Budget Blueprint: HHS, VA, Treasury, Education and Labor

Posted by Angie Petty on March 29, 2017

Acquisition Guidance in OMBs Revised Circular A 130

On March 16th, the Trump administration released what is commonly referred to as a “skinny” budget. The 62-page document gives a glimpse into the administration’s priorities for FY 2018, as well as the entire term of the administration.

Below I have summarized and presented highlights of the budget release for the agencies that I track:

Health and Human Services:

  • Provides a total discretionary budget for FY 2018 of $65.1B, a 16% decrease over FY 2017 levels.
  • Funds the 21st Century Cures Act through a $1.1B appropriation.
  • Funds HHS’ highest priorities such as health services through community health centers, early care and education, medical products review and innovation.
  • Eliminates programs that are duplicative or have limited impact on public health.
  • Strengthens program integrity through $751M for the Health Care Fraud and Abuse Control (HCFAC) program, a $70M increase over FY 2017.
  • Supports substance abuse treatment, including a $500M increase above FY 2016 levels to expand opioid misuse prevention and treatment.
  • Increases FDA medical product user fees to $2B, a $1B increase over FY 2017.
  • Reorganizes NIH and reduces funding to $25.9B, a $5.8B decrease.
  • Eliminates $403M in health professionals and nurses training programs.
  • Eliminates $4.2B for the Low Income Home Energy Assistance Program and the Community Services Block Grant.

Contracting Implications:

  • Majority of impact on cuts to NIH research efforts and bureau consolidations.
  • Targeted increases for health care fraud and abuse and public health efforts.
  • Other initiatives focused on state grants and user fees that do not impact contractor addressability.

Veterans Affairs

  • Provides a total discretionary budget for FY 2018 of $78.9B, a 6% increase over FY 2017 levels.
  • Significantly increases funding for VA medical care, to build an integrated system of care that strengthens services within VA and makes effective use of community services:  Provides a $4.6B increase in discretionary funding for VA health care; Requests legislative authority and $3.5B in mandatory budget authority to continue the Veterans Choice Program.
  • Supports programs to aid homeless veterans, provide education benefits, enhance veteran services, and assist with transitioning to civilian life.
  • Continues critical investments to optimize productivity and transform VA’s claims processes.
  • Invests in IT to improve the efficiency and efficacy of VA services. Provides sufficient funding for sustainment, development, and modernization initiatives that would improve the quality of services provided.

Contracting Implications:

  • Proposes additional investments in IT modernization to improve delivery of veteran services.
  • Also extends the Veterans Choice Program, which sustains community-based health care and related services.

Treasury

  • Provides a total discretionary budget for FY 2018 of $11.2B, a 4% decrease over FY 2017 levels.
  • Brings renewed discipline to the department by focusing resources on collecting revenue, managing the nation’s debt, protecting the financial system from threats, and combating crime and terrorism financing.
  • Preserves key operations of the IRS in order to combat identity theft, prevent fraud, and reduce the deficit by enforcing tax laws. Reduces funding by $239M, diverting resources from antiquated operations.
  • Strengthens cybersecurity by investing in a department-wide plan to enhance existing systems and reduce fragmentation of IT management across bureaus.
  • Redirects resources from duplicative policy offices, thus shrinking the federal workforce and increasing efficiency.
  • Prioritizes funding for Treasury’s array of economic enforcement tools.
  • Eliminates funding for Community Development Financial Institutions (CDFI) Fund grants., a savings of $210M from the 2017 annualized CR level.

Contracting Implications:

  • Proposes additional migration to electronic-based processes, as well as investments in cybersecurity.
  • Other cuts focused on elimination of grants.

Education

  • Provides a total discretionary budget for FY 2018 of $59.0B, a 14% decrease over FY 2017 levels.
  • Increases investments in public and private school choice by $1.4B, bringing the annual total to $20B and $100B with matching state and local funding.
  • Maintains $13B in funding for IDEA programs to support students with special education needs.
  • Eliminates $2.4B for Supporting Effective Instruction State Grants program.
  • Saves $1.2B by eliminating the 21st Century Community Learning Centers program, which supports before- and after-school programs.
  • Cuts $732M by doing away with the Federal Supplemental Education Opportunity Grant program.
  • Maintains the Pell Grant program, while proposing a cancellation of $3.9B from unobligated carryover funding.
  • Eliminates or reduces over 20 categorical programs including Striving Readers, Teacher Quality Partnership, Impact Aid Support Payments for Federal Property, and International Education programs.

Contracting Implications:

  • Majority of cuts focused on grant programs.
  • Very little reliance on contract support.

Labor

  • Provides a total discretionary budget for FY 2018 of $9.6B, a 21% decrease over FY 2017 levels.
  • Focuses the department on its highest priority functions and disinvests in activities that are duplicative, unnecessary, unproven, or ineffective.
  • Expands reemployment eligibility assessments to reduce improper payments in unemployment insurance benefits and reduce time unemployed.
  • Eliminates the Senior Community Service Employment Program (SCSEP), resulting in savings of $434M.
  • Saves $60M by eliminating the Bureau of International Labor Affairs grant funding.
  • Closes Job Corps centers that do a poor job educating and training disadvantaged youth for jobs.
  • Decreases federal support for job training and employment services formula grants, shifting more funding responsibility to the states.
  • Eliminates less critical technical assistance grants from the Office of Disability Employment Policy.

Contracting Implications:

  • Nearly all cuts are to grant programs for international labor affairs and job training.

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