FY 2019 President’s Budget Request – GovWin FMA’s First Take

Posted by Christine Fritsch Deniece Peterson Angie Petty Alexander Rossino John Slye on February 14, 2018

Deltek Forecasts Defense Agency IT Spending Will Remain Weak Through 2021

The White House released its FY 2019 Budget Request this week with a total $1.2 trillion in top line discretionary spending.

As the product of the first full budget cycle during the Trump Administration, the FY 2019 President’s Budget Request provides a wide ranging perspective for the administration’s policy and legislative agenda for the next fiscal year.

The GovWin Federal Market Analysis (FIA) team dove right in so that we could provide you with our first impressions of what we found noteworthy in the new budget request. We reviewed the largest federal departments’ discretionary budgets to get a sense of direction and priorities for FY 2019, which begins October 1, 2018. Below is a summary table followed by key funding details and initiatives arranged by department.

Defense

The Department of Defense (DOD) discretionary base budget request is up 14% over FY 2018. The $597B in discretionary funding is $73.3B more than the FY 2018 enacted level.

Funding highlights include:

  • $143.3B for the Army (an increase of $20B from the FY 2018 enacted level)
  • $179.0B for the Navy (an increase of $21.2B from the FY 2018 enacted level)
  • $169.7B for the Air Force (an increase of $21.8B from the FY 2018 enacted level)
  • $104.9B for Defense-Wide operations (an increase of $10.3B from the FY 2018 enacted level)
  • $89B in Oversees Contingency Operations (OCO) funding across all DOD (an increase of $5.6B from the FY 2018 enacted level)
  • $215B for DOD Operations and Maintenance funding (an increase of $15.4B from the FY 2018 enacted level)
  • $131.1B for DOD Procurement funding (an increase of $24B from the FY 2018 enacted level)
  • $90.6B in DOD RDT&E funding (an increase of $18.8B from the FY 2018 enacted level)
  • Invests $13.7B in DOD’s Science and Technology (S&T) Program, including $6.3B in Advanced Technology Development
  • Includes $33.7B for the Defense Health Program
  • Implements $6.0B in reform initiatives, including acquisition, cost accounting, financial management, and contract management and oversight
  • Provides $602.2M for the training and exercise requirements of DOD’s 10 combatant commands

Agriculture

The president’s budget request includes $17.9B in discretionary funding for the Department of Agriculture, 24.5% less than the $23.7B enacted in Fiscal Year 2018.

Funding highlights include:

  • $5.9B for Food and Nutrition Service discretionary programs
  • $4.7B for Forest Service discretionary programs
  • $1.3B for Farm Service Agency discretionary programs
  • $62.5M for the Office of the Chief Information Officer
  • $15M to fund USDA IT modernization projects, including end-user services, data center, and legacy network consolidation
  • $8.3M to enhance departmental cybersecurity

Commerce

The president’s budget request allocates $9.8B in discretionary funding for FY 2019, a 7.0% increase from the FY 2018 enacted level.

Funding highlights include:

  • $2.3B increase for the Bureau of Census for final preparations before the 2020 Census that includes an in-field address canvassing operation and finalization of each system supporting the data collection and processing operations
  • $4.5B budget for the NOAA with a prioritization to improve time and quality of weather forecasts and warnings with $877M for current generation polar weather satellite systems and $75M toward construction of a second oceanographic vessel
  • $35.8M in working capital funds for the Office of the Chief Information Officer
  • $3M increase to ITA to promote international trade enforcement and compliance
  • Support under the NTIA for the development of next generation wireless services, including 5G and the internet of things

Energy

The president’s budget request allocates $24.3 in discretionary funding for FY 2019, a 19% decrease from the FY 2018 enacted level.

Funding highlights include:

  • $15.1B for the NNSA, a 9% increase over FY 2018 requested levels
  • $11B specifically for the nuclear weapon stockpile and replacement of supporting facilities
  • $5.4B to conduct early stage research and development and build cutting-edge tools and facilities for scientific innovation, including $636M to accomplish exascale computing in 2021
  • $470M towards cyber protections for the energy sector, including $395M for enterprise cybersecurity risk management and $75M for electric grid and energy sector security research and development
  • $2B reduction in funding for applied research and development programs focused on nuclear, fossil, renewables, efficiency and electricity
  • Elimination of the Advanced Research Project Agency-Energy (ARPA-E) to shift the primary role of commercializing energy technologies to the private sector

Health and Human Services

The president’s budget request provides $66.9B in base discretionary budget authority to HHS, a 20% decrease over FY 2018 estimated levels. 

Funding highlights include:

  • Strengthens Medicare, repeals and replaces Obamacare, comprehensively reforms Medicaid, and includes a strong focus on program integrity for all health programs.
  • Reorganizes HHS by streamlining NIH administrative functions, and integrates research of Agency for Healthcare Research and Quality (AHRQ), National Institute for Occupational Safety and Health (NIOSH), and National Institute on Disability, Independent Living, and Rehabilitation (NIDILR) and places them under NIH.
  • Combats the opioid epidemic by including $5B in new resources over the next five years.
  • Reforms drug pricing and payment by testing new Medicaid drug coverage and financing; speeding development of generics; and modernizing Medicare drug benefit and payment.
  • Eliminating the Low Income Home Energy Assistance Program and the Community Services Block Grant which accounts for a large portion of the decrease in discretionary budget.
  • The Bipartisan Budget Act of 2018 (BBA), which passed in Dec. 2017 after the budget was prepared, adds $10B in funding beyond the FY 2019 budget request for the opioid epidemic and serious mental illness, and returns $9.2B to NIH.

Homeland Security

The president’s budget provides $52.7B in total discretionary budget for DHS, including $46B in net discretionary funding and an additional $6.7B for the Disaster Relief funding. The $52.7B top line would be a $16.9B (-24.3%) reduction over the FY 2018 enacted level but for the fact that the total FY 2018 estimate includes roughly $18B in supplemental funding for disaster relief.

Funding highlights include:

  • $1.6B for construction of approximately 65 miles of border wall in south Texas
  • $782M to hire and support 750 additional agents U.S. Customs and Border Protection (CBP) and 2,000 additional officers at U.S. Immigration and Customs Enforcement (ICE), doubling the number of new ICE officers who would be hired in 2018
  • $2.5B to support daily detention operations covering up to 47,000 illegal aliens
  • $1.0B to support DHS’s cybersecurity efforts to safeguard civilian agency IT systems, including $237.6M for the Continuous Diagnostics and Mitigation (CDM) program, $406.8M for the EINSTEIN program, and $158.2M to secure interoperable emergency communications capabilities for first responders.
  • $7.7B to support Transportation Security Administration (TSA) employees and technology, including $73.9M in new computed tomography (CT) airport screening technology
  • $2.2B for the U.S. Secret Service, supporting the hiring an additional 450 special agents, officers, and professional staff to keep on pace to reach its  staffing goal of 7,600 employees by the end of 2019
  • $223M for procuring high-priority infrastructure, border security technology improvements, aircraft and surveillance technologies.
  • $131.9M for E-Verify operations and upgrades, including $22.8M to continue preparations for eventual mandatory nationwide use.

Justice

The president’s budget request allocates $28B in discretionary funding for FY 2019, nearly a 1% decrease from the FY 2018 level. This number includes scorekeeping credits related to funding in the Crime Victims Fund, the Asset Forfeiture Fund and the Working Capital Fund.

Funding highlights include:

  • $14.2B for the FBI, DEA, Mashals Service, ATF and the Organized Crime and Drug Enforcement Task Forces combined to strengthen federal law enforcement abilities to respond to national security crises
  • $31.7M for the Justice Information Sharing Technology to include O&M costs of the CDM program at DHS,  further data center consolidation, continued email consolidation and cloud migration
  • $295M increase for program enhancements to fight the opioid crises
  • $65.9M increase in immigration-related improvements and enhanced border security and immigration enforcement
  • Proposal to transfer of alcohol and tobacco regulatory and enforcement responsibilities from the ATF to the Alcohol and Tobacco Tax and Trade Bureau under the Department of Treasury

State and US AID

The president’s budget provides $40.1B in total discretionary funding for the Department of State, the U.S. Agency for International Development (USAID) and related international assistance programs, including $25.8B in base discretionary funds and $12.0B in Overseas Contingency Operations (OCO). (An additional $1.4B in Treasury international programs is included in the DOS request, as is customary.) Total discretionary funding across these agencies and programs for FY 2019 is $16.2B (-28.7%) below the FY 2018 enacted level and the reduction is nearly evenly split between the State Department and USAID/International Assistance Programs. The FY 2019 budget also continues to stress reform efforts that build on existing strengths and address inefficiencies, including information technology and human capital management.

Funding highlights include:

  • $8.2B for Diplomatic Programs and the IT Central Fund to support the critical day-to-day operations of overseas staff
  • $4.6B to protect overseas personnel and facilities, which includes $2.2B for new, secure embassy construction
  • $150M for key IT investments to modernize legacy systems and software and accelerate cloud-based solutions
  • $1.3B for USAID Operations to support USAID personnel in 87 missions
  • $630M for civilian assistance to Afghanistan and countries in South Asia to strengthen and sustain improvements in education, health, governance, and other sectors.

Transportation

The president’s budget request includes $15.6B in discretionary appropriations for the Department of Transportation, 15.2% less than the $18.4B enacted in Fiscal Year 2018.

Funding highlights include:

  • $200B for national transportation infrastructure
  • $45.8B for the Federal Highway Safety Administration (FHWA)
  • $16.1B for the Federal Aviation Administration (FAA)
  • $11.1B for the Federal Transit Administration (FTA)
  • $2.6B for the FHWA Highway Safety Improvement Program to assist the implementation of state safety plans
  • $73M for the FAA to develop standards for the safe operation of Unmanned Aircraft Systems
  • $10M for the NHTSA to accelerate the safe testing and deployment of automated self-driving vehicles
  • $10M for the USDOT’s enterprise cybersecurity initiative
  • $5M for the FTA to test the use of advanced sensor technologies to monitor transit infrastructure health

Treasury

The president’s budget request provides $12.3B in base discretionary budget authority to Treasury, an 8.5% increase over FY 2018 estimated levels.   

Funding highlights include:

  • Prioritizes resources to combat terrorist financing, proliferation financing, and other forms of illicit finance with $159M for Terrorism and Financial Intelligence (TFI) and $118M for Financial Crimes Enforcement Network (FinCEN).
  • Requests $25M for cybersecurity to proactively and strategically Treasury IT systems. 
  • Strengthens IRS’ ability to implement tax reform by proposing $11.1B in base funding for IRS including $2.3B for running key tax filing and compliance IT applications and $110M for IT modernization efforts.
  • Supports Treasury’s ongoing digitization of payments, and effort to increase citizen electronic accessibility, as well as Treasury’s government-wide role in detection and reduction of improper payments.

Veterans Affairs

The president’s budget request provides $83.1B in base discretionary budget authority to VA, a 7.5% increase over FY 2018 estimated levels.

Funding highlights include:

  • Aims at identifying at-risk veterans and providing them targeted interventions to prevent suicide; enhancing health care in the community; simplifying access to nonmedical benefits; and implementing a new appeals framework.
  • Provides $4.2B to leverage emerging technology, modernize and maintain IT infrastructure.
  • Allocates $172M for the OIG to strengthen accountability, promote transparency, and reduce waste, fraud, and abuse.
  • Improves veterans’ access to medical care by providing $70.7B to provide high-quality health care services.
  • Provides $1.1B for major construction projects, $707M for minor construction projects and $1.4B for medical facility maintenance.

Stay Tuned for More Analysis

The highlights above are just a first-cut of our observations and analysis of the FY 2019 federal budget. In the coming weeks the GovWin Federal Market Analysis team will be publishing our complete analysis of the FY 2019 budget request, where we will go into greater detail on the key initiatives, IT investments and contractor implications that will shape the federal IT marketplace as we head into FY 2019.

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