Via Teleconference

9:03 A.M. EDT

MR. FRIEDLANDER:  Good morning, everyone.  This is Rob from the OMB communications team.  Thanks so much for joining us.  This will be an on-background conference call about the President’s discretionary funding request for fiscal year 2022.

For your awareness but not for reporting purposes, today we’ll be joined by [administration officials].

We’ll begin with some brief comments from [administration official], and then we’ll open it up for a few questions.  As a reminder, today’s call will be conducted on background, attributable to “administration officials,” and embargoed until 11:00 a.m. Eastern time today. 

And with that, I will turn it over to [administration official].

ADMINISTRATION OFFICIAL:   All right.  Thanks, everyone, for joining the call.  As you know, today we’re sending Congress the President’s discretionary funding request for fiscal year 2022.  We wanted to provide you with an overview of the request and talk about how it fits into the President’s broader agenda. 

Our goal in releasing the discretionary request is to provide Congress with the guidance it needs to begin the appropriations process.  This is the process by which Congress determines how taxpayer dollars should be invested in priorities like education, public health, housing, and other areas on an annual basis. 

This year’s appropriations process comes at a particularly important moment.  For the past decade, due to overly restrictive budget caps, our country has underinvested in core public services, benefits, and protections that are incredibly important to our success. 

Since 2010, non-defense discretionary funding has shrunk significantly as a share of the U.S. economy.  For example, going into the pandemic, funding for the CDC was 10 percent lower than a decade ago, adjusted for inflation.  We’re underinvested in programs like Head Start, which served 95,000 fewer children today than it did a decade ago. 

Despite the growing threat of climate change, we’ve cut funding for climate science and technology at EPA by 27 percent since FY2010, adjusted for inflation.  The list goes on.

The administration believes that now is the time to begin reversing this trend and reinvesting in the foundations of our country’s strength.  And let me take a few moments to highlight key investments in the request, and then I can briefly walk through some of the topline numbers.

The request includes a historic investment in high-poverty schools, with a total of $36.5 billion in Title I grants.  This is the largest year-over-year increase since the inception of the Title I program.  It includes six and a half billion dollars to launch the Advanced Research Projects Agencies for Health — or “ARPA-H.”  That investment would have an initial focus on cancer and diseases like diabetes and Alzheimer’s, and ultimately help drive transformational innovation in health research.

It proposes $8.7 billion to help support core public health capacity at CDC, which represents the biggest budget authority increase in nearly two decades.  It invests in tackling the climate crisis — with an increase of more than $14 billion compared to fiscal year 2021 — across nearly every agency to help restore the capacity needed to carry out core climate functions; to secure environmental justice for communities that have been left behind; and to develop — and to help developing countries reduce emissions and adapt to climate.

The request would extend Housing Choice Vouchers to more than 200,000 additional households and provide a $500 million increase for Homeless Assistance Grants to support more than 100,000 additional households. 

It includes $2.1 billion to help the Department of Justice address the gun violence public health crisis through support for existing programs to improve background checks as well as a series of new programs. 

And it includes funding to help end gender-based violence with $1 billion in total funding for the Violence Against Women Act programs — nearly double the 2021-enacted level. 

Those are just a few highlights.  So what does this mean in terms of topline funding levels?  Overall, the President’s request includes $769 billion for non-defense discretionary spending.  That’s a 16 percent increase over fiscal year 2021 enacted levels. 

That level of investment will return this category of spending to 3.3 percent of GDP, roughly the historical average over the last 30 years.  The discretionary request also provides $753 billion for national defense programs — a 1.7 percent increase over the fiscal year 2021 enacted level.

I want to be clear that the request does not include mandatory proposals or tax reforms.  Again, what we’re talking about here is the proposal for fiscal year 2022 discretionary funding only. 

As is standard during transition years, we will release the President’s budget in the months ahead, which will include detailed discretionary proposals, mandatory proposals, and tax reforms as part of a fiscally and economically responsible plan to address the challenges we face.

Now, this discretionary request is obviously one piece of the puzzle.  Last week, you heard the President outline the American Jobs Plan — a comprehensive strategy to create millions of good jobs, rebuild our country’s infrastructure, and position America to outcompete China. 

The discretionary request is a complementary but separate proposal that lays out the President’s funding recommendations for the annual appropriations process.  We want to use every lever at our disposal to address the challenges we face.  And again, the budget we released in the coming months will put forward a unified agenda for the country that will pull all of these pieces together. 

With that, we’ll be happy to take a few questions.

Q    Thanks so much for taking my question.  There’s always this feeling that presidential budgets don’t get passed as they are.  And I wonder if you could walk through what the President — I mean, I know you’re not going to negotiate here, but what are items that maybe he sees as things that are deal breakers that he wants to see with those numbers.  And then, overall, could you talk a bit about what he hopes Congress takes away from this budget, given his priorities? 

ADMINISTRATION OFFICIAL:  Yes.  Thanks so much for the question.  [Redacted.]

One, I think they’re great markers to foretell how the administration views budgets.  And clearly, this President has seen the degradation of budget caps and what they’ve done, especially on the non-defense discretionary side.  I think this is the beginning of a long appropriations process that — however, the President’s budget will influence.  I think it will set a tone.  And I think there are a lot of bipartisan programs you will see highlighted when you take a look through what the President is championing: cancer research — that is a bipartisan interest; violence against women.  

So this is something we hope will start a discussion about the right size of non-defense discretionary.  I think you’ve seen budget deals happen every two years during the Budget Control Act because there was a bipartisan awareness that we were not investing the right amount into those programs. 

However, we were still very limited in what we could invest.  And this budget is intended to right — right the ship, so to say, in a lot of areas I think both parties have shown historic interest in.

Q    Hi, thanks for taking my question.  You kind of looked at this at the end of your remarks, but could you talk a little bit about how much of this proposal reflects spending that would be included in the President’s infrastructure package?  Does it include any of it or is it like completely separate?  Could you maybe give us a little more detail on that?

ADMINISTRATION OFFICIAL:  Yes.  I would go with the “separate” part of your comment as — as the first takeaway I hope you have.  It is separate, certainly complementary.  And what you will see later in the spring when we release the full budget is the administration pulling all of these pieces together to show our total fiscal economic plan, as a budget would normally do. 

But clearly, these are being released in different parts for — to get different processes started.  But — so they are different processes we expect Congress to undertake.  But you will see them all pulled together when we release the full budget.

Q    Good morning.  Thanks for doing this.  I’ve got a couple of questions for you.  One is on the timetable.  When do you anticipate the full budget will be (inaudible)?

And then if you could give us a comparison — you say that you’re restoring, you know, discretionary spending to 3.3 percent of GDP.  What was it before? 

And I’m looking at some of these increases in the tables –so by major agency — and I wonder if you could just annotate that table a little bit.  I mean, we’re seeing there are huge increases for Education; for Commerce; you know, Health and Human Services you’ve talked about a little bit; EPA.  Can you just, sort of, you know, annotate that and sort of say these are — these — what went into that? 

And then, finally, on the defense piece, there’s already criticism from progressive groups saying that after the steep increases in defense spending that were seen during the Trump administration, you know, why do you feel it necessary to increase defense spending at this point?  Thank you.

ADMINISTRATION OFFICIAL:  Yeah, thanks for that.  And I’ll go back to my opening remarks.  We are trying to get non-defense discretionary back to its 30-year historical average.  Clearly, over the last 10 years, that was reduced.  We think it’s appropriate to return that spending back to its 30-year average.  So that is what the intention here is.

I highlighted a few of the programs.  I think you have certainly more in front of you that go into some of the increases.  Certainly, in Education, Title 1, I.D.E.A. is another big investment you’ll see in this budget.  You’ll certainly see the Violence Against Women Act, gun violence prevention. 

So there — you know, we — I think you probably have a package of 39 things.  So, for time, I’ll, you know, refer back to some of the highlights that I covered in my opening remarks.

But on the overall issue of defense spending, we — you know, I think you have to look at – [redacted] — part of what I hope people take away from this is we have to look at both what we’re presenting on the non-defense and defense sides of the equation.  I think part of the complaints had been that there were not the same investment levels on the non-defense side.  That is clearly not the case in this budget request.

On the defense side in particular, we are — a large chunk of that increase is to pay for the pay raise for men and women in troop- — in uniform and the civilians that support them.  I think that’s something we could find support for on both sides of the aisle. 

So we certainly hope people look at the full scope here.  The focus will be on investments on non-defense, but also ensuring the Defense Department can continue its strategic goals as we outcompete China and as we ensure that the men and women in uniform have everything that they need.

Q    Hi, thanks so much for doing this.  I just wanted to ask: This $100 billion or so increase that would add up to over a trillion over a decade — is the expectation that that’s going to be paid for?  I know that the tax part will not come until the full proposal.  But is that something that President Biden is expecting to do to cover that?

And the other thing that I wanted to ask about was whether there is still going to be Overseas Contingency Operations in this request.

ADMINISTRATION OFFICIAL:  So, I’ll start off by talking about the last part of your question on OCO.  As you know, many — both sides of the aisle considered Overseas Contingency a budgetary gimmick, given that, you know, many of the overseas operations that they supported had been around for many, many years.  So we had bipartisan interest in ensuring that those things were accomplished in the baseline defense budget.  That’s what you’ll see presented from us today.  So there will be no — no OCO.

For the other part of your question, I’ll turn that over to my colleague who might provide some additional context.

ADMINISTRATION OFFICIAL:  Sure.  With respect to your question about paying for the discretionary funding levels here: You know, later this spring, we’ll release our full budget, which will include discretionary and mandatory taxes and will show how the full agenda fits together in an economically and fiscally responsible whole.

But just to put these funding levels in context, I want to reiterate what [administration official] said that what we’re — what this proposal would do is restore non-defense discretionary funding, which is the portion of the budget that funds education, research, clean energy, et cetera to its historical average. 

And I do think we’re seeing right now that not doing that, not making those investments has a big cost as well.  You can see the implications of the disinvestment in public health in our communities, in all of the crises that our country is currently facing.

MR. FRIEDLANDER:  Great.  And I think we’ll have time for one more question.

Q    Good morning.  Thanks for doing this.  We’ve heard, over the course of the transition and early in the administration, discussion of how the lack of cooperation from the outgoing administration hampered your ability to, sort of, get to what we would call a “skinny budget” at this point. 

I’m wondering if you can give some specific examples of how what we’re seeing today is more limited because of that.  And I actually, [redacted] — can you talk through what, if any, outreach to the Hill has already happened?  Obviously, you’re sending a letter up to the Hill.  But in terms of developing this budget request, how much was — of Hill consultation is already reflected in this?

ADMINISTRATION OFFICIAL:  Thanks for that.  I mean, look, we — I think the President, you know, I think took an unprecedented step in calling out — OMB was one of those agencies that we would have loved to see more historic cooperation during transition, including, you know, allowing — the past administration did not allow the staff to work with us on budget development, which past administrations had done during transition. 

But, you know, we’re still getting the “skinny,” as you call it — the discretionary funding request up to the Hill.  We’re doing the two-step process that past, you know, first-year administrations have done.

So we’re not going to — we’re not going to harp on, you know, I think well-known — well-known delays.  We’re going to get it done.  And the hope is — not the hope; we will get a budget up — a full budget that reflects a comprehensive plan up in late spring.

So, certainly, faced delays, you know, as you pointed out.  [Redacted.]  But we still — I’m proud of this team coming together and getting this product up to the Hill [redacted].

So we — you know, we — I think those things are — are known.  The President spoke about them.  But I’m happy, and I think the Appropriations Committee can now begin.  And you see they’ve announced hearings, so this process has really kicked off.  We’re glad to see that.

We will continue our Hill outreach today.  But as you know, this is very topline.  So, you know, it’s appropriate that we continue to talk to the Hill as we develop the details of the discretionary bill — or discretionary request.  And we’ll continue to do that over the next couple of months and talk to members on both sides of the aisle. 

MR. FRIEDLANDER:  Great.  And thanks so much, everyone.  I think we’ll have to leave it there for today, but really appreciate everyone joining us.

Just a final reminder: The contents of this call are embargoed until 11:00 a.m. Eastern and attributable to “administration officials.”

Please feel free to get in touch with the communications team if you have any additional questions, and we’ll — we’ll do our best to get back to you. 

And with that, hope everyone has a great Friday and a great weekend.  Thanks very much.

9:22 A.M. EDT

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