President's FY 2017 Budget

President's FY 2017 Budget

Introduction

 

On Monday, February 9, President Obama released his final budget. The $4.1 trillion fiscal year (FY) 2017 budget, which has been declared “dead on arrival” by congressional leaders, has been touted by the Obama Administration as a budget that will build “on our economic and fiscal progress.” 

 

What Does the President’s Budget Mean for the Budget and Appropriations Process?

 

In practical terms, the President’s Budget serves as a reminder to Congress of what funding levels Obama will accept when the arduous and often rancorous appropriations process begins this month. In political terms, it sets up the forthcoming congressional and presidential election cycle by helping to contrast Democratic and Republican spending and program priorities. In reality, it will have little direct impact on the budget plan the House and Senate draft in the next month because like the President’s Budget, the congressional budget will serve as much as a political statement as it will a statement of planned spending.

 

Are There Proposals that May Gain Bi-Partisan Support?

 

Despite the politics of the budget process, the ideas put forward in any presidential budget often find their way into the broader discussion and therefore the year’s appropriations bill. Proposals like the vice president’s “cancer moonshot,” which would invest more than $1 billion in efforts to find a cure for cancer, and expansion of research and development tax credits. That proposal, which would make the credit permanent and expand incentives for small business, and others are likely to gain bi-partisan support. In addition, the president’s proposal to invest $1.1 billion in new funding to address the prescription opioid abuse and heroin use epidemic is supported by much of the congressional leadership. The Earned Income Tax Credit, which President Obama would double for childless workers and parents who don't live with their children and lower the eligibility age for single workers to 21, has already received a positive response from Speaker of the House Paul Ryan (R-WI). For a PowerPoint slide outlining some of the programs that are likely to receive bi-partisan support click here.

 

Other proposals, such as expanding child care tax credits to lower and middle-income families, and additional support for programs designed to educate children with disabilities, may gain bipartisan support so long as the increases can be offset by program savings in other areas.

 

In addition, some housing proposals may also be met with a favorable response. Increased funding for housing vouchers and related services for very low-income and homeless families and programs to end veterans’ homelessness may become part of any congressional budget plan. There are also some proposals in the President’s Budget that would provide much needed resources to advance interoperability across human services systems that may elicit favorable congressional support.

 

Which Budget Proposals Are Not Likely to Be Adopted By Congress?

 

Yet other budget proposals, whether purely policy or fiscal, like expanding paid leave by funding state-based initiatives to provide paid family and medical leave, and increases in Pell Grant maximum benefits, serve more as campaign slogans than proposals likely to be adopted.

 

And still other proposals, like ensuring near-universal access to workplace retirement savings plans may have strong bi-partisan support but little likelihood of succeeding because of the potential costs and partisan disagreements on how to approach these efforts.

 

What Will Happen to Human Services-related Funding?

 

From the human services perspective, it remains too early in the budget and appropriations process to know whether some programs with funding increases will gain the support necessary to be seriously considered during the budget and appropriations process.

 

Temporary Assistance for Needy Families:  For example, can a proposal to increase the Temporary Assistance for Needy Families (TANF) block grant by $8 billion over four to five years gain traction? Though this would mark the first increase in funding since 1996, when the Personal Responsibility and Work Opportunity Act became law, it is unclear whether this Congress has the appetite to increase funding for TANF at the same time that it is trying to reauthorize the program. 

 

Can a proposal to alter the TANF federal work requirements to demonstrate actual employment outcomes come to fruition? While there has been substantial conversation suggesting a bi-partisan agreement on this issue, conservative advocacy groups are urging Congress to tighten the federal work requirements. The result is that discussions have stopped and it is unclear when or how this issue will be resolved. 

 

In this context, it is too early to know whether the president’s proposal to address some of TANF’s weaknesses – inadequate funding, decreased focus on serving those most in need, rules that limit state flexibility to create innovative work programs, and increasing food insecurity – will be a part of any budget and appropriations process. But what we do know is that there is agreement across Capitol Hill that changes in our anti-poverty efforts must be made if we are to reduce poverty, help individuals find meaningful, productive and well-paying work, and move families from dependency to economic self-sufficiency

 

Children, Youth and Families:  The President’s Budget includes significant investments designed to improve outcomes for children, youth and families. It significantly increases the child tax credit to $3,000 per child, and extends the credit to more middle-income families. With a growing emphasis on early childhood education being critical to growth and development, the budget provides $1.3 billion for Preschool for All and $350 million to build and enhance infrastructures in high-need communities. The budget also includes $100 million more for the Preschool Development Grants program, an additional $434 million in mandatory funds for the Head Start program, and an additional $292 million to build on last year’s investment in expanding the number of Head Start programs that are full-day and full-year.

 

Returning to child care, the budget includes $82 billion in additional mandatory funding (over 10 years) to increase low- and moderate-income working families access to quality, affordable childcare. It also proposes $201 million in discretionary funds above the 2016 enacted level to help states implement policies required by the new Child Care Development Block Grant, as well as helping communities create high-quality child care options in rural areas and during non-traditional hours. In addition to increasing funding for childcare programs under the U.S. Department of Health and Human Services, the budget also increases support for early childhood education programs administered by the U.S. Department of Education. This includes early childhood education programs that support healthy child development and academic success later in life, and support low- and middle-income parents’ full participation in the workforce.

 

This budget also supports efforts to promote permanency, safety and well-being among children and youth in foster care. There is funding for early preventative services to vulnerable families so that their children may remain in the home. There is funding proposed to increase the likelihood that children who do enter foster care are reunited with their families or placed in a permanent home. There is funding to help foster youth become successful adults. And there is funding to help Tribes operate effective child welfare systems.

 

The president’s proposes additional funding for prevention and early intervention services including: $109 million for Child Abuse Prevention, more than $1 billion to combat opioid and heroine addiction, $920 million to expand access to mediation-assisted treatment, $50 million in National Health Service Corps funding for substance abuse treatment, and an estimated $500 million for state-level prescription drug overdose prevention strategies.

 

There is also funding to help improve the training and skills of the child welfare workforce. And there is a proposal to fund demonstration projects that encourage psychosocial interventions so that the use of psychotropic drugs are limited. Whether Congress will adopt these recommendations remains to be seen even though they align with many of the changes being proposed in congressional legislation.

 

The budget also seeks to maintain the Children’s Health Insurance Program (CHIP), which runs out of funds at the end of fiscal year 2017, by extending funding through fiscal year 2019.

 

Anticipating a decline in food stamps participation, the President’s Budget proposes $81.7 billion, a small decrease in funding for the Supplemental Nutrition Assistance Program (SNAP). It also level funds ($6.35 billion) the Women, Infants, and Children (WIC) supplemental nutrition program will be level funded.  Nonetheless, there is also funding for states to improve SNAP access for elderly individuals if they chose to participate, and increased funds for the Emergency Food Assistance Program. The budget also calls for $127 million to establish a permanent summer Electronic Benefits Transfer (EBT) program for children to reduce child hunger during the summer.

 

Of interest will be the impact that Republican and Democratic congressional taskforces on poverty and opportunity established by Speaker Paul Ryan and Democratic Leader Steny Hoyer (D-MD), respectively, will have on budget decisions. The task forces, which were announced last week, are designed to look at the broad array of reasons individuals and families fall into poverty, the existing programs how they do or do not promote opportunity, and what types of new initiatives might help reduce poverty and increase opportunity.

 

What Will Happen to Workforce and Training Funding for Those Most in Need?

 

Another unknown is how Congress will respond to a number of significant workforce development proposals, including a 5 percent increase in funding for adult training programs, and the establishment of a number of new programs including more than $10 billion in mandatory spending to pay for unemployment and American Jobs Centers upgrades. The Workforce Investment and Opportunity Act (WIOA), which would benefit from some of these increases, is very popular among Republicans and Democrats, as are efforts that align TANF and WIOA employment outcomes and measures, and get people back to work.  Still, that may not translate into increased funding for employment and training programs, including WIOA.

 

The workforce proposals, if adopted, would fund a wide range of initiatives that would expand childcare, increase access to job training, provide workers with better access to quality jobs, develop financial empowerment programs and help low income workers become economically self-sufficient. These include formula grant programs designed to help low-income adults, dislocated workers, and disconnected or what are now being referred to as “opportunity” youth. In addition, the president has requested that $600 million in mandatory funding be appropriated to create the American Talent Compact to create effective regional partnerships to train a half million people in high-demand jobs and $400 million in mandatory funds to expand the Apprenticeship Training Fund. To connect young people to work, the budget will, in addition to fully funding WIOA youth programs, provide $5.5 billion in mandatory funding over four years to engage young people in education and the workforce through summer job programs and year-round first jobs and to high rates of youth disengagement.

 

Conclusion

 

While there is no doubt that the President’s Budget faces a very skeptical Congress, there are numerous proposals that stand a significant chance of moving forward given the general support that these programs receive. These include cancer research, the Earned Income Tax Credit, and funding to address the opioid and heroine epidemic currently running rampant. Less popular programs may also gain support in the budget process because of the desire of the new House Speaker, Paul Ryan, to address the issue of poverty and find ways to increase opportunity and upward mobility. Enhancements to TANF and extra spending on WIOA may be just two that benefit from these new initiatives. And still other requests like child welfare and child care may move forward because they align with authorizing legislation that the Congress has begun considering. 

 

Additional Information

 

For a PowerPoint slide deck highlighting by federal department proposed funding for major non-defense discretionary programs please click here. For a chart highlighting proposed funding for major discretionary and mandatory programs click here. For a PowerPoint slide outlining the budget and appropriations process click here.


This Week in Washington