Federal Science Partners Periodic Update

Overview of the Administration’s 

FY 2020 Budget Request 

FY 2020 Budget:  On March 11, President Trump released his FY 2020 budget, titled "A Budget for a Better America: Promises Kept. Taxpayers First." Official documents are available here.  Similar to the FY 2017 budget, the FY 2020 budget is an overview; detailed agency, account, and program information is expected next week. 

 Under current law, defense spending is scheduled to fall by 11 percent next year as recent spending increases are replaced with sequester-level caps. The President’s budget calls for avoiding these cuts and instead increasing defense spending by 5 percent this year and additional amounts over the next decade. To avoid raising the 2020 discretionary cap on defense spending, the budget funds this year’s defense increase through the Overseas Contingency Operations (OCO) account, which is designated for war spending and not subject to the caps. This approach is repeated for 2021, after which the Administration proposes to fund nearly all defense spending through the ordinary budget category. 

The President’s budget would allow non-defense discretionary (NDD) spending to return to the sequester level in 2020, a 9% reduction from 2019 levels. Beyond that, the Administration calls for a further 2 percent per year reduction (the “two-penny plan”), even as inflation rises by a similar amount. These cuts would result in total unspecified NDD appropriation reductions of $1.1 trillion over ten years and a $235 billion cut in 2029 – about 30% below baseline and about 40% below 2019 inflation-adjusted levels.

The President’s budget proposes roughly $430 billion in spending and tax breaks on new initiatives. Most significantly, the budget includes a $200 billion infrastructure proposal spread out over the next ten years.  Funding for the new infrastructure initiative in FY2020 would begin at $5 billion and increase significantly in the outyears.  The budget also proposes to spend $20 billion in spending and tax breaks to provide for paid parental leave, $45 billion for a new school choice scholarship program, $40 billion to allow more health insurance plans to offer Health Savings Accounts, and $100 billion to fully fund the VA MISSION Act of 2018 outside of the discretionary budget.

There are over $2.8 trillion in total spending cuts over 10 years with $1.1 trillion made up by the unspecified reductions in NDD.  The balance of the spending reductions include: repeal and replace the Affordable Care Act and Cap Medicaid (-$660 billion); enact health reforms (-$645 billion) such as reducing Medicare provider payments, eliminate payments for medical graduate education; reduce spending on prescription drugs; save $75 billion with assorted Medicaid savings; and $30 billion of savings from enacting medical malpractice reform.  The budget also contains $260 billion in savings via reform of welfare programs and $625 billion in savings from changes in other mandatory spending programs related to higher education loan repayments, modifying federal employee health and retirement benefits; and reforms to Social Security Disability Insurance and Supplemental Security Income disability programs.

The proposed budget includes a request for $8.6 billion in funding to complete a 722-mile wall along the U.S.-Mexico border — which would add to the $8.1 billion from other funding sources that the Trump administration is already using to finance construction of the wall.  The President’s Budget was released with a series of fact sheets on Presidential budget priorities including:

·      Border Security;

·      Modernizing Government;

·      Government Reorganization;

·      Infrastructure Initiative;

·      National Security;

·      School Safety;

·      Support for Working Families;

·      Combatting the Opioid Epidemic; and

·      Lowering Drug Pricing and Payment.

Appropriations Response: House Appropriations Chairwoman Nita Lowey (D-NY) released a statement and said, “the Trump budget has no chance of garnering the necessary bipartisan support to become law,” while Senate Appropriations Chairman Richard Shelby (R-AL) provided a shorter, more measured statement.

Federal R&D Agencies — Initial Details:  As summarized by Science and other sources, the budget request calls for spending cuts at many federal science agencies:

  • NIH, the request is $33 billion, a reduction of $6 billion—or 15%—below the agency’s current budget of $39.1 billion. The request includes a $500 million, 10-year childhood cancer initiative that Trump proposed in his State of the Union address.

  • NSF would face a cut of roughly $1 billion, to $7.1 billion, a 12% reduction from the FY 2019 level of $8.25 billion.  The last time the NSF budget was $7 billion was FY 2012.  The magnitude of this proposed reduction will make the balance between support for research vs. infrastructure and core research programs and “Big Ideas” particularly challenging.

  • At the Department of Energy, the Office of Science’s budget would shrink by roughly 17%, to $5.5 billion and the ARPA-E program would be eliminated.

  • NASA: The budget requests $21 billion for NASA, the budget documents call this a $283 million or 1.4-percent increase from the FY 2019 estimate but that administration’s baseline estimate is based on the FY 2019 continuing resolution and final funding for NASA FY 2019 is $21.5 billion. About half of the requested budget, $10.7 billion, would go toward NASA’s space exploration campaign to return to the Moon, establish a sustainable human presence there, and then land humans on Mars. The Science Mission Directorate (SMD) gets $6.3 billion in this budget request (down 8.7%), including the boost to JWST funding. The Earth Science, Planetary Science, Astrophysics, and Heliophysics Divisions are slated to lose a combined $650 million (a 9.8% cut).  As the Administration has proposed in the past, NASA’s STEM education programs would be terminated.

  • NOAA and the 2020 Census: The budget request includes $7.2 billion for the 2020 Census within the Department of Commerce.  That amount, a $4 billion increase, is in line with earlier outyear projections of what the bureau would need in the last year of its 10-year cycle.  Nonetheless the $4 billion needed for the Census puts a squeeze on the non-defense budget generally and fall particularly hard on agencies and programs within the Commerce Department.  For example, Sea Grant and other ocean and coastal programs, including NOAA education programming, are once again proposed for elimination or severe reductions due to other priorities. 

Similar to the FY 2019 request a large number of Non-defense discretionary programs are proposed for elimination.  In addition to Sea Grant, Coastal Zone Management grants, and the Pacific Coastal Salmon Recovery Fund; the Advanced Research Projects Agency – Energy are eliminated.  At NASA, “Consistent with prior budgets, the Budget provides no funding for the WFIRST space telescope, two Earth science missions, and the Office of Science, Technology, Engineering, and Mathematics (STEM) Engagement. Lower-cost STEM-related activities such as internships and robotics competitions funded outside of the Office of STEM Engagement continue to be supported. “

*FY 2020 Spending Limitations - As FSP has been briefing, the current statutory spending caps in the Budget Control Act (BCA) reduce defense and non-defense discretionary spending for FY 2020 by as much as 9% from the FY 2019 levels. Under the BCA, FY 2020 funding for defense would be cut $71 billion below the FY 2019 level, or 13 percent in FY 2020.  Spending caps in FY 2020 for non-defense discretionary (NDD) programs would be $55 billion below the FY 2019 level or 9 percent in FY 2020 after adjusting for inflation. The House Budget Committee has released a report outlining the impact of such reductions in discretionary spending should the spending caps not be adjusted.  Read the Committee’s report here.  On February 27, the Senate Budget Committee held its own hearing on the issues associated with adjusting the discretionary spending caps.  The Congressional Budget Office (CBO) testified at that hearing.  CBO’s testimony can be found here.

 Since 2013, Congress and the President have enacted a series of bipartisan budget agreements, covering two years at a time, that adjusted the BCA’s sequestration cuts.   Most recently, last year on February 7, 2018 Congressional negotiators reached an agreement to increase the statutory spending caps for both defense and non-defense programs for FY 2018 and FY 2019.  Under the spending cap agreement, the FY 2018 statutory defense cap was raised by $80 billion or 15% and the nondefense cap by $63 billion or 12%. The agreement also included new spending caps for FY 2019 with an increase of $85 billion for defense programs and $68 billion for non-defense spending programs over the current respective spending caps in the Budget Control Act.  

It is expected that the 116th Congress will move to adjust the FY 2020 caps, but timing is very uncertain and a deal may not be reached until Treasury exhausts its debt limit extraordinary measures, forecasted for December, 2019.