Bracing for a Tough Budget Cycle

The fiscal year (FY) 2017 appropriations process has yet to conclude, but interest is already turning to FY 2018. The Trump Administration has begun releasing limited details on what the President’s FY 2018 budget request could contain when released later this spring. A so-called “skinny budget,” or top-line, department-level outline, is expected to be released next week with full details provided in May.

The President has stated his intent to propose an additional $54 billion in defense spending. Such an increase coupled with promises of middle class tax cuts, corporate tax cuts, a $1 trillion infrastructure plan, and keeping Medicare and Social Security fully intact, leaves non-defense discretionary spending as the only logical target as an offset. Non-defense discretionary spending covers everything in the federal budget that is not defense-related or entitlement programs; it includes funding for scientific research at the National Science Foundation, National Institutes of Health, and dozens of other agencies across the federal government. While funding for science may not be a direct target for cuts by the Administration (it is too soon to tell), the U.S. scientific enterprise would still be significantly harmed by such reductions in non-defense discretionary spending.

Complicating things further are the caps on discretionary spending under which appropriators are forced to operate. In 2015, lawmakers made a deal to raise the spending caps for 2016 and 2017, while maintaining equity between the defense and non-defense sides of the ledger. Without action from Congress this year, top-line budget levels will be even tighter in 2018. Further, it is clear that the Administration has no interest in maintaining balance between defense and non-defense discretionary spending.

Given the ever-increasing divisiveness in Washington and the need to get 60 votes to get most bills passed through the Senate, a possible outcome for funding in the year ahead is a series of continuing resolutions that keeps funding roughly flat and the government open. More will be known as we wade into FY 2018 funding negotiations later this year once the President’s budget is released.

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