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On February 5, 2007, President Bush sent Congress a $2.9 trillion budget proposal for the coming federal fiscal year 2008. With, $2.662 trillion expected in revenues to the federal government in 2008, the deficit for the year would be $239 billion. In addition to proposing funding levels for programs, the budget request also outlines legislative changes that would affect programs and taxes. The President asks Congress to make his previous tax cuts permanent. He also asks for a variety of changes in programs like Medicare, Medicaid, the Workforce system and Education.
Education
Overall, the President proposes $56 billion for Education, just under the $57.5 billion figure in the FFY-2007 Education appropriation proposed by House Democrats (current year funding bills for most federal programs are still going through Congress).
The administration proposes to raise Pell Grants from the current $4,050 to $4,600 next year and $5,400 by 2012.
At the same time, $770 million in Supplemental Educational Opportunity Grants would be eliminated.
Title I, the education program aimed at improving the performance of children from low-income families, would get an added $1.2 billion, this in response to concerns that No Child Left Behind has not adequately funded help for low-income students.
$500 million would go to “School Improvement Grants” to help failing schools develop plans for reversing their failing records.
$300 million would go to school vouchers to help parents send their children to private schools or transfer into schools with better performance records.
Vocational Rehabilitation and Disability Programs
The President’s budget would hold Vocational Rehabilitation State Grants steady at this year’s funding level, $2.837 billion. Usually VR State Grants receive a minor increase similar to a cost-of-living adjustment, but figures in the President's budget show no such adjustment for next year.
Client assistance programs funding would be level at $12 million.
Professional training funds would remain at $38 million.
The budget plan would eliminate all funding for projects with industry, migrant and seasonal farmworker projects, recreational programs, and supported employment state grants.
Independent living funds would remain constant at $130 million.
Assistive technology funds would be reduced to $26 million, down from $30 million this year.
Evaluation funding would increase from $1 million to $2 million.
Funds for the Helen Keller Center would be reduced by $1 million.
The National Institute on Disability and Rehabilitation Research would be level at $107 million.
The American Printing House for the Blind would be level funded at $17.5 million.
The National Technical Institute for the Deaf would be level funded at $56.2 million.
Gallaudet University would be level funded at $107 million.
Special Education
Special Education Basic Grants to states (IDEA Part B) would be reduced by almost $1 billion, from $10.5 billion this year to $9.6 billion next year. Preschool special education grants would be level funded. Early intervention funds would be reduced to the 2006 level.
Special education technology and media grants would be drastically reduced to $25 million, down from this year’s $38 million.
Other national activities under the Special Education umbrella would be level funded. These include parent information centers and personnel preparation.
Workforce Investment Act
Workforce Investment Act programs are part of the U.S. Department of Labor's proposed 2008 budget. The budget document states: "Legislation will be proposed in 2007 to reform the Workforce Investment Act, which legislation would increase State flexibility to administer the programs, require that a greater percentage of resources be directed to training services for workers instead of administrative overhead, increasing individual choice by offering Career Advancement Accounts and to streamline the performance accountability system.
The proposal would consolidate Adult, Dislocated Worker, Youth Activities, the Work Opportunity Tax Credit (WOTC), labor market information and Employment Service Grants into a single State Grant (i.e., block grant) to facilitate coordination and eliminate duplication in the provision of services. The new Consolidation Grant will be shown in the Training and Employment Services account." Funds for these consolidated programs would be reduced from this year’s $5.4 billion to $4.6 billion in 2008.
Community Service Employment for Older Americans would be reduced from $432 million to $350 million.
The DOL Office of Disability Employment Policy would be cut from $28 million this year to $19 million next year.
Health
In the U.S. Department of Health and Human Services, many programs would be level funded, a few increased and several cut or eliminated. HIV/AIDS would receive a slight increase to $2.133 billion.
Funds for newborn hearing screening would go from $10 million to zero.
Several rural health programs would be eliminated, including Rural Health Outreach Grants and Flexibility Grants. Traumatic brain injury programs would be eliminated (from $10 million to zero). Also eliminated would be the free clinics medical malpractice program.
Funding for the Centers for Disease Control and Prevention would be reduced by $34 million. The Preventative Health and Health Services Block Grant now funded at $99 million would be eliminated. Global health programs would be significantly increased.
The National Institutes of Health would receive a slight overall increase in funding.
The Substance Abuse and Mental Health Services Administration would receive a slight cut.
Social Services
Funding for the Low-Income Home Energy Assistance Program would be reduced by about $400 million.
Funds to the Administration on Aging would be slightly reduced.
The Social Services Block Grant would be cut by $500 million.
State Councils on Developmental Disabilities would receive level funding at $72 million. Protection and Advocacy for People with Developmental Disabilities, projects of national significance and university centers for excellence would all be level funded.
Abstinence education would receive an increase from $109 million to $132 million.
The President’s budget decreases funding for the Community Development Block Grant from the current year $4.355 billion to $2.619 billion in 2008. The Administration will also put forth legislation to reform CDBG and change the formula for distributing CDBG funds to states and communities.
Medicare and Medicaid
The budget plan aims to save $101.5 billion in Medicare and Medicaid over five years. It would save about $39 billion by limiting annual inflation adjustments in Medicare reimbursement rates for hospitals, nursing homes and medical providers. It would increase Medicare premiums for higher income persons. Several other changes in Medicare would result in reduced payment rates for medical providers. For example, payments would be reduced to providers who fail to submit price and quality data to Medicare. The Medicare Part D prescription drug program would set premiums based on a person’s income.
$26 billion in Medicaid savings over five years are proposed. There would be some reduced reimbursement for administrative costs (leaving more for states to pick up). Pharmacy reimbursements would be reduced. Medicaid funds for some school-based services would be reduced. $2.2 billion would be saved by changing coverage for rehabilitation services. These and other provisions would reduce the growth in Medicaid spending.
The President would increase funding for the Children’s Health Insurance Program by $5 billion over 5 years. Children’s health advocates estimate $12 billion would actually be needed to maintain coverage of the children now on SCHIP. The budget proposal would also limit SCHIP eligibility to children in families with annual incomes less than 200% of the federal poverty level, or about $38,000 for a family of four.
Next Steps
Congress will consider the President's budget plan and undoubtedly offer many changes to it. Final decisions by lawmakers will depend on many factors, including what they hear from constituents who support or oppose items in the Administration's budget.
The President’s detailed budget proposal can be found at: http://www.gpoaccess.gov/usbudget/fy08/appendix.html .
Jean H. Jones
DVR/DVS Legislative Information Rep.
Department of Rehabilitation Services
3535 NW 58, Suite 500
Oklahoma City, OK 73112
Phone: 405-951-3488
Toll Free: 800-845-8476
Fax: 405-951-3529
Email: jhjones@drs.state.ok.us