Proposal released on heels of two-year budget deal signed into law by president on Friday; unlikely to have much impact
President Trump today released his budget proposal for FY 2019, the opening shot in the annual federal budget process. The $4.4 trillion plan, which includes his long-awaited infrastructure plan and funding for a wall along the U.S.-Mexico border, cuts entitlement programs by $1.7 trillion, including federal student aid programs and research funding.
Among other proposals, the budget would eliminate the Supplemental Educational Opportunity Grant program, cut Federal Work-Study nearly in half, consolidate TRIO and GEAR UP and significantly cut their overall funding. In addition, it proposes to cut nearly $203 billion from student loan programs. However, the budget would expand Pell Grant eligibility to short-term workforce programs, a request that also was included in the House GOP’s Higher Education Act reauthorization bill, the PROSPER Act.
Similar to the president’s FY 2018 budget request, the FY 2019 request also includes cuts to science and research agencies. The National Institutes of Health (NIH) would be funded at $33 billion, a decrease of $1 billion below FY 2017. The budget request does not include any changes or caps on indirect costs, which had been proposed in the FY 2018 budget request. However, it would cap the amount of salaries (to 90 percent) and compensation allowed under NIH grants. The National Science Foundation (NSF) would be level funded at $7.47 billion.
The budget would eliminate the National Endowment for Humanities, an elimination that the president first proposed in his FY 2018 budget request but was rejected by Senate appropriators.
Immigration is a steady theme throughout the proposed budget: The president is requesting $18 billion for his border wall and $200 billion for the infrastructure proposal unveiled alongside the budget. The proposal also includes $782 million to hire 2,750 new border and immigration officers, and $2.7 billion to detain people in the country illegally. These provisions likely will be key in the ongoing legislative battle over the Obama-era Deferred Action for Childhood Arrivals (DACA) policy and Dreamers, which the Senate started working on today.
Budget director Mick Mulvaney said Sunday that the request “assumes there will be agreement on how to handle the legal status of young undocumented immigrants covered under the Deferred Action for Childhood Arrivals program,” Politico reported last night.
Congress Passes Two-Year Budget Deal That Will Supersede Trump Request
The president’s budget is unlikely to gain any traction on Capitol Hill, this year even more than usual. And Congress passed its own spending bill on Friday that includes a two-year budget, which makes the president’s proposal largely a non-starter. President Trump signed that measure later that day.
The two-year deal circumvents the strict budget caps imposed under a 2011 budget deal and adds $57 billion in new spending to non-defense accounts through FY 2019. The actual amounts to be spent on individual programs and agencies—like Pell Grants, NIH, and NSF—have not yet been determined, but the measure makes it clear that spending will increase for NIH and federal student financial aid.
The measure also includes a one-year extension of the above-the-line deduction for qualified tuition and related expenses (tuition deduction) retroactive for 2017, which had expired in 2016. The tuition deduction helps reduce the cost of college by allowing students or their parents to deduct up to $4,000 in eligible higher education expenses from their taxable income. It is particularly important to graduate students, who are ineligible for the American Opportunity Tax Credit.