CHN: The FY17 Federal Budget – President Obama’s Budget Makes Critical Investments in Human Needs Programs

The Obama Administration released its Fiscal Year 2017 budget request on Tuesday, February 9. The budget stays within the levels agreed to in the Bipartisan Budget Act enacted last fall, while providing additional sequestration relief in later years. Highlights from select agency budgets are found in the articles that follow.
A federal budget should reflect the nation’s priorities and its vision for the future. CHN’s statement released on February 9 noted that any budget proposal must be judged on how responsibly it invests in our future by nurturing our children, opening up opportunities for workers, and protecting our retirees. President Obama’s budget provides a set of proposals that improve economic security and reduce poverty across all stages of life.  There are specific multi-year plans to end family homelessness, reduce child hunger, and increase opportunities for stable employment, with extra help for young people just entering the labor force.  There are work supports such as increased child care and plans for increased retirement income.

Members of the Republican majority in Congress have been quick to dismiss the President’s last budget.  But advocates point to its long-term vision and complementary approaches, building on proven means of reducing poverty.

The President’s budget provides multi-billion dollar increases in anti-poverty initiatives without increasing the deficit as a share of the economy.  (The deficit declines from 3.3 percent of Gross Domestic Product in 2016 to 2.8 percent in 2026.)  The budget can afford its investments in part because it raises revenue.  The Administration’s new tax proposals would reduce the deficit by $955 billion over the next decade.  Federal receipts (revenues) would grow as a share of the economy from 18.1 percent this year to 20 percent in 2026.  In addition, the President’s FY 2017 budget makes $378 billion in health care savings, and assumes that immigration reform would result in deficit reduction of $170 billion, both over ten years.  (These overview figures can be found in the President’s FY 2017 budget’s Summary Tables.)

As the House and Senate Budget Resolutions are released in the upcoming weeks, they should also be judged by their likelihood of reducing poverty and improving economic security and opportunity.   The FY16 Congressional Budget Resolution assumed giant cuts in programs, disproportionately affecting low-income people. It would have pushed millions of people into, or deeper into, poverty. If Congress agrees on a budget outline that again refuses to raise revenues, and perhaps even proposes to cut them further, reducing poverty and inequality would become more distant goals.

While the President’s budget spells out program-by-program funding levels in detail, Congressional Budget Resolutions are only outlines, with assumptions about revenues and expenditures, including a total figure for appropriations.  This year, Congress does not need to pass a new budget resolution to set the funding total, because it already set the levels for FYs 2016 and 2017 when it passed the Bipartisan Budget Act of 2015. But Congress will have to divide up the total among the 12 spending bills. Known as 302(b)s, these allocations set funding levels for each of the 12 appropriations subcommittees. As the Center on Budget and Policy Priorities found, the two subcommittee bills that cover the majority of appropriations for low-income programs – those that cover the Departments of Labor, Health & Human Services, and Education (L-HHS-Ed), and the Departments of Transportation and Housing and Urban Development (THUD) – received FY 2016 increases equal to roughly half those that the other nine non-defense subcommittees received. The total for FY 2017 appropriations is about the same as this year’s, and increases required for certain programs will mean funding will be very tight.  Congress needs to provide a fairer share to the program areas serving low-income people in FY 2017.

A note on budget terminology: throughout, you will see references to the two main categories of federal spending: “discretionary” and “mandatory.” Discretionary spending refers to those programs that require annual appropriations by Congress. Most defense, education, and housing fall into this category, plus many social service, environmental and community development programs. Mandatory spending includes programs like Social Security, Medicare, Medicaid, SNAP/food stamps, and other basic safety net programs that do not need annual appropriations. Instead, Congress authorizes the ways they spend money by legislation. Congress can cut or expand these programs by amending the legislation that authorizes them.

In addition to the specific resources called out in the articles below, please visit CHN’s FY17 budget page throughout the budget and appropriations process for more information and newly added resources.

Budget and Appropriations
Policy Analyses and Research