1. Federal Budget Update: FY 2012 and the BCA National Grants Partnership November 15, 2011 Federal Funds Information for States

2. Wrapping Up FY 2012 When? – CR runs through 11/18/11 How? – Omnibus? Minibus(es)? Individual bills? At what cost to states? – Summary on next page – Program detail at: http://www.ffis.org/node/2493http://www.ffis.org/node/2493

3. FY 2012 Appropriations: At What Cost to States? FY 2012 Funding for Major Discretionary Programs Compared to FY 2011 Federal AgencyPresidentHouseSenateCR Department of Education4.8%2.1%0.2%-1.5% Department of Health & Human Services-0.9-4.4-3.2-1.5 Department of Housing & Urban Development4.8-2.4-3.0-1.5 Department of Energy/EPA7.9-41.80.0-1.5 Department of Justice3.8-65.9-19.0-1.5 Department of Homeland Security31.2-19.0-31.1-1.5 Department of Labor5.3-35.7-0.5-1.5 Department of Transportation58.4-31.50.7-1.5 TOTAL - Major Discretionary Grants21.0%-13.5%-1.4%-1.5%

4. Overview: Budget Control Act of 2011 Three components with potential to affect future funding for grant programs: Discretionary spending caps w/adjustments (done) Joint Select Committee on Deficit Reduction (in process) – 12 members: 3 from each chamber, party – Identify 10-year deficit reduction of at least $1.2 trillion through any means – November 23, 2011 deadline for recommendations and JSC vote, December 23 for congressional approval, and January 15, 2012 for enactment Sequestration process (potential)

5. Discretionary Spending Caps

6. JSC: Medicaid/Health Care Options Comparison of Deficit-Reduction Proposals' Impact on States Policy Bowles- Simpson Domenici- Rivlin Ryan/House Budget ResolutionObamaCBO BCA 2011 Medicaid/Health Care: Dual eligibles in Medicaid managed careYYNANNJSC Cap/reduce Medicaid admin fundingYYImplicitNNJSC Expedites Medicaid waiversYNA YNJSC Limit health spending growthY, GDP+1%YY Y, GDP*.5 (Medicare)NJSC Mandate state cap on noneconomic malpracticeNYNNYJSC End/alter Medicaid match systemNYY "Blended rate" with recession triggerYJSC Convert Medicaid to a block grantNNYNY, LTCJSC Curb or eliminate Medicaid provider taxesYNAImplicitYNJSC Repeal/modify ACA/health care reformNNYY (PPHF)YJSC

7. JSC: Other Options Policy Bowles- Simpson Domenici- Rivlin Ryan/House Budget ResolutionObamaCBO BCA 2011 Other: Cover S/L workers in Social SecurityYYNNYJSC Convert SNAP to block grantNNYNNJSC Consolidate job-training programsNA*YNNJSC Reduce Pell Grant fundingNA*YNYJSC Consolidate highway programsNA*Y Y per FY 2012 budget Reduce fundingJSC Eliminate funding for high-speed railNA*YNYJSC Eliminate/reduce abandoned mines payments to statesY*NYNJSC Comparison of Deficit-Reduction Proposals' Impact on States

8. “Illustrative” List of Program Eliminations, Reductions Educational Technology State GrantsTargeted Water Infrastructure Grants Election Reform GrantsTech Prep Consolidation Emergency Operations Center Grant ProgramWastewater and Drinking Water SFRs Energy Conservation ProgramsCommunity Development Block Grant (CDBG) FNS - Commodity Supplemental Food ProgramEven Start Family Literacy Program Leveraging Educational Assistance Partnership (LEAP) Home Investment Partnerships Programs New Starts Transit ProgramHomeland Security, High-Risk Communities Neighborhood Reinvestment CorporationFederally Assisted Housing Regional Development AgenciesRent Subsidies Resource Conservation and Development ProgramDepartment of Justice programs (State and Local Law Enforcement Assistance, Justice Assistance, Juvenile Justice, COPS, and Violence Against Women) Safe and Drug-Free SchoolsNew Housing Construction for the Elderly Senior Community Service Employment ProgramsNew Housing Construction for Persons with Disabilities State Criminal Alien Assistance Program (SCAAP)Rural Water and Waste Disposal Supplemental Educational Opportunity GrantsTimber sales Surface Transportation Priorities

9. Possible Scenarios: FY 2013 Joint Select Committee 10/14/11 H/S Comm. Submit Items 11/23/11 Report Released Sequester Partial or Full? < $109B/yr. (split equally between defense and nondefense) 12/23/11 H/S Vote President

10. Sequestration Automatic ATB cuts if joint committee process fails to produce at least $1.2 trillion in deficit reduction. Split evenly between defense, nondefense. Includes mandatory spending with several exceptions. Effective in January 2013 for FY 2013 and beyond. Medicare cuts capped at 2%. Too soon to know if, when, or at what level a FY 2013 sequester would occur.

11. What We Can Say About a Sequester

12. Impact on States FY 2012: states could do better under a CR than under any other scenario FY 2013+ hinges on JSC – If it succeeds, what will it recommend? – If it fails, how will ATB cuts be applied to individual programs? – Is it meant only as a bridge to get through the 2012 election?

13. The End Questions? Check for updates at www.ffis.org.www.ffis.org Most states subscribe to FFIS. Contact us for your password and to be added to the distribution list: ttomsic@ffis.org, 202-624-8577. ttomsic@ffis.org