By Lewis-Burke Associates LLC
On May 28, 2021, President Biden released the full details of his first budget proposal to Congress. Unrestrained by legally-imposed budget caps for the first time in a decade, President Biden proposed an 18 percent boost in discretionary spending for a total of $1.522 trillion. President Biden’s top fiscal year (FY) 2022 budget priorities include public health, climate and clean energy, innovation, and education. This is a sharp contrast from the Trump Administration, which prioritized defense spending and proposed major cuts to other domestic programs. President Biden’s proposal would provide $769 billion in non-defense spending—a $123 billion increase or 16 percent increase over the FY 2021 enacted level. In contrast, the proposal would provide $753 billion for defense spending—a $13 billion or 1.7 percent increase over the FY 2021 enacted level. This would be the first time in more than a decade that non-defense spending would exceed defense spending.
Overall, the budget proposal would significantly increase funding for research and development, education, and healthcare programs. Some proposals require new agencies to be created, which will be a bigger lift in a narrowly divided Congress. Other proposed increases (e.g., the National Science Foundation) are consistent with existing legislation to invest in R&D for national competitiveness. Additional notable agencies proposed changes important to HFES include:
- National Institutes of Health (NIH) at $52 billion in FY 2022, an increase of $9 billion, or 21 percent, above the FY 2021 enacted level.
- $6.5 billion is included to establish the Advanced Research Projects Agency for Health (ARPA-H).
- National Sciences Foundation (NSF) at $10.17 billion in FY 2022, a 19.8 percent or $1.66 billion increase above the FY 2021 enacted level.
- Department of Education (ED) at $102.8 billion, a 41% increase above the FY 2021 enacted level.
- National Aeronautics and Space Administration (NASA) at $24.8 billion, an increase of $1.5 billion or 6.6 percent above the FY 2021 enacted level.
- Within the Department of Health and Human Services (HHS), level funding for the National Institute for Occupational Safety and Health (NIOSH) at $345 million and a $42 million (12.4 percent) increase for the Agency for Healthcare Research and Quality (AHRQ).
- A reduction of $2.1 billion (12.7 percent) to the Science & Technology accounts at the Department of Defense (DOD).
While it is ultimately up to Congress to decide which proposals to embrace, modify, or reject as part of the annual appropriations process, Congress has been waiting on the new Administration to provide more information on its major political priorities and new funding initiatives. The release of the FY 2022 budget request formally kicks off the congressional appropriations process, but the timing of passing final FY 2022 appropriations remains uncertain and the late start to the appropriations process increases the likelihood of a stop gap funding measure, known as a Continuing Resolution, to avoid a government shutdown and continue to fund federal agencies beyond September 30—the end of FY 2021.
In addition to $1.5 trillion in discretionary spending, the budget request also proposes $2.3 trillion for infrastructure consistent with the American Jobs Plan and $1.8 trillion for health care, education, and childcare consistent with the American Families Plan—for a total of $6 trillion if enacted by Congress. A separate funding package or a series of funding packages would be needed beyond annual appropriations bills to fund these additional infrastructure and social programs. To offset some of these costs, the Biden Administration proposes generating $3.5 trillion in revenue over the next decade through significant changes to U.S. tax policy and the repeal of several provisions in the Tax Cuts and Jobs Act of 2017. The partial offset would come from, among other things, increasing the corporate tax rate from 21 percent to 28 percent, taxing corporate offshore earnings, and increasing tax rates for high-income earners.
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