President Joe Biden released the complete details of his fiscal year 2022 budget proposal, requesting $6 trillion in spending and a $1.8 trillion annual deficit. The administration requested increases across most departments and agencies, including a 6.5% boost to nondefense discretionary spending, while proposing a 1.6% increase for defense activities.
Following is an analysis of salient provisions with potential impacts for states.
- Requests $27.9 billion for the U.S. Department of Agriculture (USDA), a 17% increase over FY 2021.
- $192 million for work related to climate change via the Agricultural Research Service.
- $40 million for the USDA’s regional hubs to help farmers and ranchers adapt to and mitigate the impacts of a changing climate.
- $84 million for the National Resources Conservation Service, an increase of $5 million above enacted levels for soil-mapping activities.
- Requests $1.4 billion for the Department of Commerce, an increase of $582 million over FY 2021, for collecting, compiling, analyzing, preparing and publishing statistics for censuses and survey programs provided for by law.
Defense | Army Corps of Engineers
- Requests $715 billion for the Department of Defense, a 1.6% increase from FY 2021. Recommends a 2.7% military pay raise.
Army Corps of Engineers
- Requests $6.8 billion for the U.S. Army Corps of Engineers, $1.2 billion below FY 2021.
- Requests $102.8 billion for the Department of Education, an increase of $29.8 billion compared with FY 2021, including:
- $36.5 billion for Title I programs, including level-funding the traditional Title I program at $16.5 billion and providing $20 billion in Title I “Equity Grants,” which aim to “direct a larger share of resources to highest poverty districts.”
- $15.5 billion for Individuals with Disabilities Education Act grants to states, a $2.56 billion increase over FY 2021.
- Increases the maximum Pell award to $6,985, a $400 increase over FY 2021.
- Requests $46.2 billion in FY 2022 funding for the Department of Energy, 10.4% over FY 2021.
- Of most importance to states:
- $62.5 million for the formula-based U.S. State Energy Program, matching current levels.
- $300 million to create proposed Build Back Better Challenge grants program to which states and local governments could apply.
- $400 million for the Weatherization Assistance Program, $85 million above current level.
- $25 million to establish the Local Government Clean Energy Workforce Program.
- The president proposed significant increases to the research side of the agency, including:
- $4.7 billion for Energy Efficiency and Renewable Energy, an increase of more than one-third.
- $2.1 billion for Nuclear Energy, an increase of $300 million.
- $201 million for Cybersecurity, Energy Security, and Emergency Response, a 33% increase.
- $327 million for the Office of Electricity, an increase of more than 50%.
- $890 million for Fossil Energy, an 18% increase.
- Requests for $11.2 billion for the U.S. Environmental Protection Agency, a 21% increase over FY 2021.
- $5.1 billion of the request for the State and Tribal Assistance Grants Program.
- $1.2 billion in categorical grants will aid EPA partners in operating their environmental programs.
- $321.5 million for state and local air-quality management grants, a 40% increase.
- $3.2 billion for the Clean and Drinking Water State Revolving Funds, a $460 million increase from current levels.
- $882 million for the Superfund Remedial program to aid cleanup of contaminated land, to reduce toxic substance and greenhouse gas emissions from existing and abandoned infrastructure, and to respond to environmental emergencies and natural disasters.
- $1.8 billion for the climate crisis, with half of it going to the agency’s Accelerating Environmental and Economic Justice Initiative.
- $4 billion, a decrease of $100 million from FY 2021, for U.S. Immigration and Customs Enforcement, detention and removal operations, including transport of unaccompanied minors.
- $1.69 billion, an increase of $30 million over FY 2021, for the Cybersecurity and Infrastructure Security Agency.
- $3.3 billion, an increase of $10 million over FY 2021, for Federal Emergency Management Agency (FEMA) grants, contracts and other cooperative agreements.
- $595 million, a decrease of $15 million from FY 2021, for the State Homeland Security Grant Program.
- $690 million, a decrease of $15 million from FY 2021, for the Urban Area Security Initiative.
- $355 million for emergency management performance grants (no FY 2021 level given in budget request).
- $19.2 billion, an increase of $2.1 billion over FY 2021, for the FEMA Disaster Relief Fund.
- $460 million, an increase of $343 million over FY 2021, for the U.S. Citizenship and Immigration Services Agency.
Health and Human Services
- Requests $131.8 billion in discretionary budget authority and $1.5 trillion in mandatory funding for the Department of Health and Human Services, an increase of $25 billion over FY 2021. Funding for health initiatives, including expanding access to mental health care; promoting health equity for American Indians and Alaska Natives; addressing racial disparities in health care overall; and investing in fight to end the opioid epidemic and HIV/AIDS.
- $4.3 billion for the Centers for Medicare and Medicaid Services.
- $9 billion to the National Institutes of Health, with $6.5 billion to build the Advanced Research Projects Agency, a new program housed within the NIH to accelerate the availability of medical advances.
- $8.7 billion for the Centers for Disease Control and Prevention, including $400 million to support public health infrastructure improvements at the local, state, territorial and federal levels.
- $823 million to the Biomedical Advanced Research and Development Authority, which helps develop countermeasures to fight emerging diseases and finances technologies, drugs and devices to be used during a public health emergency.
- $400 billion for an expansion of the Medicaid program, including pay and benefits for community-based and home health care workers.
- Almost $1 billion for the Public Health Emergency Fund.
- $2.2 billion for the Indian Health Service.
- $6.5 billion for the Food and Drug Administration, including an increase on maximum fees for certificates companies use to export their products to other countries.
- $200 million to implement implicit bias training for health care providers to help address disparities in care for rural and minority women.
- $3 billion for programs to help reduce maternal mortality.
- $11.9 billion for Head Start, a $1.2 billion increase.
- $450 million in Preschool Development Grants.
- $275 million for Child Welfare Services.
- $754 million for the Community Services Block Grant.
- $7.4 billion for the Child Care and Development Block Grant.
- $3.9 billion for the Low-Income Home Energy Assistance program.
Housing and Urban Development
- Requests $68.7 billion for the Department of Housing and Urban Development, an increase of 15% compared with FY 2021. The Community Development Block Grant Program would receive $3.8 billion, an 8% increase over current funding. Section 8 vouchers for low-income renters would receive $430.4 billion, a 22% increase over current funding.
- Requests $17.6 billion for the Department of the Interior, a 16.7% increase over FY 2021.
- $1.9 billion in new climate-related investments to conserve and manage natural resources; and $86 million for the Civilian Climate Corps, an initiative to put Americans to work conserving and restoring public lands and waters.
- $1.48 billion for the Bureau of Land Management, a 20% increase, with a prohibition on oil and gas drilling in the Chaco Culture National Historical Park.
- $170 million for the Bureau of Ocean Energy Management, an increase of $42 million.
- $166 million for the Bureau of Safety and Environmental Enforcement, an increase of $56 million, with $30 million intended to decommission offshore oil rigs.
- $2.98 billion for the National Park Service, a $300 million increase over current funding.
- Requests $2.05 billion for state and local law enforcement programs, an increase of $13.5 million compared with FY 2021.
- $513.5 million, an increase of $29 million over FY 2021, for the Edward Byrne Memorial Justice Assistance Grant program.
- Zeroes out the State Criminal Alien Assistance Program.
- $125 million, an increase of $100 million over FY 2021, for offender reentry programs under the Second Chance Act.
- $418 million, an increase of $24 million over FY 2021, for comprehensive opioid abuse reduction activities.
- Establishes a $100 million program for Community Based Alternatives to Youth Incarceration.
- $796 million, an increase of $346 million over FY 2021, for Juvenile Justice Programs.
- Requests $14.2 billion for the Department of Labor, a 14% increase over FY 2021.
- Includes $3.7 billion for Workforce Innovation and Opportunity Act State Grants to make employment services and training available to more dislocated workers, low-income adults and disadvantaged youth hurt by the economic fallout from the COVID-19 pandemic, a $203 million increase over current funding.
Based on certain economic growth assumptions, Biden would raise $2.4 trillion over the next decade through the following provisions:
- Increasing the corporate tax rate to 28%, from 21%.
- Raising the global minimum tax to 21%, disallowing certain foreign income deductions and limiting inversions.
- Replacing base erosion tax with rule disallowing deductions related to low-taxed entities.
- Raising the capital gains tax rate to 39.6% for households earning more than $1 million.
- Raising the top marginal income tax rate to 39.6% from 37% for individuals earning more than $452,700, or $509,300 for joint filers.
- Making permanent expansions to the earned income credit for childless workers and the child and dependent care credit under 2021 COVID aid package.
- Extending through 2025 expansions to the child tax credit under Public Law 117-2.
- Requests $88 billion for the Department of Transportation, an increase of about $350 million over FY 2021.
- However, the president simultaneously proposed an additional $76 billion as part of his infrastructure proposal, the American Jobs Plan, though Congress is still negotiating this legislation.
- Of importance to states:
- Flat funding for the Highway Trust Fund, much of which is passed on to states through a formula.
- $13.5 billion for transit, a $500 million increase over current funding.
- $4 billion, including $2.7 billion for Amtrak, of which $1.4 billion is for the national network and $1.3 billion for the Northeast Corridor. Another $625 million would go toward a new competitive Passenger Rail Improvement, Modernization and Expansion grant program.
- Requests $15 billion for the Treasury Department, an increase of $1.5 billion compared with FY 2021, including:
- $13.2 billion to the Internal Revenue Service.
- $330 million for the Community Development Financial Institutions Fund, a $60 million increase over FY 2021.
- $417 million in additional funds for enforcement.
- $190.5 million increase for Financial Crimes Enforcement Network.
- Requests $117.2 billion, a 9% increase over FY 2021. Includes $598 million for veteran suicide prevention programs, a 92% increase over current funding.