President’s FY 2021 Budget Analysis Breakdown

2/17/2020

President Donald Trump officially released his $4.8 trillion budget request for FY 2021 last week, calling for a 5% or $590 billion reduction in domestic discretionary spending while investing heavily in defense spending at a level of $636.4 billion, to include the creation of the U.S. Space Force.

The agencies experiencing largest reductions include the Department of Commerce, Environmental Protection Agency, and the State Department. Veterans Affairs would receive the largest increase, with the National Aeronautics and Space Administration, Homeland Security and Treasury departments following suit. 

Considered an aspirational budget that officially launches the FY 2021 appropriations process, the budget also includes $2 billion to fund a southern border wall, and $1 trillion in infrastructure funding. The proposal would ignore the spending cap level enacted last summer in the Bipartisan Budget Agreement and assumes the U.S. economy will grow 3% in the coming years, more than 1% higher than most analysts have predicted.

Finally, the proposal also assumes Congress will extend tax cuts enacted in the 2017 tax reform law, which are currently set to expire in 2025. The budget would increase deficit spending to almost $1 trillion in 2021.

An analysis of key items of interest in the proposal follows. NCSL will track, monitor, and advocate on behalf of states interests as the appropriations season progresses.

Agriculture

  • Requests $21.8 billion for the U.S. Department of Agriculture (USDA), an 8% decrease from the FY 2020 enacted level.
  • Proposes $240 billion in net mandatory savings over 10 years from USDA programs to reduce long-term deficits, totaling $50 billion in reductions by 2030. This includes $43 billion in reductions to farm programs over the next 10 years such as a $9.1 billion reduction to conservation assistance, including the Conservation Stewardship Program, as well as disaster assistance for livestock producers, which would be eliminated, saving $5 billion.

Commerce

  • Requests $7.8 billion for the Department of Commerce, a $7.3 billion or 48% decrease from the FY 2020 enacted level, including changes in mandatory programs.
  • Requests $99.2 million for the International Trade Commission, a slight increase from the $99.4 million enacted in FY 2020.
  • Requests a decrease of nearly $10 million in funding for the Export-Import Bank. Specifically, the budget would authorize $100 million for expenses, down from $110 million authorized in FY 2020.
  • The budget eliminates the Economic Development Administration, which provides grants for projects and requests $31.6 million to cover the costs associated with the first year of closing the agency.
  • Continues to support implementation of the Rural e-Connectivity Pilot Program and provides $690 million in telecommunications loans for populations under 5,000. In addition, $250 million is provided to support broadband loans and grant programs that will provide high speed broadband services to communities with population under 20,000 and $30 million for rural communities that currently do not receive any broadband service.
  • Provides the National Telecommunications and Information Administration $25 million to modernize spectrum management systems to support the industry’s transition to 5G.

Defense

  • Requests $705.4 billion for the Department of Defense (DOD), including $636.4 billion for the base budget and $69 billion for Overseas Contingency Operations (OCO). The budget reflects a $0.8 billion increase above the FY 2020 enacted level for base and OCO.
  • Requests $106.6 billion to fund research, development test and evaluation efforts in the department, an increase of $2 billion over the FY 2020 enacted level.
  • Requests $15.4 billion for creation of the U.S. Space Force.
  • Includes a 3% pay raise for all active-duty military service members.

Education

  • Requests $66.6 billion for the Department of Education, a $5.6 billion reduction below the FY 2020 appropriation.  
  • The administration proposes to consolidate 29 formula and competitive grant programs authorized by the Elementary and Secondary Education Act into a $19.4 billion Elementary and Secondary Education for the Disadvantaged Block Grant. The consolidation would result in $4.7 billion less than the combined current funding levels for the 29 programs that would be merged. Consolidated programs include (with FY 2020 levels): Title I Grants to Local Educational Agencies ($16.3 billion), Title II Grants for Supporting Effective Instruction ($2.1 billion), Title III Grants for English Language Acquisition ($787 million), and Title IV Grants for Student Support and Academic Enrichment ($1.2 billion).
  • Requests $13 billion for the Individuals with Disabilities Education Act, Part B: Grants to States program, an increase of $100 million over the FY 2020 enacted level.
  • Requests $2 billion to support Career and Technical Education state grants, a $700 million increase over the FY 2020 enacted level.
  • Includes $343 million for Minority-Serving Institutions and $749.2 million for programs that focus on Historically Black Colleges and Universities.
  • Requests $950 million for the TRIO Student Supports Block Grant, a reduction of $140 million from the FY 2020 enacted level.
  • Proposes to expand Pell Grant eligibility to students enrolled in high-quality short-term programs that lead to a credential, certification, or license in a high-demand field and to incarcerated students who are within five years of their likely release and enroll in programs that prepare them for high-demand occupations.
  • Proposes to eliminate funding for the Federal Supplemental Educational Opportunity Grant program ($865 million in FY 2020) and the Public Service Loan Forgiveness Program. The Federal Work-Study program would receive $500 million, a $680 million reduction below the FY 2020 enacted level.

Energy

  • Requests $35.4 billion for the Department of Energy, an 8% decrease below the FY 2020 enacted level.
  • Proposes eliminating all funding for the U.S. State Energy Program, Weatherization Assistance Program and Low-Income Home Energy Assistance Program—these proposals were made in the last three budgets and were all rejected on a bipartisan basis by Congress.
  • Includes no funding for licensing the Yucca Mountain nuclear waste repository.
  • Includes $25 million for an interim storage site, though no site has currently been identified. Related, the budget includes a new provision calling for $150 million to buy uranium for a domestic uranium reserve.
  • Proposes doubling funds for artificial intelligence (AI) and quantum information sciences research and development by 2022 and invests over $14 billion in DOD science and technology programs that support AI, quantum information science and biotechnology, as well as 5G, autonomy, microelectronics and cybersecurity.
  • Provides $718 million, a significant decrease from FY 2020 enacted levels, for the National Institute of Standards and Technology (NIST) but increases NIST’s AI-specific funding to advance U.S. innovation and technological development in AI, quantum information science, advanced manufacturing and 5G.
  • Proposes $5 million to create a new AI and Technology Office, which will be responsible for developing guidance and oversight on AI. The office would also support the administration’s industries of the future efforts and the White House Office of Science and Technology Policy’s AI strategic priorities.

Environment

  • Requests $6.7 billion for the Environment Protection Agency, a 27% decrease below the FY 2020 enacted level. This includes a 44% reduction in funding to states that implement federal programs under the Clean Air Act, Clean Water Act and Safe Drinking Water Act. This also includes a 27% reduction to the state revolving funds to $2 billion from $2.76 billion, which offer low-interest loans to communities seeking to upgrade drinking water and wastewater infrastructure.

Homeland Security

  • Provides $52.1 billion to the Department of Homeland Security (DHS), a 3.2% increase from the FY 2020 enacted level.
  • Proposes transferring the U.S. Secret Service and its $2.4 billion budget to the U.S. Department of Treasury, creating a DHS budget of $49.7 billion.
  • Provides $2 billion for barriers along the U.S.-Mexico border, a $3 billion decrease from the FY 2020 enacted level.
  • Provides $1.8 billion for the Cybersecurity and Infrastructure Security Agency, a $258 million decrease from the FY 2020 enacted level. 
  • The Federal Emergency Management Agency is funded at $14.5 billion, a decrease of $12.8 billion compared to the enacted FY 2020.
  • The Transportation Security Agency is funded at $8.2 billion, a decrease of $58.7 million compared to the enacted FY 2020.
  • Immigration and Customs Enforcement is funded at $10.4 billion, an increase of $2 billion from what was enacted in FY 2020.
  • Provides $157.6 million for emergency communications for federal, state, local, tribal, and territorial entities.
  • The spending proposal also includes $5.1 billion in additional disaster relief funds.

Health and Human Services

  • Provides $94.5 billion for the Department of Health and Human Services (HHS), a 10% decrease from the FY 2020 enacted level.
  • Proposes $5.74 billion in funding to the Substance Abuse and Mental Health Services to combat the opioid epidemic, a decrease of $142 million from the enacted FY 2020 budget, including $1.6 billion for State Opioid Response Grants, an $85 million increase from 2020. Provides states the ability to use these funds to address drug overdoses related to psychostimulants (ex. Methamphetamines, synthetic opioids, cannabis, and synthetic cannabinoids).
  • Proposes an additional $5 billion in funding to the Food and Drug Administration (FDA) to combat the opioid epidemic.
  • Requires those who are able-bodied adults aged 18-65 years old, to work a minimum of 20 hours per week in order to receive Medicaid and Temporary Assistance for Needy Families benefits, unless they qualify for an exemption.
  • Creates one-time funding of $1 billion to support states that are underserved in childcare and encourages employer investment in childcare for working families.
  • Requests bipartisan congressional legislation to regulate drug pricing that would establish an out-of-pocket spending maximum and bring generic and biosimilar drugs to the market to reduce overall costs of medication.
  • Provides $2 billion in discretionary funding and $2 billion in a mandatory contingency fund to support the needs of unaccompanied alien children.
  • Moves the Center for Tobacco Products, including the regulation of e-cigarettes, from the FDA and creates a new independent agency within HHS. 
  • Proposes $38 billion for the National Institute of Health, a 3.7% decrease from FY 2020.
  • Reduces the budget of the National Institute of Allergy and Infectious Diseases, the institute leading the response to the Coronavirus outbreak, by $430 million.
  • Proposes $5.62 billion in funding for the Centers for Disease Control and Prevention, a 10% reduction from FY 2020.
  • Provides $74 million in funding for new resources to address maternal mortality and morbidity.
  • Proposes $11.2 billion in funding for the Health Resources and Services Administration, a decrease of $705 million from the FY 2020 enacted level.
  • Modifies the Medication Institutions of Mental Diseases exclusion to provide flexibility for states to provide inpatient mental health services to recipients with serious mental illness.
  • Proposes $15.3 million reduction to reform the Supplemental Nutrition Assistance Program.

Housing and Urban Development

  • Requests $47.9 billion in discretionary department level funding for the Housing and Urban Development (HUD), $8.6 billion or $15.2% decrease below the FY 2020 enacted level.
  • Proposes to eliminate programs such as the Community Development Block Grant, the HOME Investment Partnerships Program, Public Housing Capital Fund and the Choice Neighborhoods Grant Program.
  • Requests $425 million to mitigate health and safety hazards through lead remediation, carbon monoxide detectors and healthy home grants. This is a $90 million increase over the FY 2020 enacted level.
  • Requests $100 million for the Rental Assistance Demonstration program that gives public housing authorities the resources needed to preserve and improve public housing properties and to address a nationwide backlog of deferred maintenance.
  • Requests $5.2 billion for the Moving to Work demonstration program that will provide housing assistance to 450,000 families. Of that, $672 billion represents funding that would otherwise be in the Public Housing Fund account, and $4.5 billion represents funding that would be otherwise be in the Tenant-Based Rental Assistance program.
  • Includes HUD-Veterans Affairs Supportive Housing vouchers capped at $4 million, which is $37 million or 90.2% less than the FY 2020 enacted level.

Interior

  • Requests $12.8 billion for the Department of Interior, a 13% decrease below the FY 2020 enacted level. From a policy perspective, it prioritizes a continued agenda of “energy dominance” by noting that "energy production has created jobs in areas of the United States where job opportunities were scarce.”
  • Reiterates the administration's commitment to lease the coastal plain of the Arctic National Wildlife Refuge for potential oil and gas drilling.
  • Proposes $14.8 million for the Land and Water Conservation Fund.

Justice

  • Proposes a budget of $31.7 billion for the Department of Justice, a 2.3% decrease from the FY 2020 enacted level.
  • Provides $4.3 billion in discretionary and mandatory funding, including a $1.85 billion discretionary budget for state, local, and tribal law enforcement activities, including $499 million for the Crime Victim Fund transfers. This discretionary amount is $1.3 billion less than was enacted in FY 2020 and includes the following:
    • The Cmmunity Oriented Policing Services programs will be merged with the Office of Justice Programs.
    • $412 millin for Byrne Memorial Justice Assistance Grants, a decrease of $135 million over FY 2019 levels.
    • $499 millin for the Office on Violence Against Women, a decrease of $3 million over FY 2020 levels.
    • $150 millin for STOP School Violence grants, an increase of $25 million over FY 2020 levels.
    • $120 millin for Victims of Trafficking grants, an increase of $35 million over FY 2020 levels.
    • Eliminates the State Criminal Alien Assistance Prgram.

Labor

  • Requests $11.1 billion for the Department of Labor (DOL), a $1.3 billion or 10.5% decrease from the FY 2020 enacted level, including the program integrity cap adjustment.
  • Includes $200 million for the DOL-sponsored Apprenticeship Program that was a part of the president’s executive order 13801 “Expanding Apprenticeships in America.”
  • Includes $177 million in apprenticeship grants, a $16 million increase from the FY 2020 enacted level.
  • Includes $50 million to the Office of Labor-Management Standards (OLMS) to restore its investigative workforce and strengthen protections for union members by supporting more audits and investigations to uncover flawed officer elections, fraud and embezzlement. This increase will help OLMS fulfill its statutory responsibility spelled out in the 1959 Landrum Griffin Act.
  • Maintains FY 2020 enacted funding levels at $3.4 million for Veterans’ Employment and Training Services, inclusive of the Homeless Veterans’ Employment and Training Service and Homeless Veterans’ Reintegration Program.

Transportation and Army Corps of Engineers

  • Requests $21 billion for the Department of Transportation, a 13% decrease from the FY 2020 enacted level.
  • Proposes a $1 trillion infrastructure plan that includes a $810 billion, 10-year reauthorization of surface transportation programs, including $602 billion for highways, $155 billion for transit and $17 billion for rail. It also includes $190 billion investment in other infrastructure sectors. Much of the funding would be provided by savings in others area of the budget. This proposal will be part of the ongoing conversation with Congress concerning reauthorization of just the expiring surface transportation programs or a broader investment in additional areas of infrastructure.
  • Requests $6 billion for the U.S. Army Corps of Engineers, $1.7 billion or 6% below the FY 2020 enacted level, and would allow for no new construction projects to be started.

Treasury

  • Requests $15.7 billion in base discretionary resources for the U.S. Treasury’s domestic programs, including $2.4 billion for the U.S. Secret Service, which the budget proposes to transfer from the Department of Homeland Security. Excluding the request for the U.S. Secret Service, the budget request is $13.3 billion or $291 million and 2.2% above the FY 2020 enacted level.
  • Eliminates $248 million from the Community Development Financial Institutions (CDFI) Fund, which was created more than two decades ago to jumpstart CDFI’s when such institutions had limited access to capital.
  • The budget requests $127 million in funding for the Financial Crimes Enforcement Network, which links law enforcement with financial institutions, allowing for investigation and prosecution of money-laundering schemes and other financial crimes.

Veterans Programs

  • Requests $89.9 billion over FY 2021 for appropriations, which is a $2.3 billion increase over the FY 2020 enacted level.
  • Proposes robust investments in VA Medical Care programs, including: $1.2 billion for expansion of the Caregivers program, $313 million for veteran suicide prevention initiatives, and $504 million for opioid prevention and treatment.