Nonprofit Take on Obama’s Proposed Budget for FY 2014

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April 10, 2013; Source: The New York Times, “The Caucus”

You knew this day was coming. It had to happen. Yes, President Obama has submitted a proposed budget for Fiscal Year 2014. Admittedly, it is a couple of months late, but just submitting it is an important step, given that the House and Senate budget committees have already drafted and voted on their own visions of federal finances in FY2014. Under normal circumstances, the President’s budget would have come first, then the House and Senate would have grappled with it. This way, there will be three competing budgets on the table—if there’s a table around which they even talk.

Consider this a placeholder on the federal budget. In the next several days, we’re going to find out whether the President’s budget is going to be treated seriously, as it should be, or simply dismissed by Congressional lawmakers as too little, too late, or perhaps, because it is being viewed as a compromise between the Senate (Murray) and House (Ryan) budgets, too wishy-washy.

Nonprofit Quarterly will be doing its own analysis of the budget, comparing it to the nonprofit-specific dimensions we identified in our take (or take-down, as it were) of the Ryan and Murray budgets. We know that the nonprofit sector will be up in arms—again—about the President’s proposed 28 percent deductibility cap on itemized deductions, which include the charitable deduction, but there is of course more to the budget than that. As we note in our analysis of the Council on Foundations public policy agenda, which will appear in the NPQ Newswire tomorrow, the President’s proposal was known for a while to have been in the works. And we know that it has gone nowhere in its previous iterations, and will likely not develop any greater traction as an element of the FY 2014 budget process. But modifications to the charitable deduction could have a life in future tax reform efforts.

As to the President’s specific budget proposals, the budget document includes:

  • Expanded repayment options for student borrowers of federal student loans, with monthly payments capped at no more than 10 percent of their discretionary incomes
  • $1 billion for the Department of Education’s Race to the Top education reform program
  • Significant cuts in healthcare spending, including $19 billion from Medicaid over 10 years, higher payments by Medicare beneficiaries, and reductions in Medicare payments to healthcare providers
  • “Small targeted reductions” in certain healthcare programs, like immunizations and cancer screenings
  • Continued increases in the manufacture and deployment of drones through 2017
  • Guaranteed preschool for all four-year-old children from low- and moderate-income families, to be paid for by an increase in federal cigarette taxes from $1.01 to $1.95 per pack
  • An increase of 4.6 percent in the Department of Education’s discretionary spending
  • $1 billion for 15 “manufacturing hubs” meant to attract foreign businesses to the U.S.

For those readers who have become accustomed to Nonprofit Quarterly’s annual reviews of the President’s budget, let us know what you’re specifically aiming to find out, and we’ll do our best to find out with and for you. Tell us what’s on your budget agenda. Look for our analysis next week.—Rick Cohen

  • Tasasha

    I’m mostly concerned with how working class and poor individuals and families will be affected by any proposed spending cuts to healthcare and safety net programs.

  • Jeanie Morgan

    Living in a somewhat isolated rural community with a large percentage of retirees, I am very concerned about the cuts in medicare reimbursements to providers. Our community has come a long way in the past decade in recruiting and retaining quality medical specialists has been challenging. I fear that many will retire early, practice boutique medicine (catering to cash-pay clients), or leave the area. If our residents have to leave the area for diagnosis and treatment, they may leave the area permanently.

    I think too often our elected officials do not take time to think about the long-term outcomes of decisions they make with too little fact gathering and consideration of likely fallout from any change in policy they might consider.

    Our health-related non-profit does not rely on government grants, and works closely with our local medical community to provide common screenings for under-insured and uninsured individuals at negotiated affordable rates. If the government is going to pull back on some currently authorized screenings, problems may not be discovered until they are very costly to treat. The cost may well be in premature death as well as higher medical costs.

    I fear some of the decisions relative to pulling back from some screenings may have a hidden motive of population control among the aging population. That aging population may be the best human resource we have for overcoming some of our country’s financial fiscal problems.

    I would like to see more spent on early detection screenings, wellness programs, and public health education. Most medical problems treated today are outcomes of lifestyle choices. I don’t want to see personal choices regulated, but do want to see incentives for making good choices..

  • Kelly Kleiman

    I’d like to know more about the Race to the Top and Department of Education discretionary funding: is this more encouragement for the privatization of public education through charter schools? I love the President but he’s dead wrong on this issue and has been from the start, while things in public education get worse and worse.

  • rick cohen

    Kelly, I agree with you. I’ll be digging for this information for my budget report next week.

  • rick cohen

    I’ll do a pretty thorough review of the budget on safety net programs, be assured.

  • David Alexander

    Rick, I’d be very interested to understand more clearly about not just the proposed 28% deductions cap, but also how this cap plays with the Pease limitation and the “Buffett” rule in Obama’s proposed budget. I’d love to see any analysis and figures around the broad expectations from these changes. Thanks.