Trump Budget Seeks Massive Non-Defense Cuts, But Congress Will Have its Say

By Daniel Sheehan
AFOP Executive Director

The White House has announced the overall discretionary appropriations totals President Trump plans to include in his first budget request (for fiscal year 2018) later this year. The president will propose an immediate nine-percent increase in defense spending to $603 billion, offset by an aggregate 11-percent decrease in non-defense appropriations to $462 billion.  White House Budget Director Mick Mulvaney said the $54 billion increase in defense spending is one of the largest increases in history, and that cuts to the topline non-defense number will be the largest proposed reduction since the early years of the Reagan Administration.

Before this plan can go into effect, Congress must first adjust the annual statutory caps on discretionary appropriations (enacted in the Budget Control Act (BCA) of 2011) prior to enactment of the yearly appropriations bills.  Unless the spending caps are amended, another round of across-the-board sequestration cuts will automatically be ordered and will reduce defense spending back to the spending cap levels.  The caps – one for defense and the other for all other discretionary spending – are already scheduled to decrease in 2018 by a combined $5.2 billion below the 2017 levels, as required by BCA. The aggregate cut in non-defense discretionary spending under the Trump plan, measured versus the FY 2017 cap level (by which the pending 2017 appropriations bills must abide) would be a reduction of about 11 percent in total. 

However, DOL may see a different level of spending reductions.  A senior Republican appropriator is quoted as saying that everyone knows that Congress is never going to cut Homeland Security and Veterans Affairs (indeed, President Trump has indicated that veterans funding may actually be increased), so you have to back those programs out of any assumptions of aggregate cuts in non-defense spending in order to determine the overall level of cuts in other non-defense programs. After Homeland and Veterans are held harmless, the aggregate cuts to the remainder of non-defense spending get even worse, to a reported total reduction of 14.1 percent. 

Congressional Democrats are certain to oppose these massive spending reductions, but some Republicans, particularly those on the House and Senate Appropriations Committees, will oppose them, too.  After all, they are the ones who have to try to write bills that can get enough votes to pass each chamber.  In addition, Republicans on the various authorizing committees that oversee federal agencies may not like the proposed cuts either.

The way the traditional budget process is supposed to work is like this:

  1. The president submits a budget request, ideally in early February, but new presidents in their first year get a grace period.
  2. The House and Senate take the president’s overall spending and tax totals and priorities into consideration, then pass a congressional budget resolution that sets the spending and tax totals that will govern which bills can be considered in Congress for the remainder of the year. This resolution also gives the Appropriations Committees one big lump sum of money to spend in the upcoming year, which they subdivide as they see fit.
  3. The Appropriations Committees write their annual spending bills.

 The BCA spending caps complicate the traditional process. No matter what discretionary spending levels the president proposes in his budget, and no matter what lump sum the congressional budget resolution gives to the Appropriations Committees, if total defense appropriations for the year exceed the BCA cap level, another round of sequestration is ordered to reduce defense spending back to the cap level. Similarly, if total non-defense spending exceeds the cap level, sequestration automatically cuts it back.

The $54 billion increase in defense spending proposed by the White House will not be possible unless Congress first amends the Budget Control Act to fix the spending caps.  And the $54 billion in non-defense spending cuts proposed by the White House, even if enacted into law, can’t be used to offset the defense spending increase unless Congress first amends the BCA to fix the caps.  

So the big issue for FY18, obviously, is the fate of legislation to amend the spending caps.  Any legislation changing the spending cap levels will have to get 60 votes in the Senate (unless Senate Republicans decide to invoke the “nuclear option” and get rid of the filibuster as it pertains to legislation).  Indeed, it is hard to imagine eight Democratic senators voting to break a filibuster or waiving points of order to approve a $54 billion cut in non-defense spending, even if it does offset a $54 billion increase in defense spending.  And such a high level of non-defense cuts would probably lose a handful of Republican Senate votes, as well.

In the absence of agreement on a law amending the spending caps, either bipartisan or partisan, the levels written into current law would remain in place, which would mean a $3.2 billion cut in total non-defense discretionary spending in 2018 (compared to 2017) instead of the president’s proposed $54 billion cut.  A much better, but still painful scenario.

CBO Paints a Bleak Picture for Future Non-Defense Spending

By Daniel Sheehan
AFOP Executive Director

On January 24, the nonpartisan Congressional Budget Office (CBO) released its annual Budget and Economic Outlook covering the ongoing fiscal year 2017 and the ten-year 2018-2027 period and painting a very bleak picture for future spending.  While I appreciate that budget matters can be a little technical and dry, I encourage you to read on so you can understand the fiscal realities facing federal decision-makers.

Of the big picture, CBO economists are said to be projecting real economic growth to stay just below two percent per year for the next decade, limiting how much federal tax receipts will grow.  Inflation will also stay at about two percent per year, but rising interest rates will increase federal spending on debt interest significantly.  The persistent structural imbalance between what the federal brings in and what it spends will mean ballooning federal deficits. CBO projects the deficit in the current fiscal year 2017 to be $559 billion; however, the office says the deficit will breach the trillion-dollar threshold as soon as FY 2023, reaching $1.4 trillion in 2027.  The ten-year cumulative deficits over the 2018-2027 period are projected to total $9.4 trillion.  When these deficits are added to the cost of federal loan programs also financed by federal borrowing, CBO projects that the public debt held will rise by $10.1 trillion over the next decade, reaching $24.9 trillion at the end of 2027.  That amount would equal 89 percent of one year’s Gross Domestic Product (GDP).

Compounding matters is what budget analysts have predicted for decades: an aging population drives mandatory entitlement costs (like Social Security, Medicare, and Medicaid) higher and higher, while the 2011 Budget Control Act (BCA) constrains discretionary spending for the time being (and rising entitlement and net interest costs “crowd out” discretionary spending later on down the line).  This is not just a macro level concern, because almost all federal spending on the workforce system is classified as “non-defense discretionary.”

The news is particularly bad for non-defense discretionary spending in the upcoming fiscal year 2018.  BCA placed legally binding annual caps on total defense and non-defense discretionary appropriations.  If Congress enacts appropriations bills that exceed the cap levels, another round of budget sequestration must occur to reduce all spending down to the cap levels.

You will recall that, back in 2012, the “Super Committee” (Joint Committee on Deficit Reduction) failed to agree on a deficit reduction plan, triggering a dramatic reduction in spending caps.  Since then, two-year budget deals in 2013 (covering fiscal years 2014-2015) and 2015 (covering fiscal years 2016-2017) have raised the caps for those years in exchange for reduced spending in other areas down the road.  As a result, however, the cap levels for 2018 are now lower, in nominal dollars, than the 2017 levels.  The defense cap drops by $2.0 billion and the non-defense cap drops by $2.9 billion.

The CBO baseline for discretionary spending assumes the previous year’s appropriations plus an across-the-board inflation adjustment.  (This year, it is two percent).  Baseline appropriations levels for fiscal year 2018 are $53.1 billion above the combined cap levels ($13.5 billion on defense and $39.6 billion on non-defense).  Even if you give fiscal year 2018 non-defense appropriations a hard freeze at the fiscal year 2017 levels (which are based on the ongoing continuing resolution, which is a hard freeze at the fiscal year 2016 levels for NFJP and most other U.S. Department of Labor programs), total non-defense appropriations would still be about $11 billion over the fiscal year 2018 spending cap, forcing another round of sequestration.  The new president has discussed increasing defense spending above current levels and decreasing non-defense spending, but any cap changes would have to be implemented through legislation requiring at least 60 votes in the Senate for approval.

While budget problems pose, admittedly, very difficult challenges, Congress and the White House must and soon find a way to forge a bipartisan budget plan to preserve the BCA’s equal treatment of defense and non-defense discretionary spending, provide reasonable cap relief, and make the necessary long-term fiscal fixes to sustain adequate investments in the nation’s infrastructure and its people.  These are the realities our leaders face, and these are the challenges they must overcome.

Diego Brito Named FCDP Participant of the Year

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Left to right is Gloria Spradley-Brown, Bureau Chief, Bureau of Grants Administration and Compliance, Florida Department of Education; Diego Brita, FCDP Participant of the Year; Jim Haugli, State Director, FCDP; and Carol Heard, Site Coordinator, Orange County FCDP Program Site.

Story from Jim Haugli, State Director of Florida’s Farmworker Career Development Program 

Diego Brito enrolled in the Orange County Farmworker Career Development Program (FCDP) on January 12, 2015.  He came from Mexico as a young boy and is the only sibling to graduate high school and to continue his education.  Diego has four much older brothers and one younger than himself.

Diego contacted the FCDP office and made an appointment to come in.  The office expedited his paperwork and he was approved for the program.  Diego went home and shared the good news with his mother.  She knew that not having Diego’s current salary would put a hardship on her family financially,  but she saw the excitement in his eyes and told him, “If this is really what you want then do it…..do something better with your life son.”

Diego exhibits all the qualities of a great employee. He has a passion for learning and creating great works of welding art.  He helps his peers and mentors new students. Throughout his tenure in class, he had the opportunity to build many projects.  He chose to use this new found knowledge of welding and welding art sculpting at METAL MORPHISIS, a business located in Winter Garden, Florida.

Diego’s welding practice was real-world which made his daily practice in welding realistic and challenging. Diego welcomes constructive criticism when other students would become defensive.  He felt it was a way to fine tune his knowledge and skills in welding fabrication. Diego often said, “You cannot go to the store and buy a bag of knowledge or experience.  It has to be earned by practicing every day.”

After completing the welding program at Westside Tech, Diego started working at Metal Morphisis, LLC as a welder making $12.50 an hour.  After 2 months his pay was raised to $14.00 an hour.  This is very rare for a student fresh out of class (a greenhorn) to earn these frequent pay raises.  Diego wants to continue working during the day and attend Seminole State College at night to earn his degree in Business Management.  His dream is to open his own welding company someday.

His instructor said, “Diego is one of the many talented and structured students to attend my program at Westside Campus. His eagerness to learn and love for the trade of welding will make him successful and take him to new boundaries with great rewards.”

Diego said, “Every step of my welding career has been a personal achievement.  If it wasn’t for programs like the Farmworkers Program I don’t know where I would be today.   I’m living proof the program does work.”

Diego was chosen as the Florida Farmworker Career Development Program Participant of the Year. He was honored at the FCDP Annual Conference in August in Orlando.

Farmworker Becomes Artist, Education Leader, Champion for Change

Story from California Human Development

chd-jobs-overview_092315_07-e1446217764815When Frances Ortiz-Chavéz was a teenager, she spent her summers picking California’s peaches and tomatoes. Today, she uses her hands for more delicate work, but the impact of her time spent in the fields remains—and speaks clearly—through the art she creates. ‘From the first day I walked into an all English-speaking classroom, I turned to art as a way to express my deepest feelings and a way to fit in,” says Ortiz-Chavéz.

Born in Mexico, Francisca (Frances) and her family immigrated to Arizona when she was 10 years old. She became “Frances” when her teacher declared that “Francisca“ was too difficult to say. But, despite language and cultural challenges, Frances did well in school. She graduated with her class but found few options in Arizona and decided to move to Napa to be with her sister. Little did she know her life was about to change course dramatically.

“It was 1973, I was living at my sister’s home on Soscol Avenue and I needed work badly,” says Frances. “Everyone kept telling me to just walk two houses down to Aurelio Hurtado’s office. So I did, and that was the beginning of great things for me!”

A leading activist for farmworker rights, Sr. Aurelio Hurtado is the co-founder of California Human Development (CHD), a non-profit dedicated to assisting farmworkers and others of low income. He arranged a full-time job for Frances at the Veterans Hospital In Yountville.

“CHD paid my salary for the first few months and that got me going,” says Frances. “I credit Aurelio and CHD for setting me on a powerful and positive course.”

From the Veterans Hospital, Frances went on work as a Bilingual Instructional Assistant and school secretary with Napa Valley School District—a job Aurelio also helped to arrange. In 2003, she was appointed to the school board of the Napa Valley Union School District and has run unopposed every term since. In 2007, she opened Puertas Abiertas Community Resource Center in Napa and served as center director for six years. Most recently, Frances helped co-found and is the current co-chair of the Napa Valley Latino Heritage Committee.

“Sr. Aurelio was a pioneer; he inspired me to bring the Latino voice to the forefront and to work for social justice in our schools and our community. I’m proud to be able to follow in his footsteps,” she says.

Frances also never gave up her art; she continues to create beautiful and powerful work depicting the Latino experience.

Trump Wins Presidency

From Daniel Sheehan, AFOP Executive Director
November 15, 2016

In a surprise to many pollsters and pundits, and much of the general public, businessman Donald J. Trump on November 8 won the 2016 presidential election and is now moving forward with this transition team as president-elect to set up a new government.  AFOP wishes him and the new administration well in their efforts to work for the public good in behalf of all in this great nation of ours.

Many in the anti-poverty community are understandably worried about what a Trump Administration will mean for their work in supporting the very poorest among us, given some of the president-elect’s more strident rhetoric on the campaign trail.  With the White House, United States Senate, and United States House of Representatives now under Republican control for the first time in more than a decade, these service-providers are concerned that Congress, with the White House’s blessing, will make drastic cuts in domestic spending to pay for large increases in defense.  While that remains to be seen, these anti-poverty groups have vowed to defend the programs and the funding they feel are the very fabric of the nation’s safety net.

In regard to the highly successful and critically needed National Farmworker Jobs Program (NFJP), there is really no telling at this point what the change in administrations will mean going forward.  While it is true that NFJP, year in and year out, exceeds the United States Department of Labor’s national program performance goals, providing life-changing training and related assistance to some of the hardest to reach and hardest to serve in America, and while it is also true that the 2014 Workforce Innovation and Opportunity Act lengthened the NFJP grant term to four years, one must understand that these new, longer grant awards are subject to the future availability of appropriated funds.  NFJP’s fiscal year 2016 appropriations are in place through June 30, 2017, but Congress has not yet finalized fiscal year 2017 spending, and now may not until after President-elect Trump’s inauguration.  Should the president-elect seek to eliminate NFJP funding, we at the Association of Farmworker Opportunity Programs (AFOP), the non-profit organizations and state entities that deliver NFJP services to migrant and seasonal farmworkers, must make a concerted effort to educate policymakers about the importance of the program, its tremendous reach throughout the country, and why it is necessary to sustain the nation’s commitment to assisting farmworkers and their families earn more stable and secure employment, both inside and outside of agriculture.  NFJP service-providers have mounted such an effort before, and are ready to do so again.

A request by the new administration to zero out NFJP is far from a given, however.  The president-elect has expressed support for the idea of job training for individuals to meet the unmet demand of employers for qualified workers.  Also, the president-elect, who prides himself on having created thousands of jobs as a businessman, has sworn to be “the greatest jobs president that God ever created.”  During a September campaign speech, he said he has a plan to add 25 million jobs to the market over the next 10 years.  While he included few specifics at the time, he did say he would replace “bureaucrats who ‘only know how to kill jobs’ with ‘jobs-creation experts.’”  In addition, the idea of generating and filling more jobs shares bipartisan support.  According to the Gallup’s Election Benchmark Survey, 88 percent of Democrat-leaning voters and 80 percent of Republican-leaning voters call the issue of above average importance, a fact that both sides of the aisle seem to appreciate.

Lastly, we can be heartened by the fact that the president-elect sounded a unifying tone in his victory speech in the early morning hours of November 9.  It is my very real hope that, with the election now behind us, the president-elect is sincere in his remarks.

“Now it’s time for America to bind the wounds of division, we have to get together. To all Republicans and Democrats and independents across this nation, I say, it is time for us to come together as one united people,” Trump said.  “I pledge to every citizen of our land that I will be president for all Americans, and this is so important to me.”

“For those who have chosen not to support me in the past, of which there were a few people, I’m reaching out to you,” Trump said.  “For your guidance and your help, so that we can work together and unify our great country.”

In closing, please take time to review an easy-to-read primer on how the federal budget process works, linked here, as produced by the Center on Budget and Policy Priorities.  It provides all the necessary information needed to understand and follow the federal budget process during what is certain to be a changed and challenging year.

PPEP’s Dr. John Arnold Receives Prestigious Award from the Mexican Government

John David Arnold PhD, the CEO and Founder of Portable Practical Educational Preparation, Inc., has been selected as a 2016 recipient of the Reconocimiento Ohtli Award, one of the highest awards given by the Government of Mexico.

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The Ohtli Award was conceived to recognize and honor Mexican, Mexican-American or Latino leaders whose efforts have contributed significantly to the wellbeing, prosperity and empowerment of Mexican communities abroad. Ohtli is a Nahuatl word that means “pathway,” or camino in Spanish. The Institute for Mexicans Abroad, part of the Secretariat of Foreign Affairs of Mexico, annually grants the Ohtli Award, which consists of a medal, a silver rosette, and a diploma. This acknowledgment honors people who have dedicated most of their lives and career to “blazing a trail” abroad for younger generations of Mexicans and Mexican-Americans as they strive to achieve their dreams.

“Estimados; With great humility and gratitude to the Government of Mexico for nominating me for the prestigious award known as Reconocimiento Ohtli. It recognizes the exceptional life achievements of individuals dedicated to service to the community. Especially to those nationals living and working here. It is a very special moment for me. As a child I lived, and was schooled in Guadalajara, Jalisco, Mexico . I know first hand how it is to live in a foreign country. A new language, culture, and customs. However, I am very indebted to that experience. Had it not happened my life’s pathway would have been very different. Most of all, I would not have this opportunity to thank each and everyone of you that helped me along the way. Making possible all that we have accomplished together. The best way to sum it up is the words of Cesar Chavez; Si Se Puede. Because of him and all of you, together say Si Se Pudo!, Si Se Podra! Gracias!”

The induction and award ceremony will be held on September 18th at 7:30 pm at the Casino Del Sol Amphitheater in Tucson, AZ. For further information, please contact Connie Martinez at (520) 591-5600

PathStone PA Receives CAAP Distinguished Service Award

From the PathStone Messenger (August 2016)

PathStone is recognized for exceptional advocacy and leadership efforts on behalf of anti-poverty and community development programs. PathStone’s advocacy efforts directly impact policy, regulation, and legislative agendas that complement Community Action Association of Pennsylvania’s mission and goals.

PathStone Pennsylvania provides services to migrant and seasonal farmworker families, TANF recipients, ex-offenders, mature workers, children, youth, and other disadvantaged populations. PathStone provides training and employment services, child and family development services, and housing services directed at assisting those participants.

This year alone PathStone advocated on behalf of migrant and seasonal farmworkers, and ex-offender training programs at the federal level. Migrant Head Start and Regional Head Start Programs also at the federal level, TANF and CSBG funding at the state level and low income housing within local communities in Chester and Lehigh County.

PathStone Training and Employment staff worked diligently at the national level with the Association for Farmworker Opportunity Programs (AFOP) and the National Association for Workforce Development Professionals (NAWDP) to assure training programs allow for the upward mobility of the unemployed, underemployed and dislocated workers. Our very own, Nita D’Agostino sits on the Board of Directors for the AFOP and has played a vital role in the success of PathStone Pennsylvania and was recently featured in the NAWDP Advantage Publication!