Presidents’ proposed budgets reflect the priorities they attempt to persuade Congress to adopt. In the final years of an administration a chief executive has usually turned attention away from budget battles and toward leaving a legacy, usually in foreign affairs.
President Obama, in the face of a hostile Congress and constrained by limitations on federal spending, has resorted to budgetary gimmicks and games in his proposed Fiscal Year (FY) 2017 proposals. This is not unusual and Congress has also resorted to these gimmicks from time to time, but it certainly reflects the reality that there is very little room for agreement on where and what our nation’s spending priorities should be.It’s similar to what appears as a futile attempt to replace the late Justice Antonin Scalia on the U.S. Supreme Court — it may take a new administration in 2017 to move the budget process forward. In the transition from President Bush to President Obama, it took until March 2009 to enact the final budget for FY 2009 that began on October 1, 2008. Although the appropriations committees have been holding hearings and trying to keep the process moving, the politics of an election year will make it very difficult to get the spending bills enacted in time for the start of the new fiscal year.
The president proposed a FY 2017 budget that crashes the $4 trillion spending barrier for the first time. Of the total of $4.089 trillion in proposed outlays, only $1.215 trillion are funds subject to the regular congressional appropriations process.
What are called “mandatory programs” account for $2.574 trillion (the rest of the budget is mostly interest on the nation’s debt). These programs, the largest of which are Social Security and Medicare, are based on formulas or direct payments to individuals. Other mandatory programs include: student financial aid (Pell Grants), Medicaid payments to the states, the Supplemental Nutrition Assistance Program (formerly known as food stamps), Child Nutrition and Child Care programs, and Supplemental Social Security. Spending on these programs now make up over two-thirds of the federal budget. This is why calls for “entitlement reform” have been heard for many years. For the most part, the only success came in 1994 from the Bipartisan Social Security Commission, which extended the full eligibility age.
In 2011, Congress enacted the Budget Control Act that revived the term “sequestration” — or across-the-board budget cuts. It had earlier reared its ugly head in the Gramm-Rudman-Hollings Act of 1985. Subsequent to 2011, political reality intervened and the sequestration targets were modified upward. Although a government shutdown, engineered by Senator Ted Cruz, a Republican from Texas, and his conservative allies, occurred in October 2013, the difficulty of producing significant budget reductions continued.
In 2015 another pending crisis over extending the federal debt limit again engineered by Cruz with help from Senator Rand Paul, a Republican from Kentucky,, led to the late October enactment of the Bipartisan Budget Act. This legislation again revised the sequestration numbers upward by about $80 billion, for FY 2016 and 2017.
Yet, these limitations still make difficult the administration’s ability to provide the increases it sought in many areas, including research and development. In producing the budget the administration outlined its priorities for R&D, including basic research, the so-called ‘Cancer Moonshot,’ clean energy, and biomedical research. Thus, to try and circumvent the budget agreement in the proposed FY 2017 budget the president has turned to the mandatory spending option for the National Science Foundation (NSF), the National Institutes of Health (NIH), Agriculture Research, and other programs.
The use of the mandatory category allowed the administration to claim it was providing increases for the NSF and NIH budgets. The $400 million in proposed mandatory funding for NSF gives the perception that the agency is getting a 6.7 percent increase for FY 2017. Without the mandatory spending, the increase only amounts to 1.3 percent, almost half of which will help pay for the coming move of the NSF headquarters to Alexandria, Virginia. The budget for Research and Related Activities would increase less than 1 percent without the mandatory dollars.
Without the mandatory funding, the proposed budget for the Social, Behavioral and Economic Sciences (SBE) directorate would essentially remain flat from FY 2016 to FY 2017. This follows about a $4 million decrease from FY 2015 to FY 2016, reflecting NSF’s compliance with the House report language limiting funding for SBE and the Geosciences directorate.
At the NIH, mandatory funding already exists with $150 million in spending for research on Type 1 diabetes at the National Institute of Diabetes and Digestive and Kidney Diseases. In 2016, the House passed the “21st Century Cures Act” that would have given NIH $1.8 billion in mandatory funding for “innovative research.” The Senate did not take up the bill. For FY 2017, the administration proposed $1.3 billion in mandatory funding, which allowed it to claim that NIH has an increase.Without the mandatory dollars, NIH funding would decrease by almost a billion dollars.
Congress established the Agriculture Food and Research Initiative (AFRI) in the 2008 farm bill to provide a peer-reviewed competitive grants program for fundamental and applied agricultural sciences. Most of the social science grants receive funding from the agricultural economics and rural development component, one of six for AFRI. In the president’s FY 2017 budget proposal, the administration provides the long hoped-for funding of $700 million originally recommended in the 2008 farm bill and supported by commissions and committees from the academic community since. The FY 2016 funding level is $350 million. To accomplish this budget doubling, the President proposes $325 million in mandatory spending.
Some research and statistical agencies’ budgets have always included some mandatory spending. The Census Bureau, for example, allocates $28.6 million in its Current Surveys and Programs (formerly Salaries and Expenses) account for: CHIP, which collects annual state-level estimates on the number of low-income children without health insurance; and the Survey of Program Dynamics, which gathers socio-economic data to evaluate the impact of welfare reforms on program recipients (by state).
The problem with all this proposed mandatory funding is that it requires authorization from Congress. In the current climate, this is unlikely to happen. Representative John Culberson, Republican of Texas, who chairs the House Appropriations Subcommittee that has jurisdiction over NSF’s budget, has already told Director France Córdova that the proposed $400 million is “not going to happen.” Whether the appropriations committees will simply fold the proposed mandatory dollars into the regular discretionary funding pot remains to be seen.
Senator Roy Blunt and Representative Tom Cole, Republicans from Missouri and Oklahoma respectively and who lead the respective Senate and House appropriations subcommittees that scrutinize the NIH budget, have pledged to include, as they did last year, another significant increase for this biomedical and behavioral research agency. With NSF, the constraints on the Commerce, Justice, Science Subcommittee – funding for NASA, the FBI, state and local law enforcement, and a big increase for the Census Bureau to keep the preparations for the 2020 count on track – may be too great for anything more than a smaller increase than what the mandatory boost would have provided the NSF. Furthermore, the cries for “entitlement reform” are still a goal of many, and new mandatory spending is the last thing these folks would tolerate.
Of course, we probably will not know the final outcome for these budgetary games until, at the earliest a probable lame-duck session after the 2016 elections, or possibly sometime in 2017.