Federal Budget Update Intergovernmental Relations Committee March - - PowerPoint PPT Presentation

CITY OF MINNEAPOLIS

Federal Budget Update

Intergovernmental Relations Committee

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March 30, 2017

Federal Budget Overview

• Process (February-September)
• President submits budget to Congress
• House and Senate pass budget resolutions setting

budget appropriation amounts for respective subcommittee assignments

• House and Senate Appropriation subcommittees

develop bills and reconcile through a conference committee

• House and Senate vote on appropriation bills-in recent

years through an Omnibus package

• President signs each appropriation bill or omnibus
• If no appropriation signed by start of federal fiscal year

(October 1) then agencies operate under a Continuing Resolution

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Federal Budget Overview

• Key dates in current FY17 and FY18 Budgets
• March 16- President Trump presented his Budget

Blueprint for FY18 and additional FY17 funding

• April 28 - the temporary, government-wide FY17

Continuing Resolution funding bill expires. Unless new legislation passes, government would partially shut down.

• May – the President will reveal the remainder of his
• budget. Congress will work on its annual budget

resolution.

• Summer/Fall – Congress will try to advance

spending bills for the 2018 budget year, which begins on October 1.

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Presidents FY18 Budget Proposal

Issued March 16

• Proposal adds $54 billion to defense budget caps

and reduces nondefense budget caps by the same amount

• Caps set in the Budget Control Act of 2011 (“Sequestration”)
• Increases requested for Departments of Defense,

Homeland Security and Veterans Affairs with deep cuts for several agencies

• At least 80 programs and offices/agencies slated for elimination
• Would result in a 1.2% cut in discretionary

spending over all

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FY17 and Defense Supplemental

• Proposal increases base defense spending by $25

billion and reduces nondefense programs by $15 billion

• $5 Billion for Overseas Contingency Operations Fund
• $3 Billion increase for Department of Homeland

Security for:

• Planning and construction of southern border wall
• Hiring more Border Patrol and ICE
• Offset with $18 Billion in undetermined Non-

Defense Discretionary funds

• Balance of $10 Billion is addition to national debt

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President’s FY18 Discretionary Budget Levels

($Billions)

551 519 549 516

603 462 $0 $100 $200 $300 $400 $500 $600 $700

Defense Non-Defense FY17 FY18 Trump Proposal

FY18 Budget Proposal is Only 27% of the Story

13% 14% 73%

Domestic Discretionary Defense Mandatory Entitlements

• May necessitate additional budget cuts to achieve balance

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What isn’t included in the budget?

• Specific program-level details for discretionary

spending with exception of some highlighted programming

• Corporate and/or individual income tax change

proposals

• Potential changes to mandatory programs, such as

Medicaid or Medicare

• Specifics on potential changes to the Affordable Care

Act

• Any changes would have budgetary effects on both

spending and revenue

• Infrastructure financing

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Agency 2017 baseline 2018 proposal

• Pct. change

Environmental Protection Agency $8.2 $5.7 –31% State and other development programs 38.0 27.1 –29% Agriculture 22.6 17.9 –21% Labor** 12.2 9.6 –21% Justice** 20.3 16.2 –20% Health and Human Services** 77.7 65.1 –16% Commerce 9.2 7.8 –16% Education 68.2 59.0 –14% Transportation** 18.6 16.2 –13% Housing and Urban Development** 36.0 31.7 –13% Interior 13.2 11.6 –12% Energy 29.7 28.0 –6% Treasury 11.7 11.2 –4% NASA 19.2 19.1 –1% Veterans Affairs 74.5 78.9 +6% Homeland Security** 41.3 44.1 +7% Defense 521.7 574.0 +10% ** Agencies covered in further detail

Labor

• 2018 Proposal - $9.6 billion
• ⬇$2.5 billion

⬇–21%

• Scales back on a number of job training programs,

including those aimed at helping seniors, disadvantaged young people and unemployed Americans

• Minneapolis receives pass through job training

funds through the State

• Approximately $2 million received annually

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Justice

• 2018 Proposal - $16.2 billion
• ⬇$4 billion

⬇–20%

• Cuts funds classified as “mandatory,” such as the Crime

Victims Fund

• Increases funding for border enforcement, immigration

judges and F.B.I.

• Minneapolis averages $1 million over past five years in

competitive grant awards from Justice programs

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Health and Human Services

• 2018 Proposal - $65.1 billion
• ⬇$12.6 billion

⬇–16%

• Eliminates $4.2 billion in community services programs like

the Low Income Home Energy Assistance Program and Community Services Block Grant

• Key funding for community partners such as CAPSH
• Cuts spending at the National Institutes of Health by $5.8

billion

• Minneapolis receives direct funding awards for Healthy

Start and Maternal, Infant and Early Childhood programs

• Approximately $1.5 million

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Transportation

• 2018 Proposal - $16.2 billion
• ⬇$2.4 billion

⬇–13%

• Initiates the privatization of the nation’s air traffic

control operations

• Elimination of TIGER grants
• Federal Transit Administration New Starts would only

continue for those with full funding grant agreements in place, affects funding status of:

• Blue Line Extension
• SWLRT
• Orange Line BRT

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Housing and Urban Development

• 2018 Proposal - $40.7billion
• ⬇$4.3 billion

⬇–12%

• Eliminates the Community Development Block Grant

Program

• Eliminates HOME Investment Partnerships
• Loss of $12 million in formula entitlement to City
• Elimination of Choice Neighborhoods- a

redevelopment source of funds for public housing agencies

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Homeland Security

• 2018 Proposal - $44.1 billion
• ⬆+$2.8 billion

⬆+7%

• Increase of $4.5 Billion (in additional funding over the net

budget) for southern border wall and immigration enforcement enhancements

• $314 million for 500 Border Patrol agents and 1,000 ICE

personnel

• Reduction of $667 million in FEMA emergency preparedness

funds

• Emergency preparedness grantees would need to provide

25% local cost share

• Minneapolis averages $1 million over past five years in

emergency preparedness grant awards

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Other Local Budget Implications to Note

• Elimination of US Interagency Council on Homelessness
• Elimination of Legal Services Corporation
• Elimination of Economic Development Agency
• Elimination of arts and culture funding, including:
• National Endowment for the Arts
• National Endowment for the Humanities
• Corporation for Public Broadcasting
• Institute of Museum and Library Services
• No infrastructure funding at this point- potential later

request likely would necessitate further cuts

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Impact on the City Budget

• Reduction to FEMA administered grants
• Proposal to establish a 25% non-federal cost match for

FEMA preparedness grants

• Elimination of CDBG and HOME funds
• Likely decrease in level of Department of Labor

workforce training funds

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$- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $110 2009 2010 2011 2012 2013 2014 2015 Millions

Annual Federal Expenditures by Minneapolis (in millions)

Expenditures Affected by Trump Budget Eliminations All Federal Expenditures (in millions)

$69 $97 $78 $66 $47 $31 $38

Budget Prospects

• In both chambers, most programs cited for elimination have

bipartisan advocates

• Budget has an uphill battle in the Senate:
• Republicans hold 52 seats, bipartisan support needed for the 60 votes

required to overcome a filibuster

• Exceeding sequestration budget levels also requires 60 votes to
• vercome a filibuster
• Democrats have indicated that any increase in spending caps would

need to include 1-1 paired increase of domestic discretionary programs with defense

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Additional Considerations

• Again, proposed budget covers only discretionary

spending- no mandatory spending, no tax expenditures, no revenues

• Generally budgets include out years as well to provide

a picture of Administration fiscal priorities

• The Non-Defense Discretionary piece of the budget
• nly accounts for 4% of spending growth over the

next decade.

• Social Security, Health Care, Mandatory programs, and

Interest account for 90% of future growth

• Budget Sequester “deal” runs through 2024

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Next Steps in Process

• FY17 continuing resolution (CR) set to expire April 28
• A year long CR is possible for remainder of FY17, or
• An agreement on some type of omnibus bill for FY17
• Senate Democrats have threatened a shut down if any controversial

provisions are included (Planned Parenthood, defense spending, etc.)

• OMB warned department heads against discussing specific

details at congressional hearings until the release of the full FY18 budget

• Many hearings now postponed, meaning work on FY18 will be

delayed

• May budget will have the inclusion of recommendations on

mandatory spending and tax policy

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Questions?

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