FY 2020 President’s Budget Request – GovWin FMA’s First Take

The Office of Management and Budget (OMB) released the first phase of the Trump Administration’s fiscal year (FY) 2020 Budget Request after a month delay due to the partial government shutdown that lasted through mid-February.  The new budget proposal – which provides a wide ranging perspective on the administration’s policy and legislative agenda for the next fiscal year – will be released in two phases, with more details (especially for the Department of Defense (DOD)) expected a week after this initial release.

The GovWin Federal Market Analysis (FMA) team wasted no time to dig into the first round of budget documents so that we could provide you with our first impressions of what we found noteworthy in the new budget request. We reviewed the largest federal departments’ discretionary budgets to get a sense of direction and priorities for FY 2020, which will begin October 1, 2019. Below is a summary graphic followed by key funding details and initiatives arranged by department.

Defense

The president’s budget request provides $718.3B in base discretionary budget authority for the DOD, 4.9% more than the $685B estimated for Fiscal Year 2019.

Funding highlights include:

• Appropriates $59B for research, engineering, and prototyping activities
• Invests $9.6B to advance DOD’s three primary cyber missions: safeguarding DOD’s networks, supporting combatant command objectives, and defending the nation
• Proposes $286M for investments in the defense industrial base
• Provides $208M to scale up the DOD’s Joint Artificial Intelligence Center (JAIC)

Veterans Affairs

The president’s budget request provides $93.1B in base discretionary budget authority for VA, a 7.5% increase over the estimated FY 2019 enacted level.

Funding highlights include:

• Proposes $80.2B to fully fund VA medical care, a $7B increase over FY 2019 enacted levels.
• Supports implementation of the VA MISSION Act of 2018 to give veterans greater health care choice and to consolidate all veteran community care programs under a single program.
• Implements the new urgent care benefit for veterans, and the expansion of the caregivers program.
• Advances VA’s national strategy for preventing veteran suicide.
• Provides $4.3B for IT investments aimed at improving the online experience between veterans and the department.
• Allocates $1.6B for the implementation of the new electronic health records system.
• Contains $1.6B for VA’s construction program, including construction of a new hospital in Louisville, KY.
• Modernizes the veteran appeals process, and increases access to burial and memorial benefits.
• Promotes investments that will create long-term cost savings, such as $200M for cloud migration and aging infrastructure replacement.
• Provides $229M for improved oversight, accountability, and performance, including additional funding for the Office of Accountability and Whistleblower Protection and the Office of the Inspector General.

Health and Human Services

The president’s budget request provides $87.1B in base discretionary budget authority for HHS, a 12% decrease from the estimated FY 2019 enacted level.

Funding highlights include:

• Fights the opioid epidemic through $1.5B for State Opioid Response grants, $1B for pain research at NIH, $221M to expand the behavioral health workforce, $120M to support treatment and prevention, and $476M for CDC to track and prevent overdoses.
• Includes $723M to improve mental health via the Community Mental Health Services Block Grant and $125M for children’s mental health services.
• Aims to reform drug pricing and payment through modernizing the Medicare Part D prescription drug benefit, reducing costs for Part B drugs, increasing access to generic drugs, improving program integrity, and lowering costs for Medicaid prescription drugs.
• Supports consumer and state reforms to health care by expanding Health Savings Accounts, growing the Market-Based Health Care Grant Program, the Medicaid block grant, and the per capital cap program to empower state health care program innovation, as well as provide states more Medicaid program flexibility. 
• Includes legislative and administrative proposals to improve Medicare, Medicaid and CHIP program integrity.
• Proposes actions to strengthen and protect Medicare by reducing wasteful spending and incentivizing efficiency and health care quality.
• Provides greater access to innovative new medical technologies for Medicare beneficiaries.
• Allocates $33B for health research at NIH to improve public health in areas such as childhood cancer, a universal flu vaccine, and the opioid crisis.

Homeland Security

The president’s budget requests $51.7B in total discretionary budget for DHS, a $3.7B or 7.8% increase from the FY 2019 estimated level. The budget proposes  the  creation  of  a  Border  Security  and  Immigration  Enforcement  Fund  to  provide  the  additional  funding  resources  necessary  to expand immigration  detention capacity to 60,000 and hire 15,000 DHS law enforcement officers, 600 new ICE immigration court prosecuting attorneys, 100 new immigration  judge  teams  and  associated  support  personnel at  the  Department  of  Justice.

Funding highlights include:

• Provides $19.4B in disaster relief to help U.S. communities recover from major disasters
• Includes $5B to construct approximately 200 miles of border wall along the U.S. Southwest border
• Supplies $1B for  DHS  cybersecurity efforts, to include increasing the  number of DHS-led network risk assessments from 473 to 684 – including assessments of State and local electoral systems – and for additional tools and services within the EINSTEIN and the Continuous Diagnostics and Mitigation (CDM) programs
• Allocates $506M to hire over 2,800 additional law enforcement officers and critical support personnel at U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement (ICE) 
• Allots $367M for CBP aircraft, vessels, surveillance technology, and equipment.
• Includes $1.2B to continue to modernize U.S. Coast Guard vessels and aircraft
• Provides $7.8B for the Transportation Security Administration (TSA) employees and technology to ensure the free movement of people and commerce
• Allocates $2.3B for the U.S. Secret Service and proposes hiring an additional 177 special agents, officers, and  professional  staff  meet its missions

State and US AID

The president’s budget provides $40.0B in total discretionary funding for the Department of State, the U.S. Agency for International Development (USAID) and related international assistance programs, a $12.3B or 23% decrease from the FY 2019 estimated level.

Funding highlights include:

• Allocates $4.7B for Diplomatic Programs supporting DOS day-to-day operations of overseas staff
• Provides $1.3B for USAID operating expenses to support USAID personnel in 87 missions
• Supplies $4.7B to protect overseas personnel and facilities, which includes $2.2B for new, secure embassy construction
• Includes $3.3B in Foreign Military Financing grant assistance to bolster Israel’s capacity to defend itself against threats in the region
• Invests $311M for modernizing the State Department’s information technology, including wireless and cloud-based services, new digital capabilities and greater mobility

Energy

The president’s budget request provides $31.7B in base discretionary budget authority to DOE, an 11% decrease from FY 2019 enacted levels.

• Provides $5.5B to the Office of Science, including $500M for exascale computing, $169M in quantum information science and $71M in artificial intelligence and machine learning initiatives. 
• Bolsters support for cyber and energy security initiatives with $156M for the new Office of Cybersecurity, Energy Security and Emergency Response (CESER).
• Allocates $2.3B to support early-stage R&D of energy technologies.
• Continues waste and contamination operations with $6.5B for 16 sites to meet environmental regulatory requirements.
• Invests in physical infrastructure improvements for the national stockpile, including construction of the Uranium Processing Facility in TN and repurposing of the Fuel Fabrication Facility in SC.
• Eliminates the Title XVII Innovative Technology Loan Guarantee; the Advanced Technology Vehicle Manufacturing Loan; the Tribal Energy Loan Guarantee; and the Advanced Research Projects Agency-Energy programs.

Justice

The president’s budget request provides $29.2B in base discretionary budget authority to DOJ, a 2% increase over FY 2019 requested levels.

• Allocates $14.9B for federal law enforcement efforts across several divisions at DOJ to bolster areas such as national security crises response, and investigating violent and drug-related crimes.
• Provides $9.3B to the FBI, an estimated 6% increase over FY 2019 levels to expand mission areas of cybersecurity, transnational organized crime and background checks for firearms.  
• Strengthens efforts to combat the opioid epidemic with $2.3B for DEA, including $330M in opioid-related assistance for state and local governments.
• Prioritizes immigration adjudication with $673M for EOIR to hire 100 additional judge teams and expand physical and virtual courtrooms.
• Allots $754M to the Bureau of Prisons to strengthen efforts in inmate reentry programs and reduce the rate of recidivism.
• Offers the complete transfer of tobacco regulatory and enforcement responsibilities at the ATF to the Alcohol and Tobacco Tax and Trade Bureau (TTB) under Treasury.

Transportation

The president’s budget request includes $21.4B in discretionary appropriations for the Department of Transportation, 21.5% less than the $27.3B estimated for Fiscal Year 2019.

Funding highlights include:

• Invests $3.3B in the Federal Aviation Administration’s infrastructure, including $127M to support the integration of unmanned aerial systems
• Allocates $2.7B for the Federal Highway Administration’s Highway Safety Improvement Program
• Provides $929M for the National Highway Traffic Safety Administration (NHTSA)
• Proposes adding $502M to the DOT’s Working Capital Fund to continue the consolidation of departmental IT investments into the Office of the Secretary of Transportation (OST)
• Includes $200M for national transportation infrastructure investments

Treasury

The president’s budget request provides $12.7B in base discretionary budget authority for Treasury, a 1% decrease from the estimated FY 2019 enacted level.

Funding highlights include:

• Provides $35M for Treasury’s role as the chair for the Committee on Foreign Investment in the U.S. (CFIUS) in order to protect critical U.S. technologies and infrastructure from new and evolving threats, while preserving an open investment environment.
• Contains $167M for the Treasury’s Office of Terrorism and Financial Intelligence to include workforce expansion, IT investments and additional capabilities to support the mission.
• Allocates $18M to protect Treasury IT systems against cyber threats and improve response and recovery capabilities.
• Proposes $11.5B in base discretionary funding for the IRS to support its mission of collecting and processing taxes, and to continue IT modernization and provide acceptable levels of taxpayer services.
• Provides $290M for IRS’ multiyear IT modernization efforts to upgrade infrastructure, consolidate case management systems, and integrate tax processing systems.
• Supports increased efforts at the Bureau of the Fiscal Service to monitor and protect the vital IT systems that facilitate debt financing operations, provide central payment services, and run government-wide accounting and reporting services.

Commerce

The president’s budget request provides $12.2B in base discretionary budget authority to DOC, a 9% increase above FY 2019 requested levels.

• Commits $7.2B to the administration and completion of the 2020 Decennial Census
• Emphasizes research of cutting-edge technologies such as quantum computing, artificial intelligence and microelectronics with $688M for NIST.
• Provides $1.2B towards the development of critical weather satellite systems, including funding to research commercial technology use in future satellite architectures.
• Supports the consolidation of economic statistic programs at Census, BEA and BLS.
• Eliminates the Economic Development Administration and Manufacturing Extension Partnership program as well as several grant and education programs at NOAA.

Looking Forward to “Phase Two” and Beyond

The high points above are our observations from the first round of OMB’s budget document release and there is still much that is expected to come when OMB and DOD release additional documentation – including details on federal IT portfolio investments. We will delve into this next round as well and let you know what we have gleaned.

In the coming weeks the GovWin Federal Market Analysis team will be publishing our complete analysis of the FY 2020 budget request, where we will go into greater detail on the key initiatives, IT investments and contractor implications that will shape the federal IT marketplace as we head into FY 2020.