FY 2023 President’s Budget Request – GovWin FMA’s First Take

On Monday the Office of Management and Budget (OMB) released the Biden Administration’s long-awaited fiscal year (FY) 2023 Budget Request. The release provides detailed funding and program information for most Civilian departments and agencies, but only broad strokes for the Department of Defense (DOD) and military departments. (The detailed DOD budget data is expected sometime in April, per the Pentagon.)

The GovWin Federal Market Analysis (FMA) team has dug into the available budget details so that we could provide you with our first impressions of what we found noteworthy in the FY 2023 budget request. We reviewed the largest federal departments’ budgets to get a sense of direction and priorities for FY 2023, which will begin October 1, 2022. Below is a summary graphic followed by key funding details and initiatives arranged by department.

Air Force

The president’s budget request provides $234.1B in total discretionary funding for the Department of the Air Force (USAF), a 14.5% increase over the FY 2021 enacted level. This includes $24.5B for the U.S. Space Force (USSF) for FY 2023, a $9.1B increase over the FY 2021 enacted level.

Funding highlights include:

• Includes Operations and Maintenance funding of $68.1B for the USAF and $4.0B for USSF, $7.2B and $1.4B more than enacted in FY 2021 respectively.
• Provides $25.7B for Procurement at the USAF and $3.6B for the USSF. The USAF sees a $400M decrease and USSF sees a $1.3B increase from the enacted FY 2021 levels.
• Allocates $33.4B and $11.3B for Research, Development, Test and Evaluation at the USAF and USSF respectively, representing $7.2B and $800M increases respectively from the enacted FY 2021 levels.

Navy

The president’s budget requests $230.9 for the Department of the Navy, an increase of $24B (11.6%) from the FY 2021 enacted level.        

Funding highlights include:

• Includes $77.7B for Operations and Maintenance, 9.1% more than the enacted FY 2021 level.
• Provides $66.0B for Procurement, 7.0% above the FY 2021 enacted level.
• Allocates $24.08 for Research, Development, Test and Evaluation, 6.4% more than the FY 2021 enacted level.

Army

The president’s budget requests $172.7B in discretionary funding for the Department of the Army, 1.0% less than enacted for Fiscal Year 2021.

Funding highlights:

• Includes $65.3B for Operations and Maintenance, 1.6% more than enacted in FY 2021.
• Provides $22.6B for Procurement, 11% less than the level enacted in FY 2021.
• Allocates $14.7B for Research, Development, Test and Evaluation, 3.0% less than enacted in FY 2021.

Defense Agencies

The president’s budget requests $130.7B in discretionary funding for Defense Agencies, 10.1% more than enacted for Fiscal Year 2021.

Funding highlights:

• Includes $69.7B for Operations and Maintenance, 9.0% more than enacted in FY 2021.
• Provides $5.2B for Procurement, a reduction of 25% from the level enacted in FY 2021.
• Allocates $25.1B for Research, Development, Test and Evaluation, 5.5% more than the level enacted in FY 2021.

Health and Human Services

The president’s budget request provides $127.3B in base discretionary budget authority for HHS, which is a 26.8% increase from the FY 2021 level.

Funding highlights include:

• Invests $81.7B over five years in pandemic preparedness and biodefense across HHS public health agencies to enable an agile, coordinated, and comprehensive public health response to future threats.
• Funds the Advanced Research Projects Agency for Health (ARPA-H) with $5B for federal research and development, initially focused on cancer and other diseases such as diabetes and dementia.
• Includes $9.9B to build public health system capacity at CDC and at state and local levels to improve immunization programs, expand public health infrastructure, and modernize public health data collection.
• Requests $7.8B in IT funding which is a 1.2% increase over FY 2021 levels.

Veterans Affairs

The president’s budget request provides $135.2B in base discretionary budget authority for VA, a 29% increase over the FY 2021 level. Total discretionary amounts to $139B with inclusion of $3.9B for medical collections.

Funding highlights include:

• Prioritizes VA medical care by investing $119B, a 32% increase from FY 2021. The budget request fully funds inpatient, outpatient, mental health, and long-term care services, and invests in training programs for clinicians, health professionals, and medical students.
• Supports veteran suicide prevention with $497M for suicide prevention initiatives, such as expansion of the Veterans Crisis Line’s 988, the suicide prevention 2.0 program, a safety campaign in partnership with other agencies, and a grant program to enhance community-based prevention strategies.
• Allocates $13.9B for VA mental healthcare, including comprehensive treatments and services to meet the needs of each veteran and the family members involved in the veteran’s care.
• Requests $8.6B in IT funding which is a 2.8% increase over FY 2021 levels.

Education

The president’s budget request provides $88.3B in base discretionary budget authority for Education, which is a 20.9% increase from the FY 2021 level.

Funding highlights include:

• Provides $36.5B for Title I, which helps schools provide learning opportunities to students in low-income communities. Funding includes $20.5B in discretionary and $16B in mandatory funding.
• Includes a $1B to increase the number of counselors, nurses, school psychologists, social workers, and other health professionals in schools to combat the effects of the pandemic.
• Allocates $16.3B for Individuals with Disabilities Education Act (IDEA) grants to states to support special education and related services for students in grades Pre-K through 12.
• Requests $1.1B for IT, which is a 26.7% increase over FY 2021 levels.  

Housing and Urban Development

The president’s request provides $71.9B in discretionary funding for the Department of Housing and Urban Development, an increase of 20.5% over the level enacted in FY 2021.

Funding highlights:

• Includes $32.1B for the Housing Choice Voucher (HCV) Program, accommodating 200,000 new vouchers.
• Provides $1.1B in climate resilience funding for public housing improvements nationwide.
• Allocates $2.2B for management and administration expenses, including investments in critical staffing and IT requirements.
• Proposes $548M for IT, an increase of $130M compared to the enacted level in FY 2021.

State and USAID

The president’s budget provides $60.4B is for the Department of State and the U.S. Agency for International Development (USAID), a 13.8% increase from the 2021 enacted level.

Funding highlights include:

• Provides $10.6B for global health programs, a $1.4B increase above the 2021 enacted level. An additional $6.5B is included for State and USAID over five years to make transformative investments in pandemic and other biological threat preparedness globally.
• Includes over $11B in international climate financing, including a $1.6B contribution to the multilateral Green Climate Fund. The Budget also supports a $3.2B loan to the Clean Technology Fund to finance clean energy projects in developing countries.
• Allocates $350M to expand reliable and affordable internet access through the development and deployment of secure digital and technological infrastructure and improve international cybersecurity practices.
• Requests $3.5B in total IT funding, a 11.0% increase over the FY 2021 level of $3.1B.

Homeland Security

The president’s budget requests $56.7B in total discretionary budget authority, a 5.4% increase from the FY 2021 enacted level. An additional $19.7B for the Disaster Relief Fund (DRF) is provided for disaster response, recovery and resilience.

Funding highlights include:

• Allots $108M for Transportation Security Administration’s Checkpoint Property Screening System (CPSS) program and $19M for On-Person Screening Algorithm Development to address capability gaps in screening technology, while improving passenger experience and wait times.
• Provides $309M for modern border security technology and assets, including $63M for Border Enforcement Coordination Network (BECN) modernization, $37M to enhance the Border Patrol’s situational awareness through the Common Operating Picture, $24M for the Tactical Maritime Surveillance System (TMSS), and $14M for the Integrated Surveillance Tower program to consolidate legacy surveillance towers.
• Supplies $89M to improve and modernize laboratories in the Science and Technology Directorate (S&T).
• Requests $8.9B in total IT funding, a 21.0% increase over the FY 2021 level of $7.4B.

Energy

The president’s budget request provides $48.2B in base discretionary funding for DOE, a $4.1B increase over FY 2021.

Funding highlights include:

• Provides the NNSA with $21.4B, a $1.7B increase over FY 2021, particularly to increase funding for key arms control, nuclear nonproliferation and counterterrorism programs.
• Accelerates the research and development of energy cost-cutting technologies with $4.0B to the Office of Energy Efficiency and Renewable Energy, a $1.2B increase over FY 2021.
• Proposes $488M for cybersecurity activities, a 7% increase over FY 2021, to modernize cyber defenses and strengthen U.S. incident response capabilities.
• Includes $2.9B in the FY 2023 IT budget request, an increase of 14.7% from $2.5B in FY 2021.

Justice

The president’s budget request includes $37.7B in base discretionary budget authority for DOJ, a $4.2B increase over FY 2021.

Funding highlights include:

• Invests $17.4B across DOJ bureaus to bolster federal law enforcement capacities, a $1.7B increase above FY 2021.
• Provides over $6.2B to the Office of Justice programs to support DOJ grant programs for state, local and tribal law enforcement partners, as well as $2.8B to the Community Oriented Policing Service (COPS) program.
• Enhances protection of civil rights with $215M for the Civil Rights Division; $25M for Community Relations Services; an additional $18M to the FBI and $8.2M to the U.S. Attorneys to advance civil rights work; and $10M for the Office for Access to Justice.
• Includes $4.3B in the FY 2023 IT budget request, an increase of 9.1% above $3.9B in FY 2021.

Agriculture

The president’s budget request provides $28.5B in base discretionary budget authority for the Department of Agriculture, which is a 16.8% increase from the FY 2021 level.

Funding highlights:

• Provides $2.75B for IT, an increase of $100M from the FY 2021 enacted level
• Funds the Forest Service with $6.7B, including $2.7B to mitigate wildfire risk, a proposed increase of $759M vs. the enacted level in FY 2021.
• Allocates $262M in funding for the Farm Production and Conservation Business Center, including an additional $12M for workforce recruiting.
• Allocates $1.9B for the Agricultural Research Service, adding $45.4M for construction and the modernization of ARS buildings and facilities.
• Requests $4.0B in IT funding, approximately the same as the FY 2021 level.

Transportation

The president’s request provides $26.8B in discretionary funding for the Department of Transportation, 5.9% more than the total enacted in FY 2021.

Funding highlights:

• Requests $68.9B (inc. mandatory funding) for the Federal Highway Administration, $9.45B of which is the Infrastructure Investment and Jobs Act (IIJA) supplemental funding, to maintain roads and bridges nationwide.
• Contains $23.6B for the Federal Aviation Administration, including $5.0B from the IIJA, to modernize aging airspace infrastructure. Also adds $4.9M for unmanned aircraft integration.
• Allocates $22.4B for the Federal Transit Administration, including $4.25B from the IIJA, to renew public transportation systems and develop transit infrastructure.
• Includes $3.8B for IT, an increase of $100M from the FY 2021 enacted level.

National Aeronautics and Space Administration

The president’s budget request provides $15.9B in base discretionary budget authority for NASA, a $3.4B increase over FY 2021.

Funding highlights include:

• Provides $8.0B for NASA’s Science mission, including $3.1B for Planetary Science; $2.4B for Earth Science; $1.6B for Astrophysics; $760M for Heliophysics; and $100M for Biological and Physical Sciences.
• Prioritizes climate change research and Earth-observing satellites with $2.4B.
• Funds NASA’s IT program at $667M to expand cyber risk management and IT modernization activities.
• Includes $2.2B in the FY 2023 IT budget request, a decrease of 4.2% from $2.3B in FY 2021.

Treasury

The president’s budget request provides $16.2B in base discretionary budget authority for Treasury, a 20% increase from the FY 2021 level.

Funding highlights include:

• Allocates $14.1B for the IRS, an 18% increase from FY 2021, including an increase of $798M to improve the taxpayer experience, and $310M for IRS Business Systems Modernization.
• Funds the Financial Crimes Enforcement Network (FinCEN) at $210M to increase oversight of the financial sector, strengthen corporate accountability, and provide support to law enforcement and investigative entities.
• Allots $331M for the Community Development Financial Institutions (CDFI) Fund to expand lending in disadvantaged communities and increases the supply of affordable housing. 
• Requests $6.1B for IT, which is a 12.7% increase over FY 2021 levels.

Labor

The president’s budget request provides $14.6B in base discretionary budget authority for Labor, which is an 18% increase from the FY 2021 level.

Funding highlights include:

• Invests $2.2B billion in the department’s worker protection agencies to ensure workers are treated with dignity and respect in the workplace.
• Aims to equip workers with skills for obtaining high-quality jobs by investing in effective, evidence-based training models, including $100M for community colleges to build their capacity to work with the public workforce development system and employers.
• Provides $303M to expand access to registered apprenticeships particularly in high-growth fields, such as technology, advanced manufacturing, healthcare, and transportation.
• Requests $924M for IT, which is a 6.5% increase over FY 2021 levels.  

Commerce

The president’s budget request provides $15.9B in base discretionary budget authority for DOC, a $2.9B increase over FY 2021.

Funding highlights include:

• Boosts NOAA’s budget with a $1.4B increase to $6.9B to invest in the nation’s weather and climate satellite systems.
• Increases the NIST’s budget by 42% to $1.5B to highlight research and innovation in areas such as artificial intelligence, cybersecurity and quantum computing.
• Prioritizes supply chain resiliency and domestic manufacturing with over $600M in funding across several DOC agencies.
• Includes $2.6B in the FY 2023 IT budget request, a decrease of 8.0% from $2.9B in FY 2021.

General Services Administration

The president’s budget request provides $11.8B in base discretionary budget authority for GSA, a $2.3B increase over FY 2021.

• Requests $300M for the Technology Modernization Fund to continue awarding high-priority projects in cybersecurity and retiring legacy systems.
• Supports the Administration’s goal of transitioning to a zero-emission fleet by providing $300M to procure zero-emission and electric vehicles and charging infrastructure.
• Provides the Public Buildings Service with $378M in net positive obligation authority, bringing the Federal Building Fund New Obligational Authority total to $10.9B.
• Includes $1.2B in the FY 2023 IT budget request, an increase of 14.1% from $1.0B in FY 2021.

Federal Information Technology (IT) Budget

The FY 2023 IT budget for Civilian departments and agencies provided by OMB and posted to the IT Dashboard lists total investments at $64.1B, which is $4.6B (7.8%) below the $59.4B enacted for FY 2021. Among the largest Civilian departments listed below, only Commerce and NASA are indicating a decrease in IT budget compared to their FY 201 enacted level.

The Department of Defense (DOD) IT amounts are not included in any of the OMB budget artifacts and the DOD has not yet published detailed IT budget information on their own. However, in their currently released discretionary budget overview the Pentagon mentions plans to prioritize investments in several IT areas, such as zero trust architecture, artificial intelligence, cybersecurity, satellite communications and advanced analytics. Also The DOD is requesting $250M for 5G telecommunications infrastructure and capabilities. Hopefully, DOD’s IT budget will be released along with the rest of their detailed budget information in April and and will not be kept behind the veil of national security in a wholesale fashion.

Additional Analysis Coming Soon

The budget highlights listed above provide our initial observations from OMB’s budget release and those of the largest departments. In the coming days the GovWin Federal Market Analysis team will be publishing more robust analysis of the FY 2023 budget, 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 look toward FY 2023.