Examining the President’s FY2018 Budget Request

 

President Donald Trump has released his budget proposal for FY2018.  As this is his first budget proposal while in office, it is a smaller “blueprint” document, delivering the “skinny” budget that has been previewed in recent weeks.  A full budget proposal is expected in May. Overall, the President’s request reflects $1.151 trillion in discretionary spending, a decrease of $30 billion from Fiscal Year 2017 levels enacted under the current Continuing Resolution. While the President’s budget is a document of recommendations to Congress, the Appropriations Committees and the Congress will have the ultimate say on how appropriations legislation for FY2018 moves forward.

The budget proposes a $54 billion increase in defense spending, offset by $54 billion in cuts to non-defense discretionary spending. Furthermore, the budget proposes a budget of $69 billion for the Department of Health and Human Services, a cut of $15.1 billion (-17.9 percent) from the Fiscal Year 2017 level.

The President’s budget focuses closely on a handful of specific priorities, as it reflects a greater focus on areas that were priorities during his campaign – notably increases in spending for defense and the military, immigration enforcement, and funding for law enforcement. In addition, the bill cuts foreign aid and numerous non-defense discretionary domestic programs. On healthcare, the proposal does not include specific proposals that were a part of the President’s campaign, such as negotiating drug prices or other policies related to repealing and replacing the Affordable Care Act.

Here is a compilation of the main Health and Human Services priorities of the budget, broken down by issue.

NOTABLE PRIORITIES

Food and Drug Administration

  • 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. To complement the increase in medical product user fees, the Budget includes a package of administrative actions designed to achieve regulatory efficiency and speed the development of safe and effective medical products. In a constrained budget environment, industries that benefit from FDA’s approval can and should pay for their share.

21st Century CURES Act

  • $1 billion, outside of discretionary funding levels. – The 21st Century CURES Act permitted funds to be appropriated each year for certain activities outside of the discretionary caps so long as the appropriations were specifically provided for the authorized purposes.

Direct Health Care Services

  • Supports direct health care services, such as those delivered by community health centers, Ryan White HIV/AIDS providers, and the Indian Health Service. These safety net providers deliver critical health care services to low-income and vulnerable populations.

Substance Abuse

  • Supports substance abuse treatment services for the millions of Americans struggling with substance abuse disorders. The opioid epidemic, which took more than 33,000 lives in calendar year 2015, has a devastating effect on America’s families and communities. In addition to funding Substance Abuse and Mental Health Services Administration substance abuse treatment activities, the Budget also includes a $500 million increase above 2016 enacted levels to expand opioid misuse prevention efforts and to increase access to treatment and recovery services to help Americans who are misusing opioids get the help they need.

Program Integrity

  • Strengthens the integrity and sustainability of Medicare and Medicaid by investing in activities to prevent fraud, waste, and abuse and promote high quality and efficient health care. Additional funding for the Health Care Fraud and Abuse Control (HCFAC) program has allowed the Centers for Medicare & Medicaid Services in recent years to shift away from a “pay-and-chase” model toward identifying and preventing fraudulent or improper payments from being paid in the first place. The return on investment for the HCFAC account was $5 returned for every $1 expended from 2014-2016. The Budget proposes HCFAC discretionary funding of $751 million in 2018, which is $70 million higher than the 2017 annualized CR level.

Mental Health

  • Invests in mental health activities that are awarded to high-performing entities and focus on high priority areas, such as suicide prevention, serious mental illness, and children’s mental health.

Emergency Preparedness

  • Reforms key public health, emergency preparedness, and prevention programs. For example, the Budget restructures similar HHS preparedness grants to reduce overlap and administrative costs and directs resources to States with the greatest need. The Budget also creates a new Federal Emergency Response Fund to rapidly respond to public health outbreaks, such as Zika Virus Disease. The Budget also reforms the Centers for Disease Control and Prevention through a new $500 million block grant to increase State flexibility and focus on the leading public health challenges specific to each State.
BUDGET CUTS

National Institutes of Health

  • Reduces the National Institutes of Health’s (NIH) spending relative to the 2017 annualized CR level by $5.8 billion to $25.9 billion. The Budget includes a major reorganization of NIH’s Institutes and Centers to help focus resources on the highest priority research and training activities, including: eliminating the Fogarty International Center; consolidating the Agency for Healthcare Research and Quality within NIH; and other consolidations and structural changes across NIH organizations and activities. The Budget also reduces administrative costs and rebalance Federal contributions to research funding.

Health Workforce Development

  • Eliminates $403 million in health professions and nursing training programs, which lack evidence that they significantly improve the Nation’s health workforce. The Budget continues to fund health workforce activities that provide scholarships and loan repayments in exchange for service in areas of the United States where there is a shortage of health professionals.

Social Services

  • Eliminates the discretionary programs within the Office of Community Services, including the Low Income Home Energy Assistance Program (LIHEAP) and the Community Services Block Grant (CSBG), a savings of $4.2 billion from the 2017 annualized CR level. Compared to other income support programs that serve similar populations, LIHEAP is a lower-impact program and is unable to demonstrate strong performance outcomes. CSBG funds services that are duplicative of other Federal programs, such as emergency food assistance and employment services, and is also a limited-impact program.