FY 2022 President’s Discretionary Budget Request – GovWin FMA’s First Take

On Friday the Office of Management and Budget (OMB) released the Biden Administration’s initial fiscal year (FY) 2022 Discretionary Budget Request. The new administration’s initial budget proposal includes $1.5T in top-line discretionary budget requests for the federal department and agencies, plus the administration’s policy and budget priorities in broad strokes. We are expecting a full federal budget release in early May.

The GovWin Federal Market Analysis (FMA) team has dug into the available budget detail so that we could provide you with our first impressions of what we found noteworthy in the discretionary budget request. We reviewed the largest federal departments’ budgets to get a sense of direction and priorities for FY 2022, which will begin October 1, 2021. Below is a summary graphic followed by key funding details and initiatives arranged by department.

Defense

The president’s budget request provides $715B in discretionary funding the Department of Defense, 1.6% more than the $703.7B the DOD enacted for Fiscal Year 2021.

Funding highlights include:

• Discontinues Overseas Contingency Operations (OCO) as a separate funding category.
• Prioritizes countering threats posed by China and Russia.
• Proposes responsible investments in the U.S. Navy’s fleet.
• Supports ongoing nuclear modernization programs.
• Invests in the development and testing of hypersonic strike capabilities.
• Invests in power and energy R&D to improve installation and platform energy performance and optimize capability.
• Supports DOD’s plan to divest legacy systems/programs and redirect resources from low- to high-priority programs, platforms and systems.

Health and Human Services

The president’s budget request provides $131.7B in base discretionary budget authority for HHS, which is a 23.5% increase from the FY 2021 enacted level.

Funding highlights include:

• Strengthens national and global readiness for the next public health crisis by providing $8.7B for CDC, an increase of $1.6B billion over the FY 2021 enacted level and the largest increase for CDC in nearly 20 years. CDC would use this additional funding to support core public health capacity improvements in states and territories, modernize public health data collection nationwide and train a cadre of epidemiologists and other public health experts.
• Provides the Office of the Assistant Secretary for Preparedness and Response (ASPR) with $905M to replenish and maintain the Strategic National Stockpile (SNS).  
• Proposes investments to enhance FDA’s organizational capacity.
• Promotes biomedical research through a $51B budget for NIH, a $9B increase over the FY 2021 enacted level, which includes $6.5B to establish the Advanced Research Projects Agency for Health (ARPA-H). ARPA-H’s initial focus would be on cancer and other diseases such as diabetes and Alzheimer’s.
• Advances the goal of ending the opioid crisis with a $10.7B investment and commits to end the HIV/AIDS epidemic with a $670M investment.
• Prioritizes mental health by providing $1.6B for the Community Mental Health Services Block Grant, more than double the FY 2021 enacted level.
• Invests $8.5B in IHS, an increase of $2.2B, to promote health equity for American Indians and Alaska Natives.

Veterans Affairs

The president’s budget request provides $113.1B in base discretionary budget authority for VA, an 8.2% increase over the FY 2021 enacted level. The request also includes $111.3B in advance appropriations for VA medical care programs in FY 2023.

Funding highlights include:

• Funds VA medical care with $97.5B, a $7.6B or 8.5% increase over FY 2021. These funds support continued improvement to veteran healthcare access, including increases in funding for women’s health, mental health, suicide prevention, and veterans’ homeless programs.
• Provides $2.1B for veterans’ homelessness programs.
• Includes $542M for existing programs dedicated to veteran suicide prevention, including funding to increase the capacity of the Veterans Crisis Line.
• Supports healthcare improvements with over $500M within the VA Medical Care accounts to begin implementing new and recently expanded healthcare programs for veterans.
• Furthers the VHA’s Office of Health Equity’s commitment to help eliminate health disparities based on race, gender, age, religion, socio-economic status, or disability by improving health outcomes for underserved veteran populations.
• Provides $4.8B for VA’s Office of Information Technology to modernize VA information technology by piloting application transformation efforts, supporting cloud modernization, delivering efficient information technology services, and enhancing customer service experience.
• Advances VA’s Electronic Health Program with $2.7B to continue modernizing VA’s Electronic Health Record.

Education

The president’s budget request provides $102.8B in base discretionary budget authority for Education, which is a 41% increase from the FY 2021 enacted level.

Funding highlights include:

• Provides $36.5B for Title I grants, a $20B increase compared to the FY 2021 enacted level, to help school districts deliver a high-quality education to students from low-income families. This investment provides the single largest year-over-year increase since the inception of the Title I program.
• Prioritizes the physical and mental well-being of students by providing $1B to increase the number of counselors, nurses, and mental health professionals in schools.
• Increases support for children with disabilities by funding Individuals with Disabilities Education Act (IDEA) grants with $15.5B, $2.6B increase.
• Supports full service community schools by providing $443M in funding, a $413M increase.
• Provides $100M to establish a new grant program to help communities develop and implement strategies that would build more diverse student bodies.
• Increases Pell Grant funding by $3B and ups the maximum Pell Grant by $400 to makes college more affordable for low- and middle-income students pursuing education beyond high school.

State and USAID

The president’s budget provides $63.5B in total discretionary funding for the Department of State, the U.S. Agency for International Development (USAID) and related international assistance programs, a $6.8B increase from the FY 2021 enacted level. (One note, this total also includes $3.3B for the international programs at the Department of the Treasury.) Of the total, $58.4B is slated for the Department of State and USAID, a $5.4B (+10%) increase from the 2021 enacted level.

Funding highlights include:

• Provides $10B for global health programs, including $1B to expand global health security programs to additional nations and increase investments in crosscutting research and viral discovery programs.
• Allocates $2.5B for international climate programs, $1.2B for the Green Climate Fund, and $485M to support other multilateral climate initiatives.
• Requests $861M for U.S. efforts to drive systemic reform and address the root causes of irregular migration from Central America to the U.S.
• Provides $2B for United Nations (UN) peacekeeping efforts.
• Supplies over $10B in refugee and humanitarian assistance to support vulnerable people abroad, including refugees, conflict victims, and other displaced persons.

Housing and Urban Development

The FY 2022 Discretionary Budget Request appropriates $68.7B (including offset receipts) for the Department of Housing and Urban Development, 15.1% more than the $59.6B enacted for Fiscal Year 2021. Without the offset HUD receives $58.2B in discretionary funding, $7.4B above the FY 2021 enacted level.

Funding highlights include:

• Designates $30.4B to expand assisted family assistance to an additional 200,000 households, prioritizing those who are homeless or fleeing domestic violence.
• Allocates $3.5B for homeless assistance grants.
• Includes $800M for energy efficiency modernization programs.
• Provides $500M for the HOME Investment Partnerships Program.
• Supplies $900M for affordable tribal housing.
• Provides $3.8B for the Community Development Block Grant program.

Homeland Security

The president’s budget requests $52.0B in total discretionary budget for DHS, essentially flat compared to the $51.9B from the FY 2021 enacted level.

Funding highlights include:

• Requests $2.1B for the Cybersecurity and Infrastructure Security Agency (CISA) to enhance cybersecurity tools, hire highly qualified experts, and obtain support services. This is a $110M increase from the FY 2021 enacted level. The budget also requests $20M for a new Cyber Response and Recovery Fund.
• Provides $1.2B for border infrastructure in part to modernize land ports of entry and border security technology and facilitate more robust and effective security screening to guard against illicit trafficking of persons and goods. No additional funding for border wall construction is requested and the budget proposes cancelling prior-year balances that are unobligated at the end of 2021.
• Requests $345M for the United States Citizenship and Immigration Services (USCIS) to address naturalization and asylum backlogs, support up to 125,000 refugee admissions in 2022, and allow for systems and operations modernization.
• Allocates $131M to prevent domestic terrorism, including research on the root causes of radicalization and enhanced community outreach.
• Proposes $599M for research and development climate resilience, cybersecurity data analytics, and transportation security technologies.
• Includes a $540M increase to incorporate climate impacts into pre-disaster planning and resilience efforts.

Energy

The president’s budget request provides $46.1B in base discretionary funding for DOE, a 10.2% increase, or $4.3B, over the FY 2021 enacted level.

Funding highlights include:

• Increases clean energy technology investments by 27% over FY 2021 funding, with more than $8B in FY 2022 discretionary funding to achieve a net-zero emissions economy by 2050.
• Requests $400M over FY 2021 for the Office of Science, totaling $7.4B, to enhance climate change research, advance AI and predictive analytics, and increase support for national laboratories.
• Creates the Building Clean Energy Projects and Work Initiative with $1.9B to achieve carbon pollution free electricity by 2035.
• Provides $1B for the new Advanced Research Projects Agency for Climate (ARPA-C) and the existing Advanced research Projects Agency for Energy (ARPA-E).
• Requests $416M for the U.S. Enrichment Corporation Fund to finance the Uranium Enrichment Decontamination and Decommissioning (UED&D) Fund at NNSA.
• Invests in infrastructure and IT upgrades at Historically Black Colleges and Universities (HBCUs) and Minority-Serving Institutions (MSIs).

Justice

The president’s budget request includes $35.2B in base discretionary budget authority for DOJ, a 5.3% increase, or $1.8B, over the FY 2021 enacted level.

Funding highlights include:

• Requests $2.1B, a $232M increase above FY 2021 to address gun violence, including $401M in state and local grants.
• Provides $1.5B for grants to reform state and local criminal justice systems, and $1.2B towards community-oriented policies and practices.
• Proposes $1B to support DOJ Violence Against Women Act (VAWA) programs, a 95% increase over FY 2021.
• Continues efforts to reduce the immigration court backlog with a request of $891M at EOIR, a 21% increase for 100 new immigration judges and support staff.
• Expands the Civil Rights Division and other related programs with a request of $209M, an increase of $33M over FY 2021.
• Invests an additional $101M to address domestic terrorism, including $45M at the FBI, $12M at USMS and $4M at NIJ.

Agriculture

The president’s budget request includes $27.8B in discretionary funding for the Department of Agriculture, 16% more than the $24B enacted for Fiscal Year 2021.

Funding highlights include:

• Allocates an increase of $65M over the FY 2021 enacted level for the Reconnect Rural e-Connectivity Program.
• Allots $717M for Rural Water and Wastewater Grants and Loans.
• Includes $1.7B for high-priority hazardous fuels and forest resilience projects.
• Provides $4B for research, education and outreach programs.
• Apportions $400M in new funding for rural electric providers.
• Contains $32M for the USDA’s “Strikeforce” anti-poverty initiative.
• Supplies $1.2B for the Food Safety and Inspection Service (FSIS).
• Provides $6.7B for family nutrition programs.

Transportation

The president’s budget request includes $25.6B in discretionary funding for the Department of Transportation, 14.3% more than the $24.4B enacted for Fiscal Year 2021.

Funding highlights include:

• Provides $2.7B for Amtrak expansion.
• Includes $2.5B for the Capital Investment Grant program to improve accessibility to transit.
• Supplies $1B for the Better Utilizing Investments to Leverage Development (BUILD) grant program.
• Allots $625M for a new passenger rail competitive grant program to invest in passenger rail.
• Includes $250M for grants for transit agencies to purchase low- and no-emission buses.
• Invests in the National Airspace System (NAS), including unmanned systems, commercial space launches and data analytics.
• Funds the purchase of a new maritime academy training vessel within the Maritime Administration.

National Aeronautics and Space Administration

The president’s budget request provides $24.7B in base discretionary budget authority for NASA, a 6.3% increase, or $1.5B, over the FY 2021 enacted level.

Funding highlights include:

• Continues support for human exploration of the Moon, Mars and beyond with $6.9B for the Artemis program and crewed exploration missions to the Moon.
• Provides $3B to operate the International Space Station.
• Requests $2.3B for Earth Science programs, emphasizing missions to observe the effects of climate change.
• Increases investments for NASA’s Space Technology R&D with $1.4B, and $915M for Aeronautics R&D.  

Interior

The president’s budget request includes $17.4B in base discretionary budget authority for DOI, a 16% increase, or $2.4B, over the FY 2021 enacted level.

Funding highlights include:

• Requests $4B, an additional $600M over FY 2021, to fund several DOI tribal programs surrounding education, law enforcement and clean energy development.
• Provides $340M to the department for hazardous fuels management and burned area rehabilitation projects.
• Invests an additional $200M to the USGS and other bureaus to delineate information about the impacts of climate change.
• Allocates an additional $200M towards the conservation of U.S. natural resources to support the goal of conserving 30% of land and water by 2030.

Treasury

The president’s budget request provides $14.9 in base discretionary budget authority for Treasury, a 10.6% increase from the FY 2021 enacted level.

Funding highlights include:

• Provides $13.2B for the IRS, a $1.2B or 10.4% increase over FY 2021 enacted levels. This funding would allow the IRS to increase oversight of high-income and corporate tax returns to ensure compliance; provide new and improved online tools for taxpayers; and improve telephone and in-person taxpayer customer service.
• Provides $330M to expand the role of Community Development Financial Institutions (CDFIs) which provide loans to start-ups and small businesses to promote the production of affordable housing and community revitalization projects.
• Provides $191M for the Financial Crimes Enforcement Network (FinCEN) to create a database that tracks the ownership and control of certain companies and organizations and to help combat the use of complex corporate structures to shield illegal activity.

Labor

The president’s budget request provides $14.2B in base discretionary budget authority for HHS, which is a 14% increase from the FY 2021 enacted level.

Funding highlights include:

• Invests $2.1B in Labor’s worker protection agencies, a $304M increase, to enable the enforcement and regulatory work needed to ensure workers’ wages, benefits, and rights are protected.
• Expands access to registered apprenticeships (RA) by providing $285M, a $100M increase, to expand RA opportunities while increasing access for historically underrepresented groups, including people of color and women.
• Proposes $3.7B for Workforce Innovation and Opportunity Act State Grants to make employment services and training available to more dislocated workers, low-income adults, and disadvantaged youth hurt by the economic fallout from the COVID-19 pandemic.
• Provides $100M to support the development of information technology solutions for unemployment insurance systems that can be deployed in states to ensure timely and equitable access to benefits.
• Includes a $100M investment for Labor’s role in the new multi-agency POWER+ Initiative, aimed at reskilling and reemploying displaced workers in Appalachian communities.

More Analysis Coming Soon

The summary points above are our initial observations from OMB’s budget document release. In the coming days and weeks as details become available the GovWin Federal Market Analysis team will be publishing more robust analysis of the FY 2022 budget – including our analysis of the full budget once it is released, 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 2022.

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GovWin Federal Market Analysis (FMA) team members Christine Fritsch, Angie Petty and Alex Rossino contributed to this article.