Today, the Biden Administration released their roughly $1.5 trillion 2022 discretionary spending proposal for fiscal year (FY) 2022, which is set to begin on October 1. The budget proposal, branded a “skinny budget”, is so called because the Biden team is still settling into government and has not had time to issue the typical in-depth agency-by-agency budget justifications. The Biden White House will release their full budget request (typically a doorstopper of more than 1000+ pages) to Capitol Hill later this year, as will individual agencies.
The budget reflects the Biden Administration’s planned investment in the social safety net and domestic programs, unencumbered for the first time in 10 years by sequestration-related budget caps imposed in 2011’s Budget Control Act. The Biden budget asks for a total of $769 billion for the upcoming fiscal year in non-defense programs. That amounts to a 16% increase over current funding levels for domestic programs. Looking closer, Biden’s plan calls for huge (more than 20% each) increases to the Departments of Commerce, Education, Health and Human Services, as well as the Environmental Protection Agency to fund new investments in infrastructure, climate, and manufacturing. Such a large focus on domestic programs is also a stark departure from the Trump Administration’s approach, which proposed cutting domestic spending by 7% in their last budget proposal issued last year.
On the defense side, the Biden budget seeks $753 billion for national defense programs, including war funds. A fight is already brewing: defense spending reliably rises each year no matter who’s in charge, but the Biden budget requests a relatively flat 1.7% increase. The Biden budget also proposes for the first time to eliminate the Overseas Contingency Operations (OCO) warfighting account, a limitless vehicle that some bipartisan members say is too often used to get around budget caps. Some progressives, such as Senate Budget Chairman Bernie Sanders (I-VT), argue that defense spending should decrease and reallocate to domestic programs. Republicans, meanwhile, argue that flat defense spending would signal weakness to U.S. adversaries and allies.
What’s still missing from the “skinny budget?” The proposal released today lacks detailed policy plans, such as more on the Biden Administration’s infrastructure and tax reform plans. The budget is similarly missing the typical White House projections for the economy and the national deficit. Also still MIA: agency-specific “justifications,” where individual agencies post on their websites detailed reports on their budget requests and plans for the coming year that can be invaluable to government relations specialists.
As for what’s next: It’s very unlikely that Congress will enact this draft budget as written: it should be considered a wish list from the White House to Congress. Starting next week, heads of various federal agencies will head to Capitol Hill to defend the White House’s budget request. Congress will then begin writing their FY 2022 budget and appropriations bill that will eventually become law — while Democrats on the Hill may refer to the Biden budget, they have their own priorities to write in. Democratic leaders in the Senate especially will need to stay mindful of Republican priorities if they want to pass FY 2022 appropriations bills before the shutdown deadline of October 1.
Key takeaways from the proposal:
The plan calls for a $27.8 billion, 16% increase, increase in funding for the United States Department of Agriculture (USDA).
- $4 billion for USDA’s research, education, and outreach programs
- $40 million for USDA’s climate hubs to expand climate science tools and increase landowner awareness of—and engagement in—efforts to combat climate change
- $400 million for rural electric providers financial flexibility to promote clean energy
- $6.5 billion in loan authority for rural electric loans, to support additional clean energy, energy storage
- Create an Equity Commission to review how current farm programs for racial and geographical inequities
- $15 million for the local agriculture marketing program to support local supply chains
- $6.7 billion for critical nutrition programs, including the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)
- $65 million for Reconnect, the Rural e-Connectivity Program which provides a down payment for grants and loans to deploy broadband to unserved areas, prioritizing tribal lands
- $39 million for advanced communications research at the National Telecommunications and Information Administration, which would support the development and deployment of broadband and 5G technologies by identifying innovative approaches to spectrum sharing
The plan calls for a $131.7 billion, 23.5%, increase in funding for the Department Health and Human Services (HHS). additional funding to HHS includes:
- $1.6 billion increase in funding for CDC
- $905 million for ASPR’s Strategic National Stockpile (SNS) to maintain replenishment of critical medical supplies and restructuring efforts initiated during the COVID-19 pandemic
- $9 billion increase for NIH to promote research
The proposal calls for an additional $14 billion in spending compared to 2021 for climate programs. The additional spending includes:
- $1.7 billion in energy saving retrofits to homes, schools, and Federal buildings
- $600 million for electric vehicles and charging infrastructure in the individual budgets of 18 Federal agencies, including dedicated funds at the General Services Administration for other agencies and for United States Postal Service charging infrastructure
- $2 billion to put welders, electricians, and other skilled labor to work building clean energy projects
- $1.4 billion, including $936 million toward a new Accelerating Environmental and Economic Justice initiative at the EPA
- $100 million to develop a new community air quality monitoring and notifications program
- $550 million to remediate of oil and gas wells and reclaim abandoned mines
- $4 billion to multiple agencies to fund research related climate change
- $10 billion to be invested in clean energy innovation
- $1.2 billion to the Green Climate Fund
- $550 million to remediate thousands of oil and gas wells and reclaim abandoned mines
- $100 million to create good-paying union jobs to address orphan oil and gas wells as well as abandoned mine lands within the National Forest System
The plan calls for a $46.1 billion, 10.2%, increase in funding for the Department of Energy (DOE). additional funding to DOE includes:
- $1.9 billion in a Building Clean Energy Projects and Workforce Initiative at DOE to begin goal of carbon pollution free electricity by 2035
- Increased funding for a revitalized Office of Fossil Energy and Carbon Management
- $1 billion for a new Advanced Research Projects Agency for Climate and the existing Advanced Research Projects Agency-Energy
- Additional funding for the newly established Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization
The plan calls for a $2 billion, 21.3%, increase in funding for the Environmental Protections Agency (EPA). additional funding to EPA includes:
- $1.8 billion in programs that would help reduce greenhouse gas emissions, while also delivering environmental justice and creating jobs
- $882 million for the Superfund Remedial program for EPA to clean up contaminated land, reduce emissions of toxic substances and greenhouse gases from existing and abandoned infrastructure, and respond to environmental emergencies, oil discharges, and natural disasters
- $1.4 billion, including $936 million toward a new Accelerating Environmental and Economic Justice initiative
Department of Interior (DOI)
The plan calls for a $17.4 billion, 16%, increase in funding for the Department of Interior (DOI). additional funding to DOI includes:
- $450 million for DOI, more than double the 2021 enacted discretionary level, to remediate many of the thousands of orphaned oil and gas wells and reclaim abandoned mines on Federal and non-Federal lands
- Additional $550 million to decrease climate pollution, accelerate clean energy deployment, and expand efforts around climate adaptation and ecosystem resilience among all the Department’s land management agencies
- $200 million for conservation
Amtrak and Rail
The plan requests a 35% increase in funding for Amtrak to improve and expand service. Biden’s $2.7 billion request for Amtrak runs counter to the Trump administration’s repeated attempts to cut funds to the rail network.
The budget also request $625 million for a new passenger rail competitive grant program to invest in passenger rail as a competitive, low-carbon option for intercity travel. It also request $375 million for Consolidated Rail Infrastructure and Safety Improvement grants to improve safety, throughput, and reliability of the Nation’s rail network, which is essential to transporting goods and passengers.
Michael Best Strategies “American Jobs Plan Overview”
On March 31,the Biden-Harris Administration released its $2+ trillion American Jobs Plan, a proposal to restore and upgrade U.S. infrastructure, and its Made in America Tax Plan, a proposal to overhaul the corporate tax code and fully fund the American Jobs Plan within 15 years. We hope that the attached Michael Best Strategies’ high-level is useful to you. Please click the image below for the attachment.