President Submits FY18 Budget Request to Congress

President Trump submitted his FY18 budget request, “The New Foundation for American Greatness,” to Congress this week. The budget proposes $607B in defense discretionary spending and $560B in non-defense discretionary spending for FY18. The spending caps in the 2011 Budget Control Act are $549B for defense and $515.6B for nondefense.

The President’s budget relies on more than $2T in added revenue over the decade by betting on 3% growth in the latter half of the decade as compared to an average annual of 1.9% forecast by the Congressional Budget Office (CBO). It also includes $1.5T in nondefense discretionary cuts and $1.4T in Medicaid cuts over the next 10 years while adding $489B to defense spending. Cuts are proposed for all federal departments except for the Department of Defense (DOD), Veterans Affairs, and Homeland Security.

President Trump’s FY18 Budget Request By Agency

(in millions)

Department or other unit 2016 2017 estimate 2018 estimate
Legislative Branch 4,440 4,432 5,037
Judicial Branch 6,773 6,760 7,220
Department of Agriculture 25,798 24,575 18,019
Department of Commerce 9,280 9,237 7,776
Department of Defense–Military Programs 580,290 618,758 639,114
Department of Education 68,307 68,177 58,989
Department of Energy 29,705 29,720 23,348
Department of Health and Human Services 85,849 79,224 66,820
Department of Homeland Security 47,893 51,143 50,858
Department of Housing and Urban Development 36,483 35,515 31,211
Department of the Interior 13,238 13,177 11,740
Department of Justice 28,750 16,986 16,402
Department of Labor 12,171 12,147 9,742
Department of State 28,663 30,521 22,450
Department of Transportation 18,573 19,605 16,236
Department of the Treasury 12,635 11,741 11,221
Department of Veterans Affairs 70,871 74,492 78,841
Corps of Engineers–Civil Works 6,102 7,005 5,002
Other Defense Civil Programs 274 233 233
Environmental Protection Agency 8,139 8,245 5,653
Executive Office of the President 397 405 406
General Services Administration 631 248 510
International Assistance Programs 23,963 25,947 17,582
National Aeronautics and Space Administration 19,285 19,323 19,092
National Science Foundation 7,463 7,449 6,654
Office of Personnel Management 274 273 312
Small Business Administration 871 868 826
Social Security Administration (On-Budget) 4,776 4,908 5,185
Social Security Administration (Off-Budget) 5,674 5,284 5,341
Other Independent Agencies (On-Budget) 8,876 8,760 5,621
Other Independent Agencies (Off-Budget) 264 264 249
Allowances ………. -13,587 -1,065
Total discretionary budget authority 1,166,708 1,181,835 1,146,625


President Trump’s fiscal 2018 budget proposal would completely eliminate 66 federal programs, for a savings of $26.7 billion. Some of the programs would receive funding for 2018 as part of a phasing-out plan. Here are the programs the administration wants on the chopping block:

Agriculture Department — $855 million

McGovern-Dole International Food for Education

Rural Business and Cooperative Service

Rural Water and Waste Disposal Program Account

Single Family Housing Direct Loans

Commerce Department — $633 million

Economic Development Administration

Manufacturing Extension Partnership

Minority Business Development Agency

National Oceanic and Atmospheric Administration Grants and Education

Education Department — $4.976 billion

21st Century Community Learning Centers

Comprehensive Literacy Development Grants

Federal Supplemental Educational Opportunity Grants

Impact Aid Payments for Federal Property

International Education

Strengthening Institutions

Student Support and Academic Enrichment Grants

Supporting Effective Instruction State Grants

Teacher Quality Partnership

Energy Department — $398 million

Advanced Research Projects Agency—Energy

Advanced Technology Vehicle Manufacturing Loan Program and Title 17 Innovative Technology Loan Guarantee Program

Mixed Oxide Fuel Fabrication Facility

Health and Human Services — $4.834 billion

Agency for Healthcare Research and Quality

Community Services Block Grant

Health Professions and Nursing Training Programs

Low Income Home Energy Assistance Program

Homeland Security — $235 million

Flood Hazard Mapping and Risk Analysis Program

Transportation Security Administration Law Enforcement Grants

Housing and Urban Development — $4.123 billion

Choice Neighborhoods

Community Development Block

HOME Investment Partnerships Program

Self-Help and Assisted Homeownership Opportunity Program Account

Interior Department — $122 million

Abandoned Mine Land Grants

Heritage Partnership Program

National Wildlife Refuge Fund

Justice Department — $210 million

State Criminal Alien Assistance Program

Labor Department — $527 million

Migrant and Seasonal Farmworker Training

OSHA Training Grants

Senior Community Service Employment Program

State Department and USAID — $4.256 billion

Development Assistance

Earmarked Appropriations for Non-Profit Organizations

The Asia Foundation

East-West Center

P.L. 480 Title II Food Aid

State Department, USAID, and Treasury Department — $1.59 billion

Green Climate Fund and Global Climate Change Initiative

Transportation Department — $499 million

National Infrastructure Investments (TIGER)

Treasury Department — $43 million

Global Agriculture and Food Security Program

Environmental Protection Agency — $493 million

Energy Star and Voluntary Climate Programs

Geographic Programs

National Aeronautics and Space Administration — $269 million

Five Earth Science Missions

Office of Education

Other Independent Agencies — $2.683 billion

Chemical Safety Board

Corporation for National and Community Service

Corporation for Public Broadcasting

Institute of Museum and Library Services

International Development Foundations

African Development Foundation

Inter-American Foundation

Legal Services Corporation

National Endowment for the Arts

National Endowment for the Humanities

Neighborhood Reinvestment Corporation

Overseas Private Investment Corporation

Regional Commissions

Appalachian Regional Commission

Delta Regional Authority

Denali Commission

Northern Border Regional Commission

U.S. Institute of Peace

U.S. Trade and Development Agency

Woodrow Wilson International Center for Scholars

Federal Agency FY18 Budget Document Links

White House Budget Documents






Environmental Protection Agency

Federal Communications Commission

Health and Human Services

Homeland Security

Housing and Urban Development





National Science Foundation

Small Business Administration

Social Security Administration




Veterans Affairs

Rep. Thornberry Introduces Defense Acquisition Reform Bill

House Armed Services Committee Chairman Mac Thornberry (R-TX) introduced his latest acquisition reform bill this week. The Defense Acquisition Streamlining and Transparency Act (HR 2511) is the third installment of the committee’s acquisitions reforms initiatives. This year’s bill has four titles that focus on the following goals: empowering the Department of Defense (DOD) to use E-Commerce marketplaces for purchasing commercial-off-the-shelf items, reforming the defense contract audit process and the acquisition of services, strengthening the accountability and professionalization of the DOD acquisition workforce, and improving transparency by empowering data-driven decisions.

This discussion draft is intended to inform provisions to be offered in the FY18 National Defense Authorization Act.

H.R. 2511 Bill Text:

Cover Memo and Section-by-Section Description:

Fact Sheet:

Draft NIST Cybersecurity Framework Implementation Guide for Federal Agencies

The National Institute of Standards and Technology (NIST) issued for public comment a draft version of a cybersecurity framework implementation guide for federal agencies, in support of President Trump’s new cybersecurity executive order that requires federal agencies adopt the NIST framework.

The report illustrates eight use cases in which federal agencies can leverage the Cybersecurity Framework to address common cybersecurity-related responsibilities.
The eight use cases are:
  1. Integrate Enterprise and Cybersecurity Risk Management 
  2. Manage Cybersecurity Requirements
  3. Integrate and Align Cybersecurity and Acquisition Processes 
  4. Evaluate Organizational Cybersecurity
  5. Manage the Cybersecurity Program
  6. Maintain a Comprehensive Understanding of Cybersecurity Risk 
  7. Report Cybersecurity Risks
  8. Inform the Tailoring Process 
Comments are due by June 30, 2017.

Draft NISTIR 8170 The Cybersecurity Framework


President Signs Cybersecurity Executive Order

The President signed his long-delayed cybersecurity executive order (EO) today.

Section 1: Cybersecurity of Federal Networks
The first section of the EO is focused on strengthening the cybersecurity of federal networks. It says that the President will hold the heads of executive departments and agencies accountable for managing cybersecurity risk of their enterprises, but it does not include any consequences. The agency heads will also be accountable for ensuring that cybersecurity risk management processes are aligned with strategic, operational, and budgetary planning processes. This section calls for the following:
  1. Agency heads are directed to use the National Institute of Standards and Technology (NIST) Framework to manage the agency’s cybersecurity risk, and they will provide a management report to the Department of Homeland Security (DHS) Secretary and Office of Management and Budget (OMB) Director within 90 days (due 8/9/17). The report will document the risk mitigation and acceptance choices made by each agency including the strategic, operational, and budgetary considerations that informed those choices and any accepted risk. The report will also include the agency’s action plan to implement the NIST Framework. The DHS Secretary and OMB Director will then assess each report to determine if the choices are appropriate and sufficient, and within 60 days (latest 10/8/17) of receipt then submit a report to the President (through the Assistant to the President for Homeland Security and Counterterrorism). The report for the President will include the determination and plan to protect the executive branch, budgetary needs, a regular process for reassessing future unmet budgetary needs, and policy, standards and guidelines that are aligned with the NIST Framework. The agency risk reports could be classified in full or in part.
  2. In order to build and maintain resilient federal IT architecture, agency heads should show preference for shared IT services including email, cloud, and cybersecurity services. The Director of the American Technology Council will issue a report within 90 days (due 8/9/17) with the DHS Secretary, OMB Director, GSA Administrator and Commerce Secretary that will describe the legal, policy, and budgetary considerations for federal agencies to transition to consolidated network architectures and shared IT services.
  3. For any National Security System, the Secretary of Defense and Director of National Intelligence (DNI) will implement the EO to the “maximum extent feasible and appropriate.” They will provide a report to Assistant to the President for National Security Affairs and the Assistant to the President for Homeland Security and Counterterrorism within 150 days (due 10/8/17).
Section 2: Cybersecurity of Critical Infrastructure (CI)
The second section of the EO focuses on strengthening the cybersecurity of our nation’s critical infrastructure (CI). The President asserts that it is the administration’s policy to support the cybersecurity risk management efforts of the owners and operators of our nation’s CI. This sections calls for the following:
  1. The DHS Secretary in coordination with the Secretary of Defense, Attorney General, DNI, FBI Director, the heads of appropriate sector-specific agencies, and other appropriate agency heads will identify the authorities and capabilities that federal agencies could employ to support the cybersecurity efforts of CI entities and determine whether and how the authorities and capabilities might be employed. They will provide the President with a report within 180 days (due 11/7/17) that may be classified in full or in part. They will be required to provide an updated report to the President on an annual basis thereafter.
  2. The DHS Secretary and Secretary of Commerce will provide a report to the President that examines the sufficiency of existing federal policies and practices to promote appropriate market transparency of cybersecurity risk management practices by CI entities (focused on publicly traded CI entities) within 90 days (due 8/9/17).
  3. The DHS Secretary and Commerce Secretary will identify and promote action by appropriate stakeholders to improve the resilience of the internet and communication ecosystem to ensure resilience against botnets and other automated, distributed threats and will make publicly available a draft report within 240 days (due 1/6/18). And within a year, they will submit a final version of this report to the President.
  4. The Secretary of Energy and DHS Secretary will assess the potential scope and duration of a prolonged power outage associated with a significant cyber incident, the readiness of the US to deal with an incident, and gaps in assets and capabilities to mitigate consequences of such an incident. The assessment will be provided to the President within 90 days (due 8/9/17).
  5. The Secretary of Defense, DHS Secretary, and FBI Director will provide a report to the President within 90 days (due 8/9/17) that outlines the cybersecurity risks facing the defense industrial base, including its supply chain, and the U.S. military platforms, systems, networks, and capabilities. The report will also include recommendations for mitigating these risks. The report may be classified in full or in part.
Section 3: Cybersecurity for the Nation
Finally, the third section of the EO focuses on cybersecurity for the nation. The administration wants to promote and open, interoperable, reliable, and secure internet as well as support the growth and sustainment of a cybersecurity workforce. This section calls for the following:
  1. The Secretary of State, Treasury Secretary, Defense Secretary, AG, Commerce Secretary, DHS Secretary, and U.S. Trade Representative will issue a report to the President within 90 days (due 8/9/17) on the nation’s strategic options for deterring adversaries and better protecting the American people from cyber threats.
  2. The Secretary of State, Treasury Secretary, Defense Secretary, Commerce Secretary, and DHS Secretary will issue reports to the President within 45 days (due 6/25/17) on their international cybersecurity priorities including those concerning investigation, attribution, cyber threat information sharing, response, capacity building, and cooperation. Within 90 days of submitting the reports, the Secretary of State shall provide a report to the President documenting an engagement strategy for international cooperation in cybersecurity.
  3. The Secretary of Commerce and the DHS Secretary will jointly assess the scope and sufficiency of efforts to educate and train the American cybersecurity workforce. Within 120 days (due 9/8/17), they will provide a report to the President with their findings and recommendations.
  4. The DNI will review the workforce development efforts of potential foreign cyber peers in order to develop best practices and within 60 days (due 7/10/17) provide a report to the President on his findings.
  5. The Secretary of Defense will assess the scope and sufficiency of U.S. efforts to  maintain or increase its advantages in national security-related cyber capabilities and issue a report within 150 days (due 10/8/17) to the President with his findings and recommendations.

Presidential Executive Order on Strengthening the Cybersecurity of Federal Networks and Critical Infrastructure


House Passes American Health Care Act Repealing Obamacare

The House passed a bill, HR 1628, to repeal and replace the Affordable Care Act (“Obamacare”) on Thursday by a vote close vote of 217 to 213. Twenty Republicans and all 193 Democrats voted against the measure. Rep. Dan Newhouse (R-WA) did not vote as he is attending to his wife while she battles cancer.

The American Health Care Act (AHCA) would repeal most of the subsidies and penalties imposed under Obamacare thereby removing the mandate for Americans to obtain health insurance. The AHCA does the following:

  • Replaces the individual mandate with allowing insurers to charge a 30% premium surcharge on people who have been uninsured for about two months.
  • Eliminates Obamacare taxes that were used to fund the law – a 3.8% investment tax on people earning more than $250,000, a 0.9% surcharge on individuals in the same high-income bracket, and taxes on health insurers, medical device manufacturers, drug manufacturers, and tanning bed salons.
  • Cuts Medicaid spending by $880B over 10 years.
  • Defunds Planned Parenthood and other abortion providers for one year by blocking Medicaid reimbursement. The bill also includes a measure that would prohibit federal tax credits from being used to pay for insurance that covers abortion services.
  • Allows insurers to charge older Americans up to five times as much as it does a 21-year old, this is up from the three times as much limit imposed by Obamacare.
  • Allows states to opt out of the essential health benefits required by Obamacare. More specifically, insurers could charge sick patients more for coverage if the state sets up high-risk pools so that people with pre-existing conditions would have access to coverage. The bill provides states with an additional $8B in funding to set up the high-risk pools. It is unclear how many states will choose to opt out of the essential benefits if the bill is signed into law.
  • Allows large employers to choose the benefits available in a state that sought a waiver from the ACA’s benefit requirements as they aren’t bound by the benefits mandated by their state. Employers looking to lower their costs could choose a state that would allow them to impose lifetime limits and eliminate the out-of-pocket cost cap from their plans.

The House also passed a separate bill (HR 2192) that would remove a provision regarding exemptions for members of Congress and their staff from state waivers.

The twenty Republicans voting against the AHCA in the house were: Reps. Andy Biggs (Ariz.), Mike Coffman (Colo.), Barbara Comstock (Va.), Ryan Costello (Pa.), Charlie Dent (Pa.), Dan Donovan (N.Y.), Brian Fitzpatrick (Pa.), Jaime Herrera Beutler (Wa.), Will Hurd (Tx.), Walter Jones (N.C.), David Joyce (Ohio), John Katko (N.Y.), Leonard Lance (N.J.), Frank LoBiondo (N.J.), Thomas Massie (Ky.), Pat Meehan (Pa.), Dave Reichert (Wa.), Ileana Ros-Lehtinen (Fla.), Chris Smith (N.J.) and Mike Turner (Ohio). Coffman, Lance, Reichert, and Turner changed their votes from what was expected last time. Nine of these members are in congressional districts that voted for Hillary Clinton in November. They are all likely to be targeted by Democrats in 2018.

The bill now heads to the Senate where Republicans hold a majority with 52 seats where we can expect to see a much slower pace. They can’t afford to lose more than two Senators to get the bill passed. Vice President Mike Pence would cast the deciding vote in a 50-50 tie.

Senate Majority Leader Mitch McConnell (R-KY) has convened a working group that includes members of his leadership team, moderates concerned about the Medicaid rollback, conservatives who are interested in states’ rights, and two key committee chairmen – Senate Finance Committee Chairman Orrin Hatch (R-UT) and Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-TN) – to work out a compromise. McConnell had originally planned to bring the House bill directly to the Senate floor, but now wants to vet it through the working group to ensure that they have the votes necessary for passage. Bypassing the committees has been a concern to some Senate Republicans who would prefer that they hold hearings and pursue repeal and replace through regular order. Other Senators are insisting on a cost estimate and analysis from the Congressional Budget Office before voting on their bill.

The more deliberative pace in the Senate could have an effect on the FY18 appropriations process. Congress may delay passing an FY18 budget resolution that would set spending limits until they finish the health care measure using the FY17 budget reconciliation process. It isn’t clear yet if adopting an FY18 budget resolution before the health care bill is passed risks losing the protections of reconciliation and opens a door to a potential filibuster. Rather than test the rules, Republicans may opt to put an FY18 budget resolution on the back burner until they finish health care reform.

American Health Care Act:

American Health Care Act Report Language:

Amendment #32 Reps. Gary Palmer (R-LA) and David Schweikert (R-AZ)

The amendment creates a $15 billion risk sharing program to help states lower premiums for health coverage offered in the individual market.



Amendment #33 Rep. Thomas MacArthur (R-NJ)

The amendment allows states to waive essential health benefits, age rating, and community rating. Health insurers would not be allowed to [deny coverage,] discriminate based on gender or [limit access based on] preexisting conditions. States must explain how the waiver will reduce average premiums for patients, increase enrollment for residents, stabilize the state’s health insurance market, stabilize premiums for individuals living with preexisting conditions, or increase patients’ health care plan options.



Amendment #34 Rep. Fred Upton (R-MI)

The amendment increases the Patient and State Stability Fund by $8 billion from 2018 to 2023 to States with an approved community rating waiver, as established by the MacArthur Amendment, for providing assistance to reduce premiums or other out-of-pocket costs to individuals who may who may be subject to an increase in their monthly premium rates as a result of the States waiver. The amendment also resolves two minor technical drafting amendments, including the correction of an inaccurate cross-reference and to ensure proper labeling of subsections.



Amendment #4 Reps. Greg Walden (R-OR) and Kevin Brady (R-TX)

This amendment makes technical changes to conform with reconciliation instructions and address other drafting issues.



Amendment #24 Reps. Greg Walden (R-OR) and Kevin Brady (R-TX)

This amendment makes technical changes to address drafting issues.



Amendment #5 Reps. Greg Walden (R-OR) and Kevin Brady (R-TX)

This amendment provides for the inclusion of additional policies affecting both Medicaid and the tax code.


Amendment #25 Rep. Greg Walden (R-OR)

This amendment makes technical changes to address drafting issues.


Amendment #31 Rep. Greg Walden (R-OR) and Kevin Brady (R-TX)

This amendment delays the repeal of the additional .9 percent Medicare tax on high-income earners, require states to establish their own essential health benefits standards for purposes of the premium tax credit, and provide additional funding for the Patient and State Stability Fund for mental health and substance use disorders and maternity care.



Congressional Research Service Report on the AHCA: