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Federal Budget Update: What to Expect in FY 2015 and Beyond

Federal Budget Update: What to Expect in FY 2015 and Beyond. NCPHA Spring Conference Raleigh, NC May 13, 2014. Federal Funds Information for States www.ffis.org. Overview. The federal budget and how it works What to expect this year FY 2015 appropriations

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Federal Budget Update: What to Expect in FY 2015 and Beyond

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  1. Federal Budget Update: What to Expect in FY 2015 and Beyond NCPHA Spring Conference Raleigh, NC May 13, 2014 Federal Funds Information for States www.ffis.org

  2. Overview • The federal budget and how it works • What to expect this year • FY 2015 appropriations • Mandatory sequestration (across-the-board cuts) • Issues to watch • Deficit reduction, changes to Budget Control Act (BCA) • ACA program expirations

  3. Where the money goes: pieces of the federal budget pie Composition of Federal Outlays in FY 2013($ in Billions, % of Total)

  4. Trends in state grant funding Source: FFIS Grants Database

  5. Federal grants going to North Carolina: per capita, 2013

  6. What programs areas are supported by state/local grants?

  7. Federal grants going to North Carolina: share of funding by function

  8. What are the major health grants?

  9. Types of grants

  10. Mandatory vs. discretionary health grants

  11. Health Care Reform Mandatory Funding • Amended uncapped entitlements (Medicaid) • Reauthorized capped entitlements (CHIP) • Directly appropriated funding for new and existing programs Discretionary Funding • Extended authorization of existing programs • Authorized new programs that must receive annual approp. • Creative funding mechanisms (Prevention and Public Health Fund, initial direct appropriations)

  12. What agencies have benefited from Prevention and Public Health Fund?

  13. Focus on FY 2015: Budget Control Act (BCA) Recap • $984 billion in cuts through FY 2021 (~$109 billion/year, half from defense, half from nondefense) • FY 2013 sequestration occurred on March 1, 2013 • “Fix” reduced cuts from $109b to $85b • Many mandatory and a few discretionary programs are exempt (special rules for some programs) • ATB cuts in FY 2013, different process for FY 2014+ • Bipartisan Budget Act (BBA) provided some sequester relief in FY 2014 and FY 2015

  14. House, Senate, President Adhering to BBA in FY 2015

  15. Status of FY 2015 Appropriations • House is moving appropriations bills, Senate plans to begin in mid-May • 302(b) allocations • Easy bills moving first • Aggressive timetable • Many state grants likely to be level-funded • Prediction: Labor/HHS/Education will not be among the bills passed before October 1

  16. How have major health grants fared?

  17. Budget proposals to watch • Extend Medicaid primary care payment increase • Potential cuts to public health programs because of new coverage under ACA • Refugee Assistance, Access to Recovery, State High-Risk Pool, Section 317 Immunizations, and National Breast and Cervical Cancer Early Detection • Additional funding for substance abuse/mental health • Reductions to the Prevention and Public Health Fund

  18. BCA still the law of the land • Amended discretionary caps enforced by sequestration • Mandatory sequestration still in place • BBA extended to FY 2023 • President proposes repeal, Congress unlikely to agree • ATB percentages applied to current-law levels

  19. Mandatory programs: FY 2015 OMB sequestration estimates

  20. What happens after FY 2015?

  21. Pressure to tackle deficit diminishing, long-term issues remain Source: CBO Budget and Economic Outlook, 2/14

  22. House and President take different approaches to deficit reduction • Discretionary caps • President’s budget increases defense and nondefense • House cuts nondefense and shifts savings into defense • Mandatory programs (health care spending) • President’s budget (-$400 billion/10yrs.): Medicare changes • House (-$3 trillion/10 years): repeals ACA, converts Medicaid into block grant, modifies Medicare • Tax Policy • President’s budget increases revenues, doesn’t include comprehensive tax reform • House proposes revenue-neutral tax reform

  23. Deadlines on the horizon

  24. Deadlines on the horizon

  25. More questions than answers • FY 2015: states can expect level funding for most programs; little chance of major legislation • FY 2016: • BCA: discretionary funding increases; many open questions • Will Congress amend the caps? Up or down? • Will deficit reduction be a focus? • Will ACA programs be extended? • The policies will stem from the politics.

  26. Questions? For more information: www.ffis.org, Trinity Tomsic (ttomsic@ffis.org )

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