Category Archives: Budget – United States

What Trump’s Proposed 2018 Budget Would Mean for Higher Ed

Source: Adam Harris, Chronicle of Higher Education blog, May 23, 2017

Updated (5/23/2017, 2:19 p.m.) with details on the budget proposals for scientific and medical research.

The Trump administration on Tuesday released its budget proposal for the 2018 fiscal year. All told, the budget would cut federal education programs by more than $10 billion. The Department of Education’s total operating budget would be slashed by $9 billion, and spending on secondary-education programs would be redirected to school-choice initiatives — the chief policy goal of Betsy DeVos, the education secretary.

President Trump’s budget would eliminate the public-service loan-forgiveness program, subsidized Stafford Loans, and Supplemental Educational Opportunity Grants; begin to phase out the National Endowments for the Arts and for the Humanities; and allow the Perkins Loan program to expire. It would also cut spending in half on Federal Work-Study programs, slash the budget of the National Institutes of Health by a fifth, eliminate programs that foster foreign-language study, and reduce spending that supports international-education programs and exchanges, such as the Fulbright Scholar program, by 55 percent….

New Trump Budget Eliminates Arts, Humanities, Library Agencies

Source: Jackie Zubrzycki, Education Week, Curriculum Matters blog, May 23, 2017

The National Endowment for the Arts, the National Endowment for the Humanities, and the Institute of Museum and Library Sciences would begin shutting down in 2018 if President Donald Trump’s 2018 budget, released today, is approved by Congress.

The $4.1 trillion budget, called “A New Foundation for American Greatness,” involves significant tax cuts, an increase in spending on the military and border security, and cuts to domestic programs like Medicaid along with the arts, humanities, and library agencies.

Trump’s initial budget proposal, released in March, involved cutting the endowments and IMLS, which support education programs around the country. Supporters breathed a sigh of relief when the endowments received extra funds through the end of 2017. ….

But Trump’s new budget again calls for the elimination of the agencies, asserting that the endowments are not “core federal activities” and that getting rid of the IMLS will likely not cause “a significant number” of libraries and museums to close.

Jim Martin Table: FY 2018 President’s Budget

Source: Federal Funds Information for States, May 2017
(subscription required)

The Jim Martin table is an homage to Jim Martin, a long-time director of federal relations at the National Governors Association and a big supporter of FFIS in its early days. He requested the table because he wanted to show changes in federal funding for major programs on one sheet of paper. We’re told he carried it wherever he went, including Washington, DC’s metro, where he was seen distributing it to anyone who was interested. Alas, Jim is gone but his eponymous table lives on.

Jim Martin Table: FY 2018 President’s Budget
May 23, 2017
The Jim Martin Table has been updated to reflect the president’s FY 2018 budget request.
Full Report

Jim Martin Table: FY 2017 Omnibus
May 2, 2017
The Jim Martin Table has been updated to reflect funding under the Consolidated Appropriations Act, 2017 (H.R. 244).

Policymakers Cut Housing Vouchers in 2017

Source: Douglas Rice, Center on Budget and Policy Priorities, Off the Charts blog, May 18, 2017

The bill that President Trump signed into law to fund the government for the rest of fiscal year 2017 has insufficient funding to renew all of the Housing Choice Vouchers in use last year, leaving a gap of roughly 60,000 vouchers. While some state and local housing agencies can use emergency reserves to close part of the gap, tens of thousands fewer low-income families will likely receive help this year, worsening the shortage of affordable housing. Already, 3 in 4 low-income families that struggle to pay rent receive no federal rental aid….

The Nation’s Fiscal Health: Action is Needed to Address the Federal Government’s Fiscal Future

Source: Statement of Gene L. Dodaro – Comptroller General of the United States, United States Government Accountability Office, Testimony Before the Committee on the Budget, U.S. House of Representatives, GAO-17-579T, May 3, 2017

From the Fast Facts:
The Comptroller General testified before Congress about the federal government’s unsustainable long-term fiscal outlook—the growing imbalance between revenues (money collected) and spending (driven by health care, Social Security, and net interest on the debt).

A plan is needed to put the nation on a sustainable long-term fiscal path. But in the near-term, Congress and executive branch agencies have opportunities to improve the government’s fiscal condition, including trying to address improper payments and the tax gap, as well as making changes where federal programs or activities are at high risk or fragmented, overlapping, or duplicative….
Related:
Highlights

Federal Funding Insulated State Budgets From Increased Spending Related To Medicaid Expansion

Source: Benjamin D. Sommers, and Jonathan Gruber, Health Affairs, Vol. 36 no. 5, May 2017
(subscription required)

From the abstract:
As states weigh whether to expand Medicaid under the Affordable Care Act (ACA) and Medicaid reform remains a priority for some federal lawmakers, fiscal considerations loom large. As part of the ACA’s expansion of eligibility for Medicaid, the federal government paid for 100 percent of the costs for newly eligible Medicaid enrollees for the period 2014–16. In 2017 states will pay some of the costs for new enrollees, with each participating state’s share rising to 10 percent by 2020. States continue to pay their traditional Medicaid share (roughly 25–50 percent, depending on the state) for previously eligible enrollees. We used data for fiscal years 2010–15 from the National Association of State Budget Officers and a difference-in-differences framework to assess the effects of the expansion’s first two fiscal years. We found that the expansion led to an 11.7 percent increase in overall spending on Medicaid, which was accompanied by a 12.2 percent increase in spending from federal funds. There were no significant increases in spending from state funds as a result of the expansion, nor any significant reductions in spending on education or other programs. States’ advance budget projections were also reasonably accurate in the aggregate, with no significant differences between the projected levels of federal, state, and Medicaid spending and the actual expenses as measured at the end of the fiscal year.

Trump Tax Plan Would Make States’ Job Still Harder

Source: Iris J. Lav, Center on Budget and Policy Priorities, May 1, 2017

The new Trump tax plan would rob states of revenues they need to serve their residents at a time when states already face significant fiscal distress, with over half of them projecting budget shortfalls for fiscal year 2018. And it would add to the problems caused by the President’s proposed cuts next year in funding for important state and local services, as well as congressional proposals to shift large health care costs to the states by repealing the Affordable Care Act and sharply cutting federal Medicaid spending.

Several parts of the Trump tax plan would affect state revenues ….

The “Better Way” House Tax Plan: An Economic Analysis

Source: Jane G. Gravelle, Congressional Research Service, CRS Report, R44823, April 25, 2017

On June 24, 2016, House Speaker Paul Ryan released the Better Way Tax Reform Task Force Blueprint, which provides a revision of federal income taxes. For the individual income tax, the plan would broaden the base, lower the rates (with a top rate of 33%), and alter some of the elements related to family size and structure by eliminating personal exemptions, allowing a larger standard deduction, and adding a dependent credit. For business income, the current income tax would be replaced by a cash-flow tax rebated on exports and imposed on imports, with a top rate of 20% for corporations and 25% for individuals. The cash-flow tax would be border-adjusted (imports taxed and exports excluded), making domestic consumption the tax base. The system would also move to a territorial tax in which foreign source income (except for easily abused income) would not be taxed. In addition, the proposal would repeal estate and gift taxes. Although the Affordable Care Act (ACA) taxes are not repealed in the Better Way tax reform proposal, ACA taxes are repealed in the Healthcare Task Force proposals. One objective of tax reform is to increase output and efficiency. However, the plan’s estimated output effects appear to be limited in size and possibly negative. ….