Ah… the multi-million dollar question. This has been a hot topic in our world over the past two weeks. An impending new administration always raises a degree of uncertainty in the prediction of federal funding allocations, but perhaps none quite like the 2016 election.
First, it’s important to remember the “checks and balances” system on which our great nation was founded. The U.S. government’s “separation of powers” structure is designed to ensure that no single branch of government (executive, legislative, or judicial) has more authority than the other. (Remember those middle school U.S. history classes?). Pragmatically, however, the legislative branch (Congress and the House of Representatives) is the gatekeeper for federal discretionary grant programming authority. With internal division within both houses of the legislative branches, however, we’re in for an interesting ride.
So… what should we expect from our newly elected leaders? Let’s start with the executive branch. Without a history in public office, there isn’t a voting record on which to base our President-Elect’s likely decisions regarding discretionary grant funds. Sure, we know where our new leader stands on such key issues as taxes, immigration, trade deals, public safety, and health care, but we’ve already seen a softening of the heated rhetoric that dominated the campaign. Industry experts such as M. Linda Wastyn, Ph.D. and Rob Bradner predict increased discretionary spending in the areas of defense, infrastructure, police officer training, health care safety nets, and blue collar jobs initiatives.
With one party dominating the executive and legislative branches, the President’s priorities are more likely to advance than if either (or both) Houses were of the opposing party. However, change happens slowly in Washington. Very slowly. For example, we still don’t have approved budgets for fiscal years (FY) 2016 or 2017, and we’re two months into FY17 already. (That’s right…America never had an approved budget for the last FY.) Federal agencies are currently operating on a “continuing resolution” (a short-term extension of funds at FY16 levels), an extension that is currently scheduled to expire on December 9, 2016 but will likely extend through March 31, 2017.
The federal budgeting process is likely to take even longer as the powers-that-be work to integrate the new President’s initiatives…which then need to be approved by Congress. Further, there are other considerations affecting the amount of funds in the federal coffer, and it’s not just our taxes. The federal debt limit is scheduled to be reinstated on March 16, 2017 and our elected leaders have an important decision to make about our legal borrowing limit and its effect on the government’s finances for years to come. Major health care spending decisions in the coming year—including Obamacare and expiration of the Children’s Health Insurance Program (CHIP)—will also impact the availability of discretionary resources.
In the meantime, we should find hope in the promising trend of increased federal discretionary grant spending over the past several years. According to www.usaspending.gov, federal discretionary spending more than doubled (55%) between FY08 and FY16.
Bottom line, knowing how quickly decisions are made in Washington (ha!), we have some time to adjust to the new administration. While we’re not expecting major changes until FY18 at best, it’s not too late to start creatively adapting. For example, did you know that the Department of Defense (DOD) is a significant contributor to health care research funding? With a likely increase in defense spending, we’re encouraging our health care clients to become familiar with the DOD’s grant programs and processes. We also recommend establishing and strengthening partnerships with health care safety net providers since there will likely be increased funding in that area (likely at the expense of other health care grant programs).
Stay tuned for future posts on this important topic!