On Monday, February 4, 2008, President Bush released his budget proposals for Federal Fiscal Year 2009.  This begins the federal process for determining the funding level for programs beginning October 1, 2008.   Some of the proposals in the President’s Budget proposal for FY 2009 look very familiar to those who follow human services spending.  Many program changes and funding cuts have been previously proposed by the Administration.  There is a new proposal to eliminate the Social Services Block Grant in 2010 and a new proposal for case management for disaster victims.  The following document examines the funding levels that the President has proposed for key human services programs for 2009.

The next major step in the process is the passage of a congressional budget resolution.  The budget resolution is considered by the House and the Senate and does not require the President’s signature.  It lays out the position of Congress on program funding levels for fiscal year 2009.  Under regular order, the Appropriations Subcommittees then make their decisions based on their budget allocations from the budget resolution.  Following that, the appropriations bills for Labor/HHS and Agriculture move to full committee and then the floor.  In other words, the release of the President’s Budget is only the beginning of a long and often contentious process. 

BUDGET HIGHLIGHTS

FOOD STAMPS AND OTHER NUTRITION ASSISTANCE PROGRAMS

Under the President’s proposal, The Commodity Supplemental Food Program would be eliminated.  The justification given is that it duplicates the Food Stamp and WIC programs.  Also, categorical eligibility for the Food Stamp program will be tightened under the President’s budget proposal.  Currently, recipients of TANF and SSI services can receive automatic eligibility for Food Stamps.  Previously the Administration had proposed making only those who are given cash assistance in those programs categorically eligible.    (Further detail on all of the nutrition assistance programs is below, in a separate section.)

TEMPORARY ASSISTANCE TO NEEDY FAMILIES (TANF)

The TANF program remains level funded at $16.9 billion in funding, plus contingency funds.  The budget document includes several legislative proposals related to TANF.  These include:

• Extending supplemental grants for states with high population growth or low levels of welfare spending before the TANF program was established in 1996; and
• Eliminating the separate two-parent work participation rate in the TANF program, a budget neutral proposal.

COMMUNITY SERVICES BLOCK GRANT (CSBG)

Once again, this $653 million program is zeroed out by the Administration in its budget proposal.

SOCIAL SERVICES BLOCK GRANT (SSBG)

The Administration is recommending a $500,000 cut this program, a previously proposed amount of reduction that would fund the program at $1.2 billion.  The HHS budget document reiterates the arguments that the SSBG is too flexible, and that it does not have state performance standards.  The latter argument ignores the fact that SSBG is transferred into other programs and then becomes subject to those programs regulations and evaluation.    In a new development, the Administration announced that it proposed to eliminate SSBG beginning in 2010. 

In a call today arranged by the White House with state and local organizations and officials, OMB Budget Director Nussle highlighted the proposal to eliminate the SSBG because it has not “demonstrated results required to be a federal program”.   He mentioned state and local complaints that there is too little bang for so much bureaucracy and that SSBG cannot show outcomes and achievements.  All of  the state and local organizations have historically supported SSBG funding because this original block grant’s flexibility.  He also mentioned that SSBG could not be used for child care.  Actually, SSBG is used by most states for child care along with a range of services for vulnerable populations including the elderly and abused and neglected children.

LIHEAP   (Low Income Home Energy Assistance Program)

Under the President’s budget proposal, this program takes a real hit.  The Administration is recommending a cut in the LIHEAP block grant ($280 million), the contingency fund ($40 million), and reflecting the emergency spending in the FY 08 Omnibus (zeroing out this $250 million) for a total reduction of $570 million.  The budget document seeks to downplay the impact of the reduction by noting that states also spend money on heating and cooling assistance, so that “LIHEAP is not the only source of assistance for low-income households with high home energy bills.” 

CHILD CARE AND DEVELOPMENT BLOCK GRANT

In terms of discretionary spending, child care is flat funded at the current level of $2.062 billion.  The mandatory portion of the child care grant would be $2.966 billion. 

HEAD START

Head Start would receive an increase of $148 million to bring its funding level to $7 billion.  At this level, 895,000 children would be served.

CHILD WELFARE/CHILD ABUSE PREVENTION

Child welfare services are funded at $287 million in mandatory and $327 million in discretionary funding.    

The Promoting Safe and Stable Families (PSSF) Program holds steady with the 2008 level of funding, with a total of $428 million--$365 million in mandatory and $63 million in discretionary funding.  Foster care mandatory funding would be $4.5 billion, a $118 million decrease HHS says reflects declining caseloads.    Adoption Assistance would be funded at $2.3 billion in FY 09, an increase of $130 million over FY 2008 levels.  Adoption Incentives are funded with $15 million increase, bringing funding to $19.6 billion.     Once again, budget includes a legislative proposal, which has been part of several previous budgets, for a Child Welfare Program Option, which would allow states to receive their foster care funding as a flexible grant over five years to support a number of services including foster care payments, prevention services, permanency efforts and case management.  States would agree to uphold the child safety protections outlined in the Adoption and Safe Families Act, maintain state investments in child welfare programs, and continue to participate in the Child and Family Services Reviews.  Participating states would be able to access the TANF contingency fund if they experience a severe crisis in foster care

FAITH BASED AND COMMUNITY BASED PROGRAMS

Compassion Capital Fund would receive an increase of $22 million, bringing its funding up to $75 million.  $35 million of that amount would go to Communities Empowering Youth, a grant aimed at presenting young people with alternatives to gang involvement and violence.   Mentoring the Children of Prisoners This discretionary program would receive $50 million in discretionary funding in the President’s proposal.  The Center for Faith Based and Community Initiatives would be funded at its current level of $1.3 million.  All three programs receive discretionary spending.  On the mandatory funding side,  Healthy Marriage and Responsible Fatherhood  grants are continued at the current level of $150 million.    

ABSTINENCE EDUCATION

There are several abstinence grant programs.  Community-based abstinence education programs will receive an increase in discretionary funding  of $27.674 million, for total funding of $136.664 million.   There is a proviso in the budget document that entities receiving such grants will not provide any other education regarding sexual conduct, except if that entity is required to do so by law.   The Title V abstinence education program—mandatory funding which goes to states—would be $50 million in 2009.  The budget also continues the abstinence-only program in the Adolescent Family Life program in the Office of Public Health and Science at $13 million a year. 

DISASTER HUMAN SERVICES CASE MANAGEMENT

The President is proposing a new program that will help coordinate getting assistance from human services programs to victims of a disaster.  The proposal in this year’s budget is for $10 million would fund a human services case management system for federally-declared disasters—planning grants, national case management contracts for recruiting, training and credentialing volunteers, and federal costs for administering the system.

CHILD SUPPORT ENFORCEMENT

The proposed budget anticipates the change, under the Deficit Reduction Act (DRA), to provide cost-sharing to states that opt to distribute more collections directly to current and former TANF families beginning in 2009.  It provides $3.8 billion net for the child support enforcement program.  It does not propose to make any changes to the current law DRA provision that prohibits states from using child support incentive payments to match federal child support funds.  The budget does propose a series of 10 legislative proposals including a new legislative proposal that will make technical changes to ensure that all child support enforcement services are available in international support cases. There are several child support proposals from previous President’s Budgets aimed at  improving states’ efforts to collect medical support on behalf of children, providing new options for tribal child support programs, allowing Federal seizure of accounts in multi-state financial institutions, requiring intercept of gambling proceeds, and providing for garnishment of Longshore and Harbor Workers’ Compensation Act benefits. An increase in funding for access and visitation grants to support non-custodial parents’ access to and visitation with their children is also proposed.

REFUGEES AND UNACCOMPANIED MINORS

 $628 million is requested to provide services for refugees and other entrants, unaccompanied alien children, and victims of torture and trafficking, $28 million less than FY 2008.  The budget mentions that some funds from FY2008 are expected to be carried over.  Transitional and Medical Service funds are available to provide eight months of assistance to 80,000 refugee arrivals in FY 2008 and expect to provide this level of support in FY 2009.  $114 million is proposed for the Unaccompanied Alien Children (UAC) program which provides care for unaccompanied alien minors who are apprehended in the United States by Homeland Security agents, Border Patrol officers, or other law enforcement. These children remain in ACF custody pending resolution of their relief claims under U.S. immigration law, or their release to an adult family member or responsible adult guardian.  The budget proposes an additional $5 million to respond to the special needs of children with psychiatric and behavioral disorders brought on by exposure to traumatic events, including trafficking, abuse, or violence.

ASSETS FOR INDEPENDENCE (AFI) PROGRAM

President Bush asked for AFI to be funded at the same level as in FY 2007 and FY 2008, $24 million.  This program promotes financial self-reliance through Individual Development Accounts (IDAs), or matched savings accounts, for low-income families.  The assets accumulated in these accounts can be used to purchase a first home, get post-secondary education, or start a small business.  The matched incentives are a public-private partnership through a variety of government and private sector sources.

The President also requested funding for two other federal programs designed to help low income families accumulate assets.   President Bush asked that the Department of Housing and Urban Development’s Resident and Opportunities Self-Sufficiency (ROSS) program be funded at $38 million, a slight decrease from FY 2008’s funding level of $40 million.  HUD’s Family Self-Sufficiency (FSS) program is requested to be funded at $48 million, which is the same as FY 2007’s funding but a decrease from FY 2008’s funding of $49 million. 

NUTRITION ASSISTANCE PROGRAMS

Food Stamps

The 2009 President’s Budget proposes a total  funding for the Food Stamp Program of $40.279 billion for FY 2009, an increase of $1.86 billion, to account for inflation and an anticipated 200,000 additional participants (bringing the total participation to 28 million).  The administration would like to see the payment accuracy rate to rise to 94.4% from 94.3%.  The increase includes nine million dollars that will go toward program evaluation and modernization: $2.5 million to alternative strategies to increase participation in elderly and poor; $4.5 million to modernize application and re-determination process; and two million dollars to evaluate Food Stamp Nutrition Education (FSNE) activities.  The Administration also proposes that three billion dollars of the Food Stamp budget be designated for contingency reserve, and requests an indefinite fund be available for the last four months if program needs are higher than expected.

The Administration’s Farm Bill proposal includes $66 million to simplify and modernize the Food Stamp Program for nutrition programs.  It also proposes to limit Food Stamp categorical eligibility of households receiving Supplemental Security Income (SSI) or Temporary Assistance for Needy Families (TANF) cash assistance.  The proposal asks for $37 million for an increase in fresh fruit and vegetable purchases for the National School Lunch Program and to conduct purchase study of this program every five years.

Child Nutrition Programs

The budget requests three million dollars for analysis of Child Nutrition Programs (two million dollars for analysis of School Nutrition and Dietary Assessment (SNDA), and one million dollars for estimation of Child and Adult Care Food Program (CACFP) payment errors).  A $671 million increase is proposed (bringing the total to $15.38 billion).  There are projected to be 15.7 million participants in the Free Lunch Program, and 32.1 million total participants in the National School Lunch Program per day (an increase of 500,000 participants) in FY 2009.  7.9 million participants are projected to be in the Free Breakfast Program and 11.2 million in the total School Breakfast Program per day (an increase of 400,000 participants).

Women, Infants, and Children (WIC)

The President’s Budget requests increased funding for Women, Infants, and Children (WIC) of $46 million (bringing the total funding to $6.25 billion).  This is intended to support an increase of 100,000 participants.  Language is proposed that would cap the national average grant per participant (AGP) for State Administration to $14.97, which would reduce the federal assistance to states to administer WIC by $145 million. The USDA describes this cut as an attempt to make States more efficient in their programming without needing to cut core spending of the program.  The Administration also proposes again to limit automatic WIC eligibility to Medicaid participants under the 250 percent of federal poverty guidelines.  The standard WIC income threshold is 185 percent.

Commodity Assistance Program (CAP)

The Administration wants to fund the Commodity Assistance Program (CAP) with $49.5 million in discretionary funding.  $140 million for commodities is available in other funding.  The President’s Budget eliminates the removal of the Commodity Supplemental Food Program (CSFP) citing overlaps with WIC and Food Stamp programs.  The 2008 CSFP program had an estimated 46,000 participants.  A transitional strategy is suggested to encourage current participants to apply for WIC and Food stamps.  This strategy includes providing $20 monthly for six months to CSFP participants 60 or older until the participant begins the Food Stamp Program.

Funding is requested for Farmers’ Market Nutrition Program (FMNP) and Seniors FMNP, but depends on the Farm Bill.  In 2006, 2.5 million WIC participants  were provided coupons by FMNP.  Farm Bill proposals request $15 million for Seniors FMNP; 826,000 Seniors  were given benefits from Seniors FMNP in 2006.

Flat funding was requested for the funding of The Emergency Food Assistance Program (TEFAP); Soup Kitchens and Food Banks are included in the existing funding available for commodities under CAP.

Nutrition Programs Administration (NPA)

An eight million dollar increase is requested for Nutrition Programs Administration (NPA) by the Administration (bringing the total to $150 million).  Of the increase, $5.7 million is to support financial and program oversight activities; two million dollars is for further development of the 2010 Dietary Guidelines for Americans and enhancements to MyPyramid.

* Total funds requested: $62.291 billion

**Farm Bill proposal: $118 million

For further information, please contact Sheri Steisel (Sheri.Steisel@ncsl.org) or Lee Posey (Lee.Posey@ncsl.org ) or call NCSL’s Washington, D.C. office at (202) 624-5400.

LABOR AND ECONOMIC DEVELOPMENT PROGRAMS

On Monday, February 4, 2008, President Bush released his budget proposals for Federal Fiscal Year 2009.  This begins the federal process for determining the funding level for programs beginning in October 1, 2008.  Some of the proposals in the President’s Budget for FY2009 look very familiar to those who follow labor and economic development spending.  Many program changes and funding cuts have been previously proposed by the Administration.  The following document examines the funding levels that the President has proposed for key labor and economic development programs for 2009.

The release of the President’s Budget is only the beginning of a long and often contentious process.  The next major step in the process is the passage of a congressional budget resolution.  The budget resolution is considered by the House and the Senate and does not require the President’s signature.  It lays out the position of Congress on program funding levels for fiscal year 2009.  Under regular order, the Appropriations Subcommittees then make their decisions based on their budget allocations form the budget resolution.  Following that, the appropriations bills move to full committee and then the floor.

DEPARTMENT OF COMMERCE

The President’s FY2009 budget requests $8.2 billion in discretionary funding for the Department of Commerce, an increase of $1.3 billion from FY2008.  Much of the increase in discretionary spending is in support of the preparations for 2010 Decennial Census.  In fact, more than a quarter of the FY2009 request is for the 2010 Census.  The Administration identified three major goals it intends to accomplish with the proposed budget for FY2009:

1. Maximize U.S. competitiveness and enable economic growth for American industries, workers, and consumers
   
2. Promote U.S. innovation and industrial competitiveness
   
3. Promote environmental stewardship

Budget Highlights

Economics and Statistics Administration (ESA)

ESA provides policy makers, business leaders, households, and individuals with essential economic data including the gross domestic product (GDP) and other regional, national, international, and industry-specific economic indicators and information.  The President’s FY2009 budget requests $91 million in funding for ESA and increase of $10 million from FY2008.

International Trade Administration (ITA)

ITA provides support to U.S. commercial interests through a variety of activities including strengthening the competitiveness of American industries and workers, promoting trade and investment, and ensuring compliance with both domestic and international trade laws and agreements.  The President’s FY2009 budget requests $420 million for ITA, an increase of $15 million from FY2008.

Economic Development Administration (EDA)

EDA assists states, regions and communities in promoting a favorable business environment through capacity building, planning, infrastructure investments, research grants, and initiatives.  The President’s FY2009 budget proposes funding EDA at $133 million and reducing funding to EDA programs by $149 million in order to support other administration priorities.

Minority Business Development Administration (MBDA)

MBDA promotes the ability of minority businesses to grow and participate in the global economy through increasing access to the marketplace and financing.  The President’s FY2009 budget proposes $29 million in funding, an increase of $377,000 from FY2008.

Department of Commerce FY2009 Budget Online Version:
http://www.whitehouse.gov/omb/budget/fy2009/pdf/appendix/com.pdf

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

President Bush’s FY2009 HUD Budget request is $38.5 billion and includes funding to support housing choice vouchers, project-based Section 8 housing, homeless assistance programs, vouchers for homeless veterans, housing counseling, Public Housing Agencies, and affordable housing programs such as the HOME Investment Partnerships Program.

Budget Highlights

Office of Community Planning and Development

The Community Development Block Grant program provides flexible annual formula grants to state and local governments to benefit mainly low-to moderate- income persons.  The President’s FY2009 budget proposes $3 billion in funding a decrease of $866 million from FY2008.

The HOME Investment Partnership Program (http://www.hud.gov/offices/cpd/affordablehousing/programs/home/) provides federal block grants to states and localities that communities use to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people.  The President’s FY2009 budget proposes $1.9 billion in funding an increase of $263 million from FY2008.

HUD programs such as Brownfields Economic Development Initiative, Community Development Loan Guarantee Program, and Rural Housing and Economic Development are proposed for termination.

Department of Housing and Urban Development FY2009 Budget Online Version:
http://www.hud.gov/about/budget/fy09/fy09budget.pdf

DEPARTMENT OF LABOR (DOL)

The President’s FY2009 budget request for the Department of Labor is $10.5 billion with a focus on the following priorities:

• Protecting workers’ safety and health;
• Protecting workers’ pay, benefits, pensions, and union member rights;
• Effectively serving our Nation’s veterans and transitioning service members;
• Modernizing the temporary foreign labor certification programs; and
• Increasing the competitiveness of America’s workforce by continuing reforms and strengthening policies that encourage growth, job creation, and opportunity.

Additionally, in FY2009 the Department plans on focusing more efforts on scrutinizing base funding to shift resources from lower priority, less effective programs, to those found to be a higher priority and more effective.

Budget Highlights

Employment and Training Administration (ETA)
ETA administers federal government job training and worker dislocation programs, federal grants to states for public employment service programs, and unemployment insurance benefits.  The President’s FY2009 budget proposes $7.9 billion in funding for ETA, a decrease of $1.6 billion from FY2008.

Career Advancement Accounts (CCA)
CCAs are self directed accounts of up to $6,000 over two years that would be available to adults, out-of-school youth.  A new program that according to the Department of Labor would maintain existing One-Stop Career Centers but reduce duplication and increase efficiency by consolidating funding for Workforce Investment Act (WIA) Adult, Dislocated Worker, and Youth and Employment Service programs into a single funding stream for states.  $2.8 million in funding is proposed for FY2009.  Adult Employment, Dislocated Worker, Youth Activities and WIA Competitive Grants would all be zeroed out as part of the proposal.  Combined funding for these programs was $2.9 million in FY2008.

For additional information, please contact Diana Hinton Noel (202-624-7779; diana.hinton@ncsl.org) or Robert Strange (202-624-8698; robert.strange@ncsl.org).

Transportation Programs

Washington, DC - The President released his proposal February 4th for the 2009 federal fiscal year budget (FY2009).  This begins the federal process for determining the funding levels for programs beginning October 1, 2008.   The next major step in the process is the passage of a congressional budget resolution.  The budget resolution is considered by the House and the Senate and does not require the President's signature.  It lays out the position of Congress on program funding levels for fiscal year 2009.  Under regular order, the Appropriations Subcommittees then make their decisions based on their budget allocations from the budget resolution.  Following that, the transportation appropriations bill move to full committee and then the floor.  In other words, the release of the President's Budget is only the beginning of a long and often contentious process.

In total, the President requested $68.2 billion for all Department of Transportation functions and responsibilities.  This figure is 3%, or $2.134 million, less than the FY2008 appropriation enacted in December 2007.  The Federal Highway Administration budget proposal is touted at $40.1 billion, which falls a bit short of SAFETEA-LU's $41.2 billion authorized level.  The FY2008 omnibus appropriations provided the full $41.2 billion.

In reality, the President's proposed FY2009 obligation limit is $39.4 billion when a $1 billion Revenue Aligned Budget Authority (RABA) deduction and $800 million in other rescissions of obligation authority are taken into account.  State legislators should also note that the SAFETEA-LU authorizing legislation provided for another $8.5 billion in rescissions in fiscal year 2009 that are not accounted for in the President's proposed $39.4 billion obligation limit.

The President's budget proposes an obligation limit for mass transit of $8.4 billion; $200 million in mass transit obligation rescissions are anticipated.  The President's budget recognizes the anticipated shortfall in Highway Trust Fund receipts for FY2009 and proposes to allow no-interest loans from the mass transit account to the highway account of the Fund.  These "repayable advances" would be returned to the mass transit account during FY2009 or at any time in the future when the highway account had funds in excess of its appropriated needs.

The Essential Air Service and Rural Airport Improvement Fund would be cut completely.

Operating grants to Amtrak, worth $475 million in FY2008, are zeroed out and rolled into a new Efficiency Incentive Grant program, proposed at $275 million for FY2009, which would be distributed to Amtrak at the discretion of the Secretary based upon proposals submitted by Amtrak.  The Capital Assistance to States Intercity Passenger Rail Grant Program, created in FY2008 at $30 million, is converted to an Intercity Passenger Rail Grant Program worth $100 million.  The budget proposal notes: 

Under this program, a State or States may apply for grants for up to 50 percent of the cost of capital investments necessary to support improved intercity passenger rail service that either requires no operating subsidy or for which the State or States agree to provide any needed operating subsidy. 

To qualify for funding, the States would have to include intercity passenger rail service as an integral part of the Statewide transportation planning ... [and] the specific project would have to be on the Statewide Transportation Improvement Plan at the time of application.

For REAL ID, the budget proposal for the Department of Homeland Security (DHS) includes $50 million for federal verification system development and connectivity support.  The $50 million state-focused grant program created in FY2008 is zeroed out in favor of a new $110 million National Security and Terrorism Prevention Grant program.  According to the budget document:
  
This program provides competitive grants to specific State and local agencies to support proposals which address national vulnerabilities identified by the Secretary as priorities.  In 2009, the Secretary will invite States to submit project proposals to support REAL ID implementation and buffer zone protection for critical infrastructure.

Further, the State Homeland Security Grant Program (SHSGP) program is cut from $890 million in FY2008 to $200 million in FY2009; DHS has asserted that states can use 20% -- or effectively all of the states' share of these funds as 80% must be passed through to localities -- for REAL ID implementation.

Prepared by: Jeremy Meadows