2020 budget – USA Gov Policy

Congress returns to session this week, The House on September 9, The Senate on September 30.

With the Presidential election season rapidly moving ahead, expect political maneuvering to be even more vigorous than usual.

Two top issues the Democrats were relying on to gain votes have fallen flat. The entire “Russian Collusion” charge has been proven false, and has boomeranged against those who asserted it. The reality that key current and former members of the FBI and the CIA, allied with the Clinton campaign, conspired to alter an election and its aftermath is slowly sinking in to the public consciousness. Similarly, in a bid to secure female votes, various sexist-type charges levied against Supreme Court nominee Brett Kavanaugh turned out to be incorrect.

Democrats will now concentrate on gun control and environmental matters. In the wake of several mass shootings, sentiment to enact measures such as enhanced background checks will be a very visible factor in coming legislative discussions. Whether those measures will have any real-world impact is questionable.

The American Bar Association has emphasized education concerns: the “What You Can Do For Your Country Act (S.1203/H.R.2241 would allow borrowers of all federal loans to qualify for Public Service Loan Forgiveness, as well as borrowers enrolled in any federal repayment plan. The Paycheck Fairness Act would ban employers from asking job candidates about their salaries at previous jobs.

There is a growing interest in allowing greater access to protecting and expanding access to retirement savings. Lorie Konish, writing for CNBC notes: “ Congress…will have a slew of proposals to consider, including some that could have a big impact on your retirement. New proposals aim to fix legacy issues by expanding access to retirement savings, making Social Security solvent and protecting income in multi-employer pensions… The Secure Act… includes measures to allow small employers to band together to offer 401(k) plans, give part-time workers access to retirement plans, take away the 70½ age limit for individual retirement account contributions and raise the age for required minimum distributions to 72, from 70½. It also would expand the inclusion of annuities in 401(k) plans and put a 10-year time limit on how long non-spouse beneficiaries can stretch out an inherited IRA.

Other measures seek to ensure the solvency of the Social Security fund, and establish health care savings accounts for seniors. Expect more debate over campaign finance and environmental issues.

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Wrangling over the 2020 budget will be central to the Fall session.

Back in March, the White House submitted its $4.746 trillion budget proposal, which the Democrat-majority house declared “dead on arrival.” The major flash point was, and continues to be, the President’s push for more funds to extend the southern border wall, needed to stem the vast influx of illegal immigration. According to The Hill, “House Democrats have already pledged to oppose any push by the administration to loosen restrictions on border barrier funding. Border money as well as related spending like Immigration and Customs Enforcement are expected to be the two biggest hurdles to getting a spending deal.”

The Administration also seeks to increase defense spending. During the Obama years, as the U.S. cut Pentagon funding, both China and Russia committed significant additional monies to their militaries, and both Iran and North Korea moved ahead on their nuclear programs. One could say that Washington “Gave peace a chance,” but it didn’t work. Moscow now possesses the world’s strongest nuclear force, replete with new weapons. China now has a superpower-class military with technology that fully rivals America’s.

Other issues included in the White House budget were measures designed to combat the opioid epidemic; a proposal “to hold institutions of higher education accountable for results by requiring colleges and universities to share a portion of the financial responsibility associated with Federal student loans to encourage them to improve performance,” a move to modernize federal governmental technology,” and a ten percent increase in funds for the care of veterans.

The parties, already far apart on numerous issues, are not expected to reach an agreement before the October 1 deadline. Another “continuing resolution,” lasting until December, will probably prevent a government shutdown.

The White House has released its 2020 proposed Budget, which “lays out the President’s continued vision to drive down deficits by bringing spending below the post-war average while continuing to make investments in critical priorities.” Below, we present the Administration’s brief summary of key points.

2020 BUDGET FACT SHEET

GETTING THE NATION’S FISCAL HOUSE IN ORDER.

Even with high levels of economic growth, excessive deficits continue to threaten our progress, and any unforeseen shocks to the economy could make deficits unsustainable. Deficits matter; ask any family with a credit card. This Budget demonstrates the President’s vision to control Washington spending by prioritizing effective programs, and cutting wasteful or unnecessary uses of taxpayer dollars.

Sticks to the Current Law Discretionary Caps. For nearly a decade, the Budget Control Act of 2011 has imposed caps on discretionary spending. Since discretionary spending is a main driver of the Federal deficit in the near term, capping its growth is critical to securing a sound fiscal future. Congress has enacted three consecutive deals to raise the discretionary spending caps, the most recent of which increased spending levels for fiscal years 2018 and 2019 by nearly $300 billion. This Budget adheres to the spending caps in current law, and provides additional needed defense resources by designating these investments as Overseas Contingency Operations (OCO) funds. This is the only fiscally responsible option to meet national security needs while avoiding yet another unaffordable increase to the spending caps.

Cuts Wasteful Washington Spending. Overall, this Budget includes $2.7 trillion in spending cuts—higher than any other administration in history. As part of these cuts, the Budget meets the President’s directive to reduce nondefense programmatic spending by 5 percent below the higher 2019 cap level. It also proposes an aggressive set of policies to redefine the proper role of the Federal Government and curtail those programs that fail to efficiently and effectively deliver promised outcomes to the American people.

Gets Deficits Under Control. The proposals in this Budget would reduce total deficits from nearly 5 percent of GDP in 2020 to under 1 percent of GDP in 2029. Looking forward, long term policy projections indicate that the proposals in this Budget would put us on track to reach balance by 2034. This is a clear roadmap for a more fiscally responsible future if the Congress chooses to follow it.

CONTINUING INVESTMENTS IN KEY NATIONAL PRIORITIES.

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• Securing our Southern Border and Enforcing our Immigration Laws. The Budget proposes sizable investments in a border wall; border security technology and equipment; funding to hire additional Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) law enforcement officers; and increased capacity to detain and deport illegal aliens. The Budget includes $5.4 billion in high priority investments at the Department of Homeland Security (DHS) in border security technology, infrastructure, and equipment to help CBP prevent, detect, and interdict illegal border crossings. It also includes $3.6 billion in new military construction resources at the Department of Defense to assist DHS in securing and managing the southern border. The Budget continues implementation of the President’s direction to hire 5,000 additional Border Patrol Agents and 10,000 ICE officers and investigators, and proposes $478 million to hire and support 1,750 additional law enforcement officers and agents at CBP and ICE. The Budget also includes $2.7 billion in total funding for 54,000 average daily ICE immigration detention beds.

• Preserving Peace through Strength and Supporting the National Defense Strategy. The Budget includes $750 billion for national defense. Of this total, $718 billion is for the Department of Defense (DOD) to fund the National Defense Strategy’s three lines of effort: rebuilding readiness and lethality; strengthening alliances and partnerships; and improving performance and affordability through reform. The Budget prioritizes strategic competition with China and Russia, while also sustaining efforts to deter and counter rogue regimes such as North Korea and Iran, defeat terrorist threats, and consolidate gains in Iraq and Afghanistan through a resource-sustainable approach.

• Protecting our Veterans. The Budget invests in world-class health care for our Nation’s veterans by including $80.2 billion in discretionary appropriations to fully fund the Department of Veterans Affairs (VA) medical care requirements in 2020. This funding level fully supports implementation of the historic VA MISSION Act of 2018 to provide veterans greater choice on where they receive their health care, whether at a VA facility or through a private health care provider.

• Ending the Opioid Epidemic. The Budget includes $4.8 billion in the Department of Health and Human Services to continue historic investments made in 2019 to combat the opioid epidemic by expanding access to prevention, treatment, recovery support services, and research. The Budget also includes actions that would prevent improper or abusive prescribing of opioids in Medicare and Medicaid, provides $330 million for opioid-related State and local assistance funding in the Department of Justice, and makes critical investments to the Department of Veterans Affairs to reduce over-reliance on opioids for pain management and to promote the safe and effective use of opioid therapy, and for addiction treatment.

• Investing in America’s Students. The Budget takes steps to ensure that Americans can receive the high-quality education and training they need to obtain a job and advance in their careers. The Budget proposes to hold institutions of higher education accountable for results by requiring colleges and universities to share a portion of the financial responsibility associated with Federal student loans to encourage them to improve performance. The Budget also continues to propose to expand Pell Grant recipients’ eligibility to include high-quality short-term programs, with sufficient guardrails in place to balance students’ needs with protecting taxpayers’ interests.

Quick Analysis

Ukraine’s Frozen Conflict

As we approach winter in the northern hemisphere, the war in Ukraine is beginning to resemble a “frozen conflict” from many perspectives. Ukrainian President Volodymyr Zelensky recently told the media he hopes the war will end faster once President-elect Trump takes over in January. Opinions in Moscow, however, differ from that of the Ukrainian leader. Russian President Vladimir Putin argues that the North Atlantic Treaty Organization (NATO) needs to exclude Ukraine from joining in “exchange” for peace. If it does not, he says, then no end to the war is in sight. So far there is no Christmas solution. Several NATO countries, according to Vladimir Socor of the Jamestown Foundation, are tentatively considering “coalitions-of-the-willing” to provide security for Ukraine outside of the formal NATO framework. There is, however, no collective mechanism today under which such an arrangement is viable. According to the NATO Charter, while Ukraine is a NATO partner country, it may not join as a full member since it has not fulfilled the requirements for membership. That has not stopped NATO and allies from continuing “to provide Ukraine with unprecedented levels of support, helping to uphold its fundamental right to self-defence,” according to the organization. Socor says that keeping Ukraine out of NATO will not advance peace with Russia. Waiting for a peace settlement, he suggests, would only serve to encourage Moscow to continue the war indefinitely. Although the Biden Administration officially withdrew its support for Ukrainian membership in 2021, NATO maintains an “open door” policy toward membership-seeking countries. The current White House position led the way for European states to oppose Ukraine’s membership saying that a decision should be delayed until “conditions are met.” Biden pushed for changing “open door” to a “bridge” metaphor. It is not intended as an across-the-board NATO policy and has been implemented in the past on a case-by-case basis, says Socor. “The alliance’s open-door policy was not fully insulated from Russia’s non-statutory blocking power, and NATO-aspirant countries’ path toward membership was not always irreversible.” Russia has successfully blocked states like Georgia from joining, first in 2008 and again after the war in Ukraine began in 2014. Russia recognizes the value add of Ukraine to NATO is enormous and that Kyiv has a better case than some other nations. Putin’s invasion was, in part, intended to foreclose that option. By 2021, Moscow was pushing hard to maximize its war objectives, which included further annexations of Ukrainian territory. A main goal for Putin was, and is, to ensure there is no Ukraine left to join NATO. As President-elect Trump prepares to assume office in January, he is faced with the historical challenges presented by the war. Post-conflict security guarantees were the center of several proposals made during the 2023 military stalemate. The incoming Trump Administration has yet to outline how it intends to handle the Russia-Ukraine war. Analysts in Washington believe that the new Administration will expect its European allies to guarantee the majority of Ukraine’s security needs. As we approach 2025, several European nations have acknowledged that they do not view Ukraine as eligible for NATO membership as it would draw the organization into the middle of the conflict. Others want to wait until the war is over or pending a “peace” settlement before considering Ukrainian membership. Socor reports that some “influential voices” are suggesting that “Kyiv should join NATO after “freezing” the war along a stable armistice line, de facto accepting Ukraine’s partition, with NATO security guarantees applying de jure to the government-controlled territory only.” This would mean starting accession talks soon with the actual talks to commence only after a ceasefire is in place. Trump arrives in Washington at a time when Putin’s hybrid strategies of war in Ukraine have eviscerated commonly-held differences between war and peace. “Absent a political consensus in NATO over Ukrainian membership, certain European allies, including France’s President Emmanuel Macron, are holding informal consultations about post-conflict security guarantees to Kyiv by NATO members outside of NATO’s framework,” according to the Jamestown Foundation. The Biden Administration downplayed the discussions on possible forms of military assistance and defense industry cooperation by sending only an Assistant Secretary of State. For a European peace to hold the Trump Administration would need to formally extend the United States’ nuclear deterrence to Ukraine. Options under discussion in Europe include a “coalition of the resolute” to deploy forces to Ukraine as part of a possible armistice package, deterring further Russian attacks, says Secor. European officials are also debating, without any agreement, whether its military forces could perform non-combat logistical roles to free Ukrainian forces to fight. None of the possible courses of action has moved forward as all eyes are waiting on the incoming Trump Administration for clues about its intended level of support for a NATO framework and other non-NATO proposals. Daria Novak served in the U.S. State Dept.