President's FY15 Budget Released

March 4, 2014

The White House submitted the President’s FY15 Budget Request to Congress today, marking the official start to the budget and appropriations process for the fiscal year beginning on October 1. Though non-binding on the Congress, the President’s budget outlines the Administration’s policy and spending priorities for the coming year and serves as a starting point from which lawmakers develop spending plans and potentially a longer budget blueprint. Unique to this year, the President’s request was not submitted in full, and many of its specific details will not be known until next week. Yet today’s submission does illustrate that the President continues to prioritize areas of investment like higher education and research. Following is a high-level overview of the President’s request, as well as a brief look at the appropriations year ahead.

The President’s Budget Request

The top-line request of $1.014 trillion in federal discretionary funding is roughly equal to current spending and is consistent with the budget level set in the December 2013 Murray-Ryan deal, which established overall spending levels and provided partial – albeit temporary – relief from scheduled sequester cuts in both FY14 and FY15. However, it is important to be mindful that in nominal terms, this agreed-to FY15 level is still $76 billion below the pre-sequestration FY10 top-line, suggesting even at the very beginning of the FY15 budget process how difficult it will be to provide funding in priority areas. Because of this reality, and in order to cast a spotlight on the kinds of priorities that might be funded if there were more revenue, the President’s proposal includes an “Opportunity, Growth and Security Initiative (OGSI).” While his overall budget proposes specific program funding levels based on the agreed-to FY15 budget top line, his plan includes the new OGSI that would close certain tax loopholes to raise $56 billion and commit those dollars to additional discretionary spending specifically aimed at funding research, manufacturing, education and other priorities. Predictably, this two tier approach with its focus on increased spending was panned by Republican leaders even before the budget had been submitted.

Not surprisingly with few new dollars available, the President’s baseline budget holds many programs of importance to the university relatively flat. With the exception of Pell grants that have a statutory inflationary increase in the maximum grant to $5830, student aid programs will remain close to FY14 levels. The same is true for the National Endowment for the Humanities, which would remain flat at $146 million. In terms of research accounts, details are still emerging – particularly at the Department of Defense, where an early read suggests basic and applied research is mostly flat. Some of the other highlights in the research accounts include:

National Institutes of Health

FY14:                           $29.9 billion

FY15 Request:            $30.2 billion (+ 1.0%)

OGSI plus-up:             $970 million

FY10:                           $30.8 billion

National Science Foundation

FY14:                           $7.2 billion

FY15 Request:            $7.3 billion (+ 1.4%)

OGSI plus-up:             $552 million              

FY10:                           $7.25 billion                  

Department of Energy Office of Science

FY14:                           $5.07 billion

FY15 Request:            $5.11 billion (+ 0.8%)

OGSI plus-up:              details to come

FY10:                           $4.9 billion

ARPA-E

FY14:                           $280 million

FY15 Request:            $325 million (+ 16.1%)

OGSI plus-up:              details to come

FY10:                           n/a

NASA

FY14:                           $17.6 billion

FY15 Request:            $17.5 billion (- 0.6%)

OGSI plus-up:             $886 million

FY10:                           $18.7 billion

For their part, House Republicans will likely write a budget resolution at the agreed-to FY15 level as a means to contrast their priorities with that of the President’s. Contrary to the White House’s $56 billion stimulus proposal, House Budget Committee Chairman Paul Ryan (R-WI) is expected to once again write a budget that would balance the budget over 10 years, with little to no new revenue. Meanwhile, Senate Democrats have indicated they will not write a new budget this year, given agreement on the $1.014 trillion level.

Looking Ahead

The 2013 Murray-Ryan agreement that established $1.014 trillion as total spending level for FY15 eliminates the need for a bicameral and partisan fight over setting a top line budget number, removing a significant bottleneck in the annual appropriations process. With that pre-approved number in mind lawmakers can turn directly to formulation of the 12 annual funding bills which optimists hope will get individual consideration on the House and Senate floors. However, even with this head start on the process, the election year calendar poses its own hurdles: many Republican primaries take place in June, meaning incumbents may be less inclined to vote on spending bills and the many political-messaging amendments included in these debates before then. Additionally, traditional recesses around the July 4th holiday and over the month of August leave little time for debate and action before the October 1 start of the new fiscal year. That said, election year politics will likely prevent any showdown that could lead to even a short-term government shutdown; instead, we are likely to see a continuing resolution that would fund agencies into a post-election lame duck session. 

Already attention is Washington is focused increasingly on the coming mid-term elections. Primaries are already underway that will shape the contests in several states, with Texas Republicans voting today on a Senate nominee, choosing between incumbent John Cornyn and several Tea Party-backed conservatives. In the House, Democrats continue to work toward regaining the majority but are handicapped in these efforts by the redistricting that solidified control of districts and numerous retirements. Recent days have featured several reports, including The New York Times and The Washington Post, relating to the congressional elections. We will also continue to follow developments on this front closely.

Contact

Please be in touch with Suzanne Day or Jon Groteboer in the Washington office with any questions or concerns: (202) 863-1292.