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OMB Releases Memo Outlining Agency Cuts, Lifts Hiring Freeze

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Today, the Office of Management and Budget (OMB) released a memo (M-17-22) to agency heads directing federal agencies to make deep personnel cuts over the next year. This memo replaces the Presidential Memo freezing hiring (M-17-17), which was signed by the President on January 25th, which instituted a hiring freeze across all federal agencies.

The OMB memo tells agencies to “begin taking immediate actions to achieve near-term workforce reductions.” The OMB memo instructs agencies to develop an initial high-level plan by June 30 to “maximize employee performance”, meaning take steps to reward employees deemed effective while working to improve or dismiss weak performers. The memo also calls on agencies to develop a plan to shrink personnel in an effort to accommodate long term budget reductions outlined in the skinny budget. The plan is due by September as part of the FY2019 internal budget submission. Specific cuts will be left up to agencies. It should be noted that many positions across the federal government, including many high-level agency positions, are open and unfilled. Many cuts could be realized by simply not filling those jobs.

Additionally, the memo says that agencies should strive to eliminate or merge programs that are duplicative as well as eliminate non-essential to the agency’s mission or are already carried out in some form by state and local government.

Finally, the memo does attempt to reduce federal reporting requirements requiring the OMB with other agencies will identify initial reporting activities that can be immediately stopped or modified to reduce reporting and compliance burden within 60 days.

America First Budget Released

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The Trump Administration released its first budget, called the American First Budget this morning. Coming in at 62 pages total, the “America First” budget blueprint is what is known as a “skinny budget” is somewhat scant on details. The budget’s main theme is doing more with less by eliminating “nonfunctioning” or duplicative programs and wasteful spending; streamlining federal operations through accountability measures within the agencies; and regulatory reform. The $1.15 trillion proposal in discretionary spending would amount to an overall cut of 1.2 percent, when compared to current spending levels on an annualized basis, according to the White House document. The proposed cuts will be unpopular with Congressional Republicans and Democrats alike, most notably the proposed $5.8 billion cut to the National Institutes of Health. 

Agencies that would receive increased funding include, the Department of Defense, Department of Homeland Security, and Veterans Affairs.  The blueprint specifically calls out the need to ramp up and focus on military operations as well as border security. This increased spending would be accomplished without increasing the deficit by cutting the amount nondefense discretionary (NDD) spending.  All other NDD agencies mentioned are cut between 0.8-31%. Of note, there is no mention of the National Science Foundation anywhere in this document.  

Previously reported items – such as the $54 billion in defense spending (a $52 billion increase over FY2017 CR levels) to the DOD is included to ramp up military readiness and operations; a 6.8% increase to DHS, including $1.5 billion to remove illegal immigrants and $2.6 billion for a wall along the southern border; cuts to NOAA’s Sea Grant and EPA programs – are included in the blueprint. What has not been widely reported is the Administration’s request for an additional $65 billion for the DOD’s Overseas Contingency Operations (OCO) fund. This funding does not count against the budget caps in the sequester.

In terms of next steps, it should first be noted that the Administration’s budget is a kickoff to the negotiations of the upcoming fiscal year’s budget and appropriations negotiations. In this case, that would be FY2018. It is a guiding document intended to give a glimpse into the priorities and intended policies of the Administration and it is rarely, if ever, taken up whole cloth by Congress.

Second, this blueprint, as it is presented, is not possible under the current budget structure without Congress acting legislatively. The Budget Control Act, which created the sequester, specifically created a firewall between defense spending and NDD spending. This means, the White House and Congress cannot cut NDD funds to shift over to defense funding without changing the law. If defense spending increases or decreases, so must the other.  It cannot be done by budget reconciliation alone; all changes will require 60 votes in the Senate.

This budget proposes devastating cuts to scientific programs. It would eliminate long-standing, successful programs, which have had profound impact on our community and the nation. These are programs that enjoy bipartisan support in Congress. Many of the programs listed for cutting or reductions are long-time federal priorities of the UW and Congress, including funding NIH. UW has long-advocated for the value of these programs and their funding and we will continue to do so to our delegation and with fellow universities and broader stakeholders within an interest in preserving this funding.

There are a host of programs singled out to be cut. Those are listed at the end.

Here are highlights:

USDA

USDA is cut by 21% to $17.9 billion from the FY 2017 CR level.

  • SNAP and WIC are preserved at $6.2 billion to serve all projected participants.
  • Fully funds wildland fire preparedness and suppression activities at $2.4 billion.
  • Continues to fund NIFA, ARS and ag research at $350 million (which is a cut), while prioritizing agriculture and food issues such as increasing farming productivity, sustaining natural resources, including those within rural communities, and addressing food safety and nutrition priorities.

—

Commerce

Commerce is cut by 16% or $.15 billion over FY2017 CR levels to $7.8 billion.

  •  Eliminates the Manufacturing Extension Partnership (MEP) program.
  •  Cuts $250 million in targeted National Oceanic and Atmospheric Administration (NOAA) grants and programs supporting coastal and marine management, research, and education including Sea Grant (because Sea Grant primarily benefits industry and State and local stakeholders). The budget maintains these programs are a lower priority than core functions maintained in the Budget such as surveys, charting, and fisheries management. It does not go into detail as to which NOAA coastal and marine programs are cut, but it is presumed to be NOAA’s Ocean and Atmospheric Research office.
  • National Weather Service forecasting capabilities are preserved by investing more than $1 billion while continuing to promote efficient and effective operations.
  • Maintains NOAA’s Joint Polar Satellite System and Geostationary Operational Environmental Satellite programs to remain on schedule.

—

Defense

DOD receives $639 billion, which is a $54 billion total increase (a $52 billion increase from the 2017 annualized CR level). The total includes $574 billion for the base budget, a 10% increase from the 2017 annualized CR level, and $65 billion for Overseas Contingency Operations.

—

Education

ED is cut by $9 billion, or 13% from the FY2017 CR levels, to $59 billion.

  • School Choice options are ramped up by $1.4 billion to a total of $20 billion (it also assumes $100 billion in state and local funding). This additional investment in 2018 includes a $168 million increase for charter schools, $250 million for a new private school choice program, and a $1 billion increase for Title I, dedicated to encouraging districts to adopt a system of student based budgeting and open enrollment that enables Federal, State, and local funding to follow the student to the public school of his or her choice.
  • Maintains IDEA funding of $13 billion.
  • Maintains Pell Funding at $3.9 billion, but cancels/rescinds the $3.9 billion carryover funding, which ensured the stability of the program.
  •  Eliminates:
    • Supporting Effective Instruction State Grants
    • 21st Century Community Learning Centers
    • Supplemental Educational Opportunity Grant
    • Striving Readers
    • Teacher Quality Partnership
    • Impact Aid Support Payments
  • International Education programs are eliminated, which is presumed to be Title VI International Education and Fulbright-Hays.
  • Cuts TRiO and GEAR UP programs by $193 million to $808 million from the FY2017 CR level. In FY2016, TRiO was funded at $900 million and GEAR Up received $323 million. It is unclear how the cuts will be allocated. The budget says, “Funding to TRIO programs is reduced in areas that have limited evidence on the overall effectiveness in improving student outcomes. The Budget funds GEAR UP continuation awards only, pending the completion of an upcoming rigorous evaluation of a portion of the program.”

 —

Energy

DOE is cut by 5.6% percent to $28 billion.

  • $120 million to restart licensing activities for the Yucca Mountain
  • $6.5 billion to advance the Environmental Management program mission of cleaning up the legacy of waste and contamination from energy research and nuclear weapons production.
  •  Office of Science is cut by $900 million (it is unclear what and where). The FY 2016 level is $5.3 billion. The cut ensures the Office of Science “continues to invest in the highest priority basic science and energy research and development as well as operation and maintenance of existing scientific facilities for the community.”
  • “Focuses funding for the Office of Energy Efficiency and Renewable Energy, the Office of Nuclear Energy, the Office of Electricity Delivery and Energy Reliability, and the Fossil Energy Research and Development program on limited, early-stage applied energy research and development activities where the Federal role is stronger.” This presumes a cut, reflected in the overall cut, and reprioritization of projects and programs, but there are no details.
  • Eliminates
    • ARPA-E
    • Title 17 Innovative Technology Loan Guarantee Program
    • Advanced Technology Vehicle Manufacturing Program
    • Weatherization Assistance Program
    • State Energy Program

 —

HHS

HHS is cut by 17.9%, or $15.1, billion to $69 billion. (Right now, this is a nonstarter with Congress and totally in opposition to the efforts of the House and Senate in the last two appropriations cycles and the December 2016-passed 21st Century Cures Act).

  • $500 million increase to opioid abuse funding
  • Recalibrates Food and Drug Administration (FDA) medical product user fees to over $2 billion in 2018, approximately $1 billion over the 2017 annualized CR level, and replaces the need for new budget authority to cover pre-market review costs. (NOTE: Congress sets the product user fees, not the Administration).
  • Cuts National Institutes of Health’s (NIH) by $5.8 billion to $25.9 billion and proposes unclear “consolidations and structural changes across NIH organizations and activities.”
  • Creates a new Federal Emergency Response Fund to rapidly respond to public health outbreaks, such as Zika
  • Eliminates:
    • Eliminates $403 million in health professions and nursing training programs, which is assumed to be Title VII and Title VIII programs.
    • Low Income Home Energy Assistance Program (LIHEAP)
    • Community Services Block Grant (CSBG)
    • Fogarty International Center
  • Consolidating the Agency for Healthcare Research and Quality within NIH

 —

Homeland Security

DHS receives a 6.8% increase to $44.1 billion.

  • Adds $2.6 billion for a wall along the US’s southern border.
  • Adds $314 million to recruit, hire, and train 500 new Border Patrol Agents and 1,000 new Immigration and Customs Enforcement law enforcement personnel in 2018.
  • Adds $1.5 billion for expanded detention, transportation, and removal of illegal immigrants.
  • Adds $1.5 billion for DHS cyber activities that protect Federal networks and critical infrastructure.
  • Restructures selected user fees for the Transportation Security Administration (TSA) and the National Flood Insurance Program (NFIP) to ensure that the cost of Government services is not subsidized by taxpayers who do not directly benefit from those programs. (Most of these are Congressionally directed, but reauthorized semi annually).
  • Cuts FEMA by $667 million including cutting Pre-disaster Mitigation Grants and Proposes a 25% nonfederal cost share match on FEMA preparedness grants.
  • Eliminates “unauthorized or underperforming” TSA programs by $80 million. 

— 

Housing and Urban Development

HUD is cut by $6.2 billion, or 13.2%, to $40.7 billion.

  •  Increases safe and healthy lead-safe homes programs by $20 million to $130 million.
  •  Eliminates
    • Community Development Block Grant (CDGB) ($3 billion)
    • HOME Investment Partnerships Program
    • Choice Neighborhoods
    • Self-help Homeownership Opportunity Program
    • Section 4 Capacity Building for Community Development and Affordable Housing

 —

Interior

DOI is cut by 12%, or $1.5 billion, to $11.6 billion.

  • Increases funding by an unspecified amount for DOI programs that support environmentally responsible development of energy on public lands and offshore waters.
  •  Eliminates unnecessary, lower priority, or duplicative programs, including discretionary Abandoned Mine Land grants that overlap with existing mandatory grants, National Heritage Areas that are more appropriately funded locally, and National Wildlife Refuge fund payments to local governments that are duplicative of other payment programs.
  • Reduces funds for new federal lands acquisition.
  • Reduces funds for other DOI construction and major maintenance programs.
  • $900 million for DOI’s U.S. Geological Survey to focus investments in essential science programs. This includes funding for the Landsat 9 ground system, as well as research and data collection that informs sustainable energy development, responsible resource management, and natural hazard risk reduction, which is a slight cut.

 —

Justice

DOJ is cut by 3.8 percent or $1.1 billion to $27.7 billion.

  • An increase of $249 million, or 3 percent, above the 2017 annualized CR level for the Federal Bureau of Investigation (FBI), including $61 million more to fight terrorism and combat foreign intelligence and cyber threats and address public safety and national security risks that result from malicious actors’ use of encrypted products and services.
  •  An increase of $80 million to hire 75 additional immigration judge teams.
  • $171 million increase for additional short-term detention space to hold Federal detainees, including criminal aliens, parole violators, and other offenders awaiting trial or sentencing.
  • Cuts federal prison construction due to an over-abundance in space but provides $80 million for the activation of an existing facility to reduce high security Federal inmate overcrowding and a total of $113 million to repair and modernize outdated prisons.

 —

Labor

DOL is cut by 21%, or $2.5 billion, for $9.6 billion for the Department of Labor, a $2.5 billion or 21 percent decrease.

  • Eliminates:
    • Senior Community Service Employment Program (SCSEP)
    • Bureau of International Labor Affairs grant program
    • Occupational Safety and Health Administration’s unproven training grants
  • Decreases Federal support for job training and employment service formula grants, shifting more responsibility for funding these services to States, localities, and employers.
  • Refocuses the Office of Disability Employment Policy, eliminating less critical technical assistance grants and launching an early intervention demonstration project to allow States to test and evaluate methods that help individuals with disabilities remain attached to or reconnect to the labor market.

 —

International Programs

USAID is cut by 28% to $25.6 billion. The Budget also requests $12.0 billion as Overseas Contingency Operations funding for extraordinary costs, primarily in war areas like Syria, Iraq, and Afghanistan, for an agency total of $37.6 billion. Treasury International Programs are cut by $803 million or 35% to $1.5 billion.

  • Gives $3.1 billion for Israel
  • Eliminates
    • Global Climate Change Initiative
    • Emergency Refugee and Migration Assistance
    • Complex Crises Fund
    • The Budget also eliminates direct appropriations to small organizations that receive funding from other sources and can continue to operate without direct Federal funds, such as the East-West Center, but no other specific programs are mentioned.
  • Reduces funding for the Department of State’s Educational and Cultural Exchange (ECE) Programs.
  •  Cuts $650 million from multilateral development banks, including the World Bank.

 —

Transportation

DOT would be cut by 13% or $2.4 billion to $16.2 billion. Most notably this budget would initiate a multi-year reauthorization proposal to shift the air traffic control function of the Federal Aviation Administration to an independent, non-governmental organization.

  • Eliminates:
    •  Essential Air Service (EAS) program
    • TIGER Grants because they are unauthorized

— 

Treasury

Treasury is cut by 4.1% to $12.1 billion.

  • Cuts IRS by $239 million and presumes to make everyone e-file.
  • Eliminates
    • Community Development Financial Institutions (CDFI) Fund grants
  • Cuts duplicative staff.

 —

Veterans Affairs

The VA gets a 6% increase to $78.9 billion.

  • $4.6 billion increase in discretionary funding for VA health care
  • Extends and funds the Veterans Choice Program

 —

EPA

The EPA is cut by 31% or $2.6 billion to $5.7 billion including eliminating 3,200 of the EPA workforce.

  • $2.3 billion for the State Revolving Funds, which is a $4 million increase.
  • $20 million for the Water Infrastructure Finance and Innovation Act program.
  •  Reins in Superfund administrative costs and emphasizes efficiency efforts by funding the Hazardous Substance Superfund Account.
  •  Eliminates, (not wholly inclusive):
    • Funding for the Clean Power Plan
    • International climate change programs
    • Climate change research and partnership programs (presumed to be EPA STAR grants)
    • Great Lakes Restoration Initiative, the Chesapeake Bay, and other geographic programs.
    • Energy Star Program
    • Targeted Airshed Grants
    • Endocrine Disruptor Screening Program
    • Infrastructure assistance to Alaska Native Villages and the Mexico Border
  • Reduces EPA’s Office of Enforcement and Compliance Assurance budget to $419 million, which is a $129 million cut.
  • Cuts Categorical Grants by $82 million to $597 million.

 —

NASA

NASA has a .8% decrease to $19.1 billion.

  • Eliminates for Earth Sciences missions (PACE, OCO-3, DSCOVR, Earth-viewing instruments, and CLARREO Pathfinder)
  • Reduces funding for Earth science research grants to an unknown amount.
  • Eliminates the Office of Education, which includes NASA Space Grant 

—

Small Business

SBA is cut by 5% to $826.5 million. Cuts PRIME technical assistance grants, Regional Innovation Clusters, and Growth Accelerators. Maintains $28 million in microloan financing and technical assistance to help serve, strengthen, and sustain the smallest of small businesses and startups.

 

Specific Programs Cited for Elimination:

  • African Development Foundation
  • Appalachian Regional Commission
  • Chemical Safety Board
  • Choice Neighborhoods (HUD)
  • Community Development Block Grant (CDBG) at HUD
  • Community Development Financial Institutions (CDFI) Fund grants (Treasury)
  • Community Services Block Grant (CSBG) at HHS
  • Corporation for National and Community Service
  • Corporation for Public Broadcasting
  • Delta Regional Authority
  • Denali Commission
  • DOE’s ARPA-E
  • Economic Development Administration
  • ED’s Supporting Effective Instruction State Grants
  • ED’s 21st Century Community Learning Centers
  • ED’s Supplemental Educational Opportunity Grant
  • ED’s International Aid Programs
  • ED’s Striving Readers
  • ED’s Teacher Quality Partnership
  • ED’s Impact Aid Support Payments
  • EPA change research and partnership programs (presumed to be EPA STAR grants)
  • EPA Great Lakes Restoration Initiative, the Chesapeake Bay, and other geographic programs.
  • EPA Energy Star program
  • EPA Targeted Airshed Grants
  • EPA Endocrine Disruptor Screening Program
  • EPA infrastructure assistance to Alaska Native Villages and the Mexico Border
  • HHS’s health professions and nursing training programs (presumably Title VII and Title VIII)
  • HUD’s HOME Investment Partnerships Program
  • HUD’s Section 4 Capacity Building for Community Development and Affordable Housing
  • HUD’s Self-help Homeownership Opportunity Program
  • Institute of Museum and Library Services
  • Inter-American Foundation
  • U.S. Trade and Development Agency
  • Legal Services Corporation
  • Low Income Home Energy Assistance Program (LIHEAP)
  • Manufacturing Extension Partnership (MEP) program
  • Minority Business Development Agency
  • National Endowment for the Arts
  • National Endowment for the Humanities
  • NASA Office of Education, including NASA Space Grant
  • Neighborhood Reinvestment Corporation
  • Northern Border Regional Commission
  • Occupational Safety and Health Administration’s training grants
  • Overseas Private Investment Corporation
  • State Criminal Alien Assistance Program
  • Labor’s Senior Community Service Employment Program (SCSEP)
  • Transportation’s Essential Air Service (EAS) program
  • USDOT  TIGER Grants
  • United States Institute of Peace
  • United States Interagency Council on Homelessness
  • USDA Water and Wastewater loan and grant program
  • USDA McGovern-Dole International Food for Education program
  • USDA Rural Business and Cooperative Service, reduces discretionary activities
  • Woodrow Wilson International Center for Scholars

 

 

 

Sessions to Recuse Himself from Potential Russia Investigations

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Responding to charges that he may have potentially misled Congress during his confirmation hearing, Attorney General Jeff Sessions announced March 2 that he will recuse himself from any potential Justice Department investigations into Russian interference in the November presidential election.

During his press conference, he stated that he responded correctly to the hearing question about possible contacts with Russian officials during the campaign and noted that he met with the Russian ambassador and ambassadors from other nations in his capacity as a Senator, not an official from the Trump campaign. At the same time, the Attorney General stated that, based on the advice of senior Justice Department staff, he will recuse himself from any potential DOJ investigations of Russian involvement in the presidential election.

Administration Regulatory Reform Update

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Last week, White House Chief of Staff, Reince Preibus, issued a memorandum to all executive departments and agencies to freeze new or pending regulations — giving the new Administration time to review them, which is a common practice for any incoming administration.

For any regulations that have yet to be sent for publishing in the Federal Register, the memo asks the agency to not send any regulation to the Federal Register until reviewed by someone selected by the President.

The memo makes an exception for “critical health, safety, financial, or national security matters,” and asks agencies to identify any regulations that can’t be delayed for other reasons.

Recently issued research-centered regulations that could be impacted include:

  • federal policy for the protection of human subjects (Common Rule),
  • Department of Education’s final Rule on open licensing requirements for competitive grant programs, and
  • updates to the Uniform Guidance (including updates to the procurement rule and the micro-purchase threshold).

The Office of Federal Relations will continue to monitor actions coming from the Administration.