Federal Update | President’s Budget Outline for FY20 Released

The White House yesterday released its topline budget request for Fiscal Year 2020, once again proposing increased spending on defense, large cuts to spending on non-defense and mandatory programs, and significant new funding for a border wall. Of these familiar themes, which were included in each of the President’s two prior budget requests, only a growing defense budget has come to fruition. With Democrats now in control of the House and the 2020 election cycle already underway, the President’s newest budget is no more likely to be enacted than previous versions. However, it does give a preview of the Administration’s priorities and where we can expect the policy and funding fights to take place, particularly with agreement needed later this year to fix issues like the debt limit and the scheduled return of sequester level spending.

The President’s Budget Request

The President’s FY20 budget proposes overall spending of $4.75 trillion, of which $1.3 trillion would be spent on the discretionary side of the budget that Congress appropriates each year. The requested discretionary total is 1.8 percent below last year’s level. Though such a reduction may seem modest, within that total, the president proposes a 9.3 percent reduction to non-defense spending – which funds student aid, NIH, NSF and other research agencies – while increasing defense by nearly five percent. The President also includes a request of $8.6 billion for border wall funding, just weeks after the end of the longest government shutdown in history that resulted from Congressional rejection of his previous request of $5.7 billion. Given the level of cuts and the shift in priorities, many accounts of long-standing concern to the University are substantially cut or eliminated in the budget proposal, including key higher education and student aid programs, ARPA-E, and NIH, which is cut 12 percent.

On the mandatory side of the budget, the White House proposes changes to and cuts of $1.25 trillion over ten years to programs like Medicare, Medicaid, Social Security and some student loan programs. For student loans, the Administration proposes cutting student in-school interest subsidies, paring back loan forgiveness (including the elimination of the Public Service Loan Forgiveness program), and enacting new institutional risk share in student loan programs.

Since the budget proposal released yesterday was not the complete request for FY20, we do not yet have proposals for certain departments, agencies and programs. We expect additional details on the President’s blueprint to be released over the coming week. As such, the overview below should be considered preliminary.

Looking Ahead and Contact

As alarming as these cuts appear, it is important to note that Congress will take the lead on budget matters and the overall discretionary levels to be appropriated this year. And most lawmakers on both sides of the aisle already agree that the low statutory budget caps scheduled to take effect for FY20 need to be raised significantly and have also tended to work together in a bipartisan fashion to develop and pass funding bills more like FY19 than the President’s request. However the President does have substantial power in this process as well. Because the caps are written into law, any change will require the President’s signature as will the final FY20 appropriations measures. With the President standing firm on his vision for spending, Democrats now in control of the House, and agreement needed on both the debt limit and a budget deal, a tumultuous budget year likely lies head.

If you have any questions on this update or Harvard’s engagement in Washington, please feel free to be in touch with Suzanne Day (suzanne_day@harvard.edu) or Jon Groteboer (jon_groteboer@harvard.edu) in the Office of Federal Relations.