Public Policy Track: Budget and Appropriations Categories of Federal Spending FY 2020 Appropriations Debt Ceiling Mandatory Programs and Revenue Prep for Hill Visits Q & A

Categories of Federal Spending

Areas of Federal Spending Discretionary Spending: Defense Non-Defense Mandatory Spending – “Entitlements” Interest on the Debt

Categories of Federal Spending Definitions: “Discretionary” programs are ones that Congress must set funding levels for each year through the appropriations process.  Non-defense discretionary (NDD) programs comprise domestic and international programs outside of national defense. Mandatory programs are government programs that guarantees certain benefits to a particular group or segment of the population. These programs remain in place until changed or require renewal only periodically. 

Federal Spending, FY 2017

Dollar Change from FY10 to FY19 (in FY19 $)1   FY 2010 FY10, in FY19 $1 FY 2018 FY 2019 Dollar Change from FY10 to FY19 (in FY19 $)1 Percent Change from FY10 to FY19 JOB TRAINING AND EMPLOYMENT SERVICES Adult Training (WIOA) 861.5 1,010.9 845.6 -165.3 -16.3% Youth Training (WIOA) 924.1 1,084.3 903.4 -180.9 -16.7% Dislocated Worker Assistance 1,066.7 1,251.7 1,040.9 -210.8 -16.8%

FY’20 Appropriations; Debt Ceiling

NDD Programs Facing Significant Cut if No New Funding Deal is Reached Past Budget Deals Have Provided Temporary Relief Another Budget Deal is Needed for FY 2020 - NDD to be cut by 9% Payfors, partisan differences, & campaign promises are barriers to a deal

President’s FY 2020 Budget Statement of Administration’s Priorities (NOT legislation) released in March. Addresses all spending and revenue. FY 2020 again includes drastic cuts to numerous disability programs. $2.7 trillion in cuts over 10 years, including cuts to Medicaid, the Affordable Care Act programs, and non-defense discretionary (NDD) programs. NDD programs – which include education, employment, housing, transportation, and more – would be cut by $54 billion (9% from 2019 levels alone). Examples at right.

Status of FY 2020 Appropriations Bills House began passing spending bills in June assuming a deal for increased caps Senate has refused to develop spending bills until there is a deal Disagreements between parties and with the White House on a deal about amounts, pay fors, parity with Defense, and tying to an increase in the debt ceiling Bill House Senate Labor-HHS-Education* Passed Defense State-Foreign Operations Energy and Water Commerce, Science, Justice Agriculture Interior Military Construction, Veterans Affairs Transportation, Housing & Urban Dev* Legislative Branch Homeland Security Financial Services https://www.congress.gov/resources/display/content/Appropriations+for+Fiscal+Year+2020 * Fund the vast majority of discretionary disability programs

House FY 2020 Appropriations Passed by House of Representative in June. Includes numerous increases for NDD programs. Examples at right.

Timeline of Major Events Issue Deadline Potential New Cost  Raise Debt Ceiling Official: March 2, 2019 Must-act: Sept. or Oct. N/A Increased Defense/Non-Defense Discretionary (NDD) Caps October 1, 2019 1-year: $125 B; 10 year: up to $1.7 T Funding the Government / Appropriations for FY 2020 None if Congress abides by the budget caps http://www.crfb.org/blogs/upcoming-congressional-fiscal-policy-deadlines Continuing inflation adjustments over the next decade would cost $2 trillion through 2029 ($220 billion in 2029 alone). https://www.crfb.org/papers/cbos-2019-long-term-budget-outlook

Mandatory Spending; Revenue

Mandatory Spending Currently 64% of all spending Amount of spending will grow because of baby boomers aging

Revenue: Where Does It Come From? Main Sources of Income Are: Personal Income Tax Payroll Tax Excise and other taxes Corporate income tax

Individual Income Tax and Payroll Taxes Individual and Payroll Taxes represent a growing percentage of revenue Corporate income tax has shrunk dramatically since the 1950s Excise, estate and other taxes have also shrunk as a percentage of revenue

Revenue and Spending Tax cuts in 2001 and 2017 greatly decreased revenue Discretionary spending has been significantly reduced as a percentage of GDP since 1995 Insufficient revenue creates pressure to cut spending

Mandatory Spending: Social Security and Medicare Vital to people with disabilities when they are not able to perform self-supporting work Medicare and Social Security are paid for through Federal Insurance Contribution Act (FICA) or payroll taxes Social Security is financed entirely by payroll taxes; Medicare is a mix of payroll taxes and general federal revenue Both are referred to as “social insurance” Last time these social insurance premiums were increased was the late 1980s

Social Security Solvency: Action Needed Social Security system can pay all scheduled old age, survivors, and disability benefits until 2035 Disability Insurance Trust Fund can pay all scheduled benefits until 2052 Two basic ways to ensure long-term solvency Increasing Revenue or Cutting benefits Many different revenue options: increase FICA tax rate, raise or eliminate the cap on earnings subject to FICA tax, and tax other kinds of income besides wages

Social Security should be expanded Social Security benefits are very modest and are not enough to lift many beneficiaries out of poverty Current legislative activity centers on long-term solvency and making benefits more adequate – Such as the Social Security 2100 Act Americans value Social Security and are willing to pay more to ensure its long- term solvency More than 7 in 10 respondents to a National Academy of Social Insurance poll supported a solvency package that increases benefits by raising revenue with no benefit cuts That is true regardless of income level, party affiliation, or education level

Mandatory Spending: Medicare There are several parts to the Medicare program: Part A (hospital insurance); Part B (medical insurance); Part C (Medicare Advantage); Part D (prescription drugs) Total Medicare spending was 15 percent of total federal spending in 2017 (projected to rise to 18 percent by 2028) Medicare’s Hospital Insurance (HI) trust fund will remain solvent — that is, able to pay 100 percent of the costs of the hospital insurance coverage that Medicare provides — through 2026.  Can fix by revenue increases or “controlling costs” FICA taxes for Medicare have not been increased since 1986

Mandatory Spending: Medicaid Medicaid provides health care and long-term services and supports to many autistic people and millions of other people with disabilities Considered mandatory spending because spending is based on who is eligible for the program not based on an annual appropriation Medicaid is funded entirely through general federal revenues Has been under great pressure to cut spending on Medicaid Per capita caps, block grants Affordable Care Act repeal efforts

Prep for Hill Visits

Autism Society Talking Points Strengthen, not weaken, vital entitlement programs such as Social Security, Medicaid, Medicare, SSI, Temporary Assistance for Needy Families (TANF), and SNAP (food stamps); Promote cost-effectiveness when such efforts do no harm to our constituents and allow them to live as independently as possible in the community; Eliminate or raise spending caps that impact discretionary programs that support people with disabilities and replace them with a budget that includes revenue increases and no further cuts to programs that support people with disabilities and their families;

Autism Society Talking Points (cont) Address the significant unmet needs by expanding the federal government’s investment in people with disabilities to enable them to live and work as independently as possible in the community; Ensure that eligibility for services and benefits is not restricted and that the level of services and benefits for entitlement programs (such as Medicaid, Medicare, and Social Security) is not reduced or limited to achieve budget cuts; Reform tax policy in a manner that raises sufficient revenues to finance the federal government’s role in providing essential supports, services, and benefits for people with disabilities and their families over the lifespan.

Remember: You are the expert No one knows better than you how important Federal programs are to you and your family Tell your story: Explain how services and supports help you live independently and in the community Explain what cuts to the programs that provide the services and supports you need would mean to you and your family

Questions? Contact: Annie Acosta Richelle Friedman Director of Fiscal and Family Support Policy Director of Public Policy The Arc of the United States Coalition on Human Needs (202)783-2229 202-223-2532 x 114 Acosta@thearc.org rfriedman@chn.org Lisa Ekman Director of Government Affairs NOSSCR 202-550-9996 lisa.ekman@nosscr.org