The President’s FY19 Budget: Pay Attention to What He Does, Not What He Says.
Yesterday, President Trump released his budget proposal for funding the government in Fiscal Year 2019, which runs from October 1, 2018, through September 30, 2019. Although his proposal, titled an “Efficient, Effective, Accountable: An American Budget,” represents the first full budget the President has submitted to Congress since taking office, it very much follows the blueprint set by last year’s "skinny budget." In other words, it seeks significant increases in defense spending while at the same time proposing deep cuts to critical programs that help families get by and get ahead.
While the budgets that presidents propose to Congress are aspirational in nature and are often ignored on Capitol Hill the moment they arrive, we should keep in mind that the President’s budget is one of the best reflections of an administration’s fiscal and programmatic vision for the country. In that vein, this year’s budget continues to stand in sharp contrast to the he has articulated since assuming office: helping working-class people thrive. Even as recently as his first State of the Union address, the President has insisted this is his priority. His budget proposal tells us otherwise.
As you’ll see below, when we look at that speech and compare it to his latest budget, many of his budget proposals around the safety net, housing programs, consumer protections and tax issues would leave America’s internal affairs far from “safe, strong and proud.”
"And just as I promised the American people from this podium 11 months ago, we enacted the biggest tax cuts and reforms in American history. Our massive tax cuts provide tremendous relief for the middle class and small businesses." - President Trump, January 30
Although Congress enacted large, sweeping tax cuts late last year, the reality is that a majority of the $1.5 trillion in tax relief brought by the Tax Cuts and Jobs Act will overwhelmingly go to benefit big businesses and the richest families in the country. In doing so, low- and middle-income families would receive very little, if any, support to save for retirement, go to college, buy a home or start a business. Even worse, as we continue to highlight below, there’s a direct tradeoff between the massive giveaways in the tax bill and the President’s budget as the cuts he calls for to programs workings families depend on are being used to partially offset the cost of these tax cuts for the rich.
Unfortunately, the President’s budget continues to build on the increasingly unfair nature of our newly revised tax code by proposing to restrict taxpayers’ access to the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC), leaving out workers’ spouses and qualifying children who have a Social Security number, as well as countless filers who use an Individual Taxpayer Identification Number (ITIN) to file their taxes.
Yet, while the President’s budget continues the fight against ensuring that the tax code provides equitable support to those working to achieving economic prosperity, it does carry some good news when it comes to ensuring working families can have equal access to the many benefits the tax code has to offer them. For example, the President’s budget request includes $15 million in funding for the Volunteer Income Tax Assistance (VITA) program in FY19. While this is welcome news—particularly as it matches the current funding level for the program—it should be noted that VITA sites need funding at double this amount ($30 million) or more to satisfy demand for the free tax services it provides to millions of underserved Americans. In addition to the request for VITA, the President’s budget also requests funding for the development of paid tax preparation regulations. Given that hairdressers currently face more regulations than some of the people who prepare your taxes, this is long overdue.
"In our drive to make Washington accountable, we have eliminated more regulations in our first year than any administration in history." - President Trump, January 30
While the President’s State of the Union speech spoke of making “Washington accountable,” his budget somehow finds that achieving that requires making detrimental reforms to the Consumer Financial Protection Bureau—the only federal agency responsible for looking out for consumers and ensuring that financial institutions are held accountable for their actions in the marketplace.
Included among the changes the President’s budget seeks to make to the Bureau are restrictions to the agency’s enforcement abilities as well as modifications to its funding structure. For example, the President calls for the Bureau’s budget to be moved under the regular appropriations process, rather than maintaining the independent funding it currently receives from the Federal Reserve. If enacted, such a move would only serve to provide members of Congress the ability to politicize the work of the agency, providing the opening many on Capitol Hill have long sought to vastly limit the effectiveness and independence of the agency. Given the amount of good work the agency has been able to accomplish in just six years under its current structure—including returning nearly $12 billion to 30 million consumers—such a change would eventually leave everyday consumers without a watchdog in Washington to keep financial institutions accountable.
"We want every American to know the dignity of a hard day's work. We want every child to be safe in their home at night. And we want every citizen to be proud of this land that we love. We can lift our citizens from welfare to work, from dependence to independence, and from poverty to prosperity." - President Trump, January 30
Housing and Community Development
With a handful of exceptions, when it comes to affordable homeownership and community development programs, the President’s FY2019 budget defunds as much as it did last year, which is quite a bit. To this point, the President calls for the budget of the U.S. Department of Housing and Urban Development (HUD) to be funded at $39.2 billion—an 18.3% reduction from current funding levels and $1.5 billion less than he requested last year.
Much like the President’s previous budget, this one also eliminates important programs that invest in housing and community development for low-income communities like the Community Development Block Grant (CDBG) program, the Home Investment Partnership Program, Choice Neighborhoods, and the 502 Single Family Housing Direct and 504 Home Repair programs. While funding for the Community Development Financial Institutions (CDFI) Fund—a program that helps finance mission-driven financial institutions in underserved communities—was not eliminated, the budget calls for a 94% reduction to the program’s budget. A far cry from the more than $240 million this critical fund that has been allocated over the past two years, the $14 million requested by the President for FY19 would be for administrative fees to manage the Bond Guarantee and New Markets Tax Credit Program. In addition to these reductions, the budget also completely defunds organizations like NeighborWorks America and the Delta Regional Authority, while keeping the similar Appalachian Regional Commission alive with $152 million in funding.
As he did in last year’s “skinny budget,” the President’s FY19 budget request cuts to safety net programs that support our most vulnerable Americans. Over the next 10 years, the President calls for a $213 billion cut the Supplement Nutrition Assistance Program (SNAP) and a $21 billion cut to Temporary Assistance for Needy Families (TANF). Such cuts would leave vulnerable families working to achieve economic mobility without the critical assistance they need to not fall further into poverty.
Showing where his values lie, the President also proposes hundreds of billions of dollars in cuts to Medicare and Medicaid over the next decade, risking the health of our most vulnerable Americans. In addition, the President calls to eliminate funding for the Community Services Block Grant program, which helps families through anti-poverty programs like housing, employment and nutrition assistance, as well as the Low-Income Housing Energy Assistance Program (LIHEAP), which helps provide utility assistance to low- and moderate-income families throughout the country.
Finally, following last month’s announcement to allow states to impose Medicaid work requirements, the President’s budget fills in the details for how he would ensure that every American knows “the dignity of a hard day's work,” as it calls for the implementation of work requirements for those relying on housing, food and unemployment assistance to make ends meet. Far from the President’s words at the State of the Union, these requirements would only serve to give federal, state and local officials greater ability to penalize families trying to find work but unable to secure employment, as well as those working low-wage jobs that come with irregular hours.
As we mentioned earlier, the President’s budget is an aspirational document that, at best, will serve as a messaging platform for the administration as it pushes for its policies on Capitol Hill and to the broader public throughout the next year. While the document will provide appropriators with a sense of where the administration stands on the funding of certain programs or policies, these appropriators, along with the rest of Congress, ultimately get the final say in what gets funded and at what levels.
As in years past, this dynamic presents an opportunity for advocates to continue pushing for the funding levels they want to see in the programs they care about the most. However, this current fiscal year along with the next comes with the added benefit of an additional $300 billion in government funding programs, thanks to last week’s bipartisan budget deal. Although many groups will be vying for increases to their programs of choice, this budget deal has served to remove many of the arguments heard in years past that there is no wiggle room in Congress to support the program you and your community rely on.
Moving forward, as you and your partners begin to reach out to Congress about specific programs and their funding levels, remember to equip yourself with stories and data about the impact these programs are having in your community and work to contrast that with the devastation that the cuts proposed by the President would have on the people you serve. More importantly, invite others to join you in using our one-stop Advocacy Center, where they can find easy to use call scripts and email templates to make these funding pitches as easy as possible.
While the budget is a messaging document that is often ignored, it’s harder for legislators to justify their ignorance if they’re not hearing from their communities and constituents. With that in mind, take a moment to look over the President’s budget for yourself or check out the resources offered by other national partners with which you collaborate. From there, call your Representative and Senators and tell them to oppose this harmful budget.
Ultimately, taking this small but critical step can go a long way as we work together to ensure that programs are funded at the levels needed to truly fulfill the President’s own stated goal of moving families “from poverty to prosperity.”