.9 billion cut from USDA’s base discretionary budget, which amounts to a reduction of 8.2 percent. Consistent with previous spending proposals from the administration, the budget seeks significant cuts from the Supplemental Nutrition Assistance Program (SNAP)/CalFresh. These reductions would be in addition to the savings anticipated under a number of CSAC-opposed regulatory proposals, including increased work requirements for able-bodied adults aged 18 to 65. In addition, and despite being rejected by Congress the past two years, the USDA is proposing a program that would provide SNAP recipients with boxes of food instead of EBT benefits. The so-called “America’s Harvest Box” would generate over $121 billion over 10 years.
Army Corps of Engineers
For fiscal year 2021, the administration is requesting $6 billion for the Army Corps of Engineers, an amount that is $1.7 billion or 22 percent less than the fiscal year 2020 enacted levels. It should be noted that the White House only sought $4.8 billion in last year’s budget submission.
Environmental Protection Agency
The president’s budget requests $6.7 billion for the Environmental Protection Agency in fiscal year 2021. That amount is $2.4 billion, or 26.5 percent, below current spending levels. The White House is also proposing deep cuts to programs – including the Clean Water and Drinking Water State Revolving Funds – that help local communities upgrade their water infrastructure. Specifically, the Trump administration is requesting a total of $1.98 billion in fiscal 2021 for the aforementioned programs, a more than 28 percent decrease from the $2.77 billion Congress appropriated in fiscal year 2020.
Border Wall
President Trump’s fiscal year 2021 budget requests $2 billion for border barrier construction, enough to build 82 miles of wall. This is significantly below his previous request of $8.6 billion. These new funds would bring the total money set aside for the wall to more than $13 billion, including funds taken from military construction accounts.