President Trump Releases “Skinny” Budget Blueprint for FY 2018

Prepared by:  Wes Huffman (whuffman@wpllc.net)

The White House released its budget blueprint for FY 2018 today.  The document, titled “America First: A Budget Blueprint to Make America Great Again,” outlines the plans of the Trump Administration for discretionary programs.  In short, the budget calls for extensive cuts to domestic programs to help fund increases for defense and homeland security.  

In total, the FY 2018 budget calls for $59 billion in discretionary spending at the Department of Education, compared to $68.2 billion this fiscal year. The proposal eliminates over 20 programs it says “do not address national needs, duplicate other programs, or are more appropriately supported with State, local, or private funds.” The programs proposed to be cut include Striving Readers, Teacher Quality Partnership, Impact Aid Support Payments for Federal Property, and International Education Programs.

As with all budget proposals presented to Congress by a president, Members almost automatically remind the Administration that it is Congress that writes the budget. It will be up to the House and Senate to decide which proposals make it into final spending bills. “The President proposes, but Congress disposes” is a familiar refrain on Capitol Hill.  This year, it seems particularly apt. Leading up to this morning’s announcement, Democrats and Republicans alike voiced strong opposition to elements of the White House plan.

“The Administration’s budget isn’t going to be the budget,” said Senator Marco Rubio (R-FL). “We do the budget here. The Administration makes recommendations, but Congress does budgets.”

On the other side of the aisle, Ranking Member of the Senate Appropriations Committee Senator Pat Leahy (D-VT) opined, “I think one of the reasons they’re proposing [big spending cuts] is that they know they won’t ever get through Congress; they know they’d be a disaster for their own party if they did. It makes for a great talking point. It actually fits on a tweet.”

However, the budget request does act as a marker for the President’s priorities and vision for the country. According to Office of Management and Budget (OMB) Director Mick Mulvaney, “This budget represents a President who is beholden to nobody but the voters…He is following through on his promises. We did not consult with special interests on how to write this budget. We did not consult with lobbyists on how to write this budget. The President’s team wrote this budget and that’s what you’ll see in the numbers.”

Department of Education

Higher Education in the “Skinny Budget”

In terms of higher education and student aid, the budget proposes the elimination of the Federal Supplemental Educational Opportunity Grant (SEOG) and proposes significant cuts for the Federal Work Study program. In making the proposals, the budget points to problems with the allocation formula in the Campus-Based programs, which has long been a tactic of those looking to eliminate the programs.

The budget remains silent on the fate of Perkins Loans, but this is because it does not deal with mandatory spending or revenues, only the discretionary side of the budget.  However, the focus on problems with the allocation formulas in the Campus Based Aid programs and references to simplifying the student aid programs are troubling, but not insurmountable.  Notably, the COHEAO Campus Flex Proposal addresses problems with the allocation formula and combines the concepts of simplification and local control for a small portion of the aid programs. 

The budget “safeguards” the Pell Grant program, providing enough discretionary funding to support the maximum award and current beneficiaries under current law.  However, it also calls for a $3.9 billion cut from a $10.6 billion program surplus. Student aid advocates had hoped to maintain the surplus or at least use it toward additional student aid. Pell funding can be tricky to estimate, particularly as it is a hybrid of discretionary and mandatory spending streams, but the administration argues the $3.9 billion cut can be done while keeping the program “on sound footing” for the next ten years.  A decision to “raid” the Pell surplus also makes funding “year-round Pell Grants” a much more difficult task. 

College-prep programs are facing cut, including nearly $200 million to Trio and GEAR-Up programs which help disadvantaged students in middle and high schools prepare for college.  Trio and GEAR-Up would receive $808 million under this budget, $193 million less than this fiscal year.

The proposal “maintains” $492 million in funding for Historically Black Colleges and Universities and Minority-Serving Institutions (MSIs).  There are cuts for the two parts of the Higher Education Act that provide direct assistance for MSIs, but this seems limited to the Strengthening Institutions Program, which does not include an MSI requirement.  As it is the “skinny budget,” details remain unclear, but it appears the Administration may be eliminating Strengthening Institutions, but maintaining the funding for MSI programs.  The budget calls for $492 million in MSI funding.  Under current law, Titles III and V receive $577 million.  Of that, roughly $492 million goes to MSIs and $85-86 million goes to Strengthening Institutions. 

K-12 Education

In addition to significant cuts at the Department of Education, President Trump is also proposing to shift $1.4 billion in new spending toward a campaign pledge related to school choice, describing the plan as the first step toward investing $20 billion in school-choice initiatives. This includes expanding charter schools, private-school vouchers and other alternatives to traditional public schools. Specifically, charter schools would see a $168 million increase — 50 percent above the current level — and there is  a new $250 million private-school choice program.

The budget does call for an additional $1 billion for Title I; however, these new funds would be used to encourage districts to adopt a controversial form of choice known as “portability” that would allow local, state and federal funds to follow children to whichever public school they choose. Title I portability was discussed often during last year’s debate on reauthorizing the Every Student Succeeds Act (ESSA), but Congress ultimately chose not to include these provisions in the final product.  Nevertheless, many conservatives see this as critical to K-12 education reform. 

Two popular programs—ESSA Title II on teacher preparation and 21st Century Learning Centers on afterschool and summertime activities—would also be eliminated to save $3.3 billion. The Individuals with Disabilities Education Act (IDEA) — another strongly supported bipartisan investment — remains unchanged. 

Other Agencies of Interest

Health and Human Services

The FY 2018 budget requests a 17.9 percent cut in HHS funding. Surprisingly, the Blueprint proposes a $15.1 billion cut to the National Institutes for Health (NIH), including eliminating $403 million in health professions and nursing training programs, which “lack evidence that they significantly improve the Nation’s health workforce.”

As details remain scant, it is difficult to say if the proposal will have an adverse impact on the loan programs administered by HHS.  In addition to calling for cuts, the proposal states, “The Budget continues to fund health workforce activities that provide scholarships and loan repayments in exchange for service in areas of the United States where there is a shortage of health professionals.”

The proposal also calls for a “major reorganization” of the 27 NIH institutes and centers, eliminating the Fogarty International Center and consolidating the Agency for Healthcare Research and Quality within NIH. NIH cuts will not find supporters among a great number of Members of Congress, who are passionate about this agency and believe its funding has been “cut to the bone” in recent years.

Next Steps

What are the next steps? After considering the White House’s proposal, Congress will begin its process of holding hearings to debate the request and ask Cabinet officials to testify before appropriations subcommittees.

With the lack of detail in the “skinny budget” Congress will be forced either to make many of the hard decisions in its appropriations bills, or simply delay congressional action entirely until the Administration’s “full budget” is released sometime in May. The May proposal will also include information on mandatory programs, which is likely to provide much more information on the Trump Administration’s thoughts regarding student loans, including Perkins. 

Regardless, the process has begun. In fact, the House will begin its hearings next week with the Labor, Health and Human Services and Education Appropriations Subcommittee holding a hearing on Tuesday about NIH. On Wednesday, Education Secretary Betsy DeVos was to appear, but there are rumors circulating that the hearing will be delayed.

Lastly, President Trump and Congress must also begin to think about raising the debt ceiling, which is always a politically charged debate. Although the ceiling was extended until yesterday, March 15th, through the Bipartisan Budget Control Act of 2015, budget experts say the government should be able to continue borrowing money by suspending or stretching out payments through August or September. More interesting debates are ahead.

For more information about the budget Blueprint go here.

 

 

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