Federal Update: Trump Administration FY18 "America First" Spending Outline Proposes Deep Cuts, Fundamental Changes

March 16, 2017

While the higher education community has harbored concerns about how the new Administration’s expressed priorities of aggressive budget reductions coupled with significant increases to Defense department spending might impact programs essential to research universities, there had thus far been few specifics.  However, today, the Trump Administration released the outline, or ”skinny budget,” of its FY18 spending plan (available here). In this high level outline, the Administration validates many of these concerns by including unprecedented cuts to research, steep reductions in student aid, and the elimination of the National Endowments for the Arts and Humanities. The values expressed in the “skinny budget” sent a strong message that the higher education community and those who rely on this essential federal partnership will need to work diligently to build upon the strong existing bipartisan support on the Hill and continue to work with the Administration in the hopes that, as the process unfolds, there will ultimately be significant alterations in the policies outlined this morning.The Skinny Budget:

The “America First” FY18 budget blueprint lays out the spending priorities of the Trump Administration.  Top of the list is a major increase in defense spending, totaling $54 billion.  The proposal also reorders priorities in domestic accounts and agencies to support Presidential initiatives, including moving forward on construction of a border wall and expanded school choice.  Overall these initiatives are paid for in damaging cuts to non-Defense discretionary spending. The proposal targets programs across the government, including an 18 percent ($5.8 billion) cut to NIH, a 14 percent cut to the Education Department, and a recommended 30 percent reductions in funding for the EPA and the State Department.  On top of the massive NIH cut, research accounts government wide would be slashed under this plan, and the budget seeks to institute a "major reorganization" of the agency's institutes and consolidates the Agency for Healthcare Research and Quality within NIH.  The skinny budget also directly identifies particular programs for wholesale elimination, including the NEH, NEA, the Supplemental Education Opportunity Grant program, ARPA-E, and others. Though not queued for complete elimination, many other research and student-aid accounts are suggested for deep cuts, including Pell Grants ($4 billion cut), TRIO, Work Study, the DOE Office of Science, and more. 

Early Reaction from Capitol Hill:

Early reaction from Capitol Hill suggest there will be significant changes to this plan, if not an entire rewrite.  Members of both Parties strongly oppose any cuts to NIH, and in fact, most support increasing funding.  Democrats are opposed to the disproportionate treatment of Defense and non-Defense spending in the proposal and would likely try to block--particularly in the Senate, where 60 votes are needed for spending bills--any attempts to raise Defense spending without dollar-for-dollar increases in non-Defense.  And leading Republicans have indicated they are concerned about major pieces of the Administration's proposed funding levels, especially with regards to research accounts, education cuts and many diplomatic activities.  According to reports, even many Cabinet Secretaries and agency heads opposed the budget's proposed cuts to their funding. 

Process going forward:

This remains early in the process, and while a significant marker of the Administration's priorities, the President's budget is merely a first step, and it is Congress that ultimately controls the purse strings.  The Administration's skinny budget released today will be followed by a detailed, line-by-line proposal likely in May.  Before taking up FY18 with any real intensity, Congress must first complete funding for FY17, with action expected around April 28 when the current Continuing Resolution expires.  Around the same time, Congress will begin efforts on FY18, initially with a focus on passing a budget resolution followed by consideration of appropriations bills.  The process will likely be long and these proposals will see significant changes and rewrites during Congressional deliberation that will include dedicated engagement on the part of the higher education and research communities.

The magnitude of the proposed cuts, which go beyond recent fiscally restrained budget proposals, constitute a significant threat to the longstanding partnership between the federal government and research universities.  With these concrete proposals, direct engagement with policymakers will take on a new urgency and also allow for clear discussions of the impact of federal fiscal policy.

At Harvard, we continue to engage across the University's priorities with a focus on immigration policies, research, student aid, endowments, and the humanities, and we will continue to work with key Members of Congress and alumni to highlight the extraordinary work of faculty and students--whose voices will be critical--and to advocate for continued bipartisan support for investment in these areas. 

As always, please feel free to reach out with any questions to Kevin Casey (kevin_casey@harvard.edu), Suzanne Day (suzanne_day@harvard.edu), or Jon Groteboer (jon_groteboer@harvard.edu) on our federal relations team.