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BUDGET
OF THE U.S. GOVERNMENT

FISCAL YEAR 2017

OFFICE OF MANAGEMENT AND BUDGET

BUDGET
OF THE U.S. GOVERNMENT

FISCAL YEAR 2017

OFFICE OF MANAGEMENT AND BUDGET
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THE BUDGET DOCUMENTS
Budget of the United States Government, Fiscal
Year 2017 contains the Budget Message of the President,
information on the President’s priorities, and summary
tables.
Analytical Perspectives, Budget of the United
States Government, Fiscal Year 2017 contains analyses that are designed to highlight specified subject areas or provide other significant presentations of budget
data that place the budget in perspective. This volume
includes economic and accounting analyses; information
on Federal receipts and collections; analyses of Federal
spending; information on Federal borrowing and debt;
baseline or current services estimates; and other technical presentations.
The Analytical Perspectives volume also has supplemental materials that are available on the internet at
www.budget.gov/budget/Analytical_Perspectives and on
the Budget CD-ROM. These supplemental materials include tables showing the budget by agency and account
and by function, subfunction, and program.
Appendix, Budget of the United States
Government, Fiscal Year 2017 contains detailed information on the various appropriations and funds that
constitute the budget and is designed primarily for the
use of the Appropriations Committees. The Appendix
contains more detailed financial information on individual programs and appropriation accounts than any of the
other budget documents. It includes for each agency: the
proposed text of appropriations language; budget schedules for each account; legislative proposals; narrative explanations of each budget account; and proposed general
provisions applicable to the appropriations of entire agen-

cies or group of agencies. Information is also provided on
certain activities whose transactions are not part of the
budget totals.
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that are released at a future date, spreadsheets of many
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are available for downloading in several formats from the
internet at www.budget.gov/budget. Links to documents
and materials from budgets of prior years are also provided.
Budget CD-ROM. The CD-ROM contains all of the
printed budget documents in fully indexed PDF format
along with the software required for viewing the documents.
The Internet and CD-ROM also include many of the
budget tables in spreadsheet format, and supplemental
materials that are part of the Analytical Perspectives volume. It also includes Historical Tables that provide data
on budget receipts, outlays, surpluses or deficits, Federal
debt, and Federal employment over an extended time period, generally from 1940 or earlier to 2017 or 2021.
For more information on access to electronic versions
of the budget documents (except CD-ROMs), call (202)
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GENERAL NOTES
1.	 All years referenced for budget data are fiscal years unless otherwise noted. All years referenced for economic
data are calendar years unless otherwise noted.
2.	 Detail in this document may not add to the totals due to
rounding.

U.S. GOVERNMENT PRINTING OFFICE, WASHINGTON 2016

093131-4

90000

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I S B N 978-0-16-093131-4

Table of Contents

Page

The Budget Message of the President ������������������������������������������������������������������������������������������������1
Building on Our Economic and Fiscal Progress������������������������������������������������������������������������������7
A Record of Job Growth and Economic Expansion�������������������������������������������������������������������7
Reflecting on Our Fiscal Progress����������������������������������������������������������������������������������������������8
Helping, Not Hurting, the Economy: The Bipartisan Budget Act of 2015�����������������������������10
Building on Our Success for a Stronger Economy������������������������������������������������������������������12
Investing in Economic Growth While Maintaining Fiscal Responsibility�����������������������������13
Meeting Our Greatest Challenges: Innovation to Forge a Better Future��������������������������������15
Creating a Climate-Smart Economy����������������������������������������������������������������������������������������������15
21st Century Clean Transportation Plan���������������������������������������������������������������������������������16
Doubling the Investment in Clean Energy R&D��������������������������������������������������������������������19
Protecting and Increasing the Nation’s Water Supply through
Investment in Water Technology������������������������������������������������������������������������������������������20
Partnering with Communities to Tackle Climate Risk�����������������������������������������������������������21
Preserving and Protecting Public Lands and Oceans�������������������������������������������������������������24
Leading International Efforts to Cut Carbon Pollution and
Enhance Climate Change Resilience������������������������������������������������������������������������������������25
Investing in Research and Development���������������������������������������������������������������������������������������26
Revitalizing American Manufacturing������������������������������������������������������������������������������������26
Advancing Biomedical Research at the National Institutes of Health (NIH)�����������������������27
Investing in Civil Space Activities�������������������������������������������������������������������������������������������28
Addressing Challenges in Agriculture through R&D�������������������������������������������������������������28
Meeting Our Greatest Challenges: Opportunity for All ���������������������������������������������������������������31
Educating for the Future: From Early Learning to College���������������������������������������������������������31
Improving Access to High-Quality, Affordable Early Education��������������������������������������������32
Putting Students on a Path to College and Careers���������������������������������������������������������������33
Promoting College Affordability and Completion�������������������������������������������������������������������36
Training Americans for the Jobs of the Future�����������������������������������������������������������������������������39
Protecting Workers�������������������������������������������������������������������������������������������������������������������41
Making the 21st Century Economy Work for Workers�������������������������������������������������������������������43
Helping Workers Balance Work and Family���������������������������������������������������������������������������43
Helping All Workers Save for Retirement�������������������������������������������������������������������������������44
Helping Workers Who Lose Their Jobs and Reducing Job Loss���������������������������������������������46
Addressing Wage Stagnation and Helping Low-Wage Workers���������������������������������������������47
Tax Reform That Promotes Growth and Opportunity�������������������������������������������������������������������50
Closing Tax Loopholes for the Wealthy, Imposing a Fee on Large Financial
Firms, and Making Sure Everyone Pays Their Fair Share�������������������������������������������������50
Fixing America’s Broken Business Tax System����������������������������������������������������������������������51
Partnering with Communities to Expand Opportunity����������������������������������������������������������������52
Housing and Homelessness������������������������������������������������������������������������������������������������������������53
Strengthening Efforts to Help Poor Families Succeed������������������������������������������������������������������55
Building on the ACA to Improve Americans’ Health��������������������������������������������������������������������59
Implementing the ACA and Improving Health Care in America�������������������������������������������59
Strengthening Medicare, Medicaid and CHIP������������������������������������������������������������������������60
Transforming the Nation’s Health Care Delivery System�����������������������������������������������������62
Investing in Public Health and Safety and the Health Care Workforce��������������������������������64
Addressing the High Cost of Drugs�����������������������������������������������������������������������������������������65

Page
Ensuring Safety, Fairness, and Community Trust in the Criminal Justice System��������������������66
Fixing our Broken Immigration System and Securing Our Borders�������������������������������������������67
Immigration Executive Actions������������������������������������������������������������������������������������������������67
Improving Border Security�������������������������������������������������������������������������������������������������������69
Meeting Our Greatest Challenges: National Security and Global Leadership ����������������������71
Advancing National Security Priorities�����������������������������������������������������������������������������������������71
Addressing Today’s Challenges������������������������������������������������������������������������������������������������������73
Destroying ISIL������������������������������������������������������������������������������������������������������������������������73
Combatting Global Terrorism��������������������������������������������������������������������������������������������������73
21st Century Cybersecurity: Securing the Digital Economy for All Americans���������������������74
Strengthening Federal Cybersecurity�������������������������������������������������������������������������������������75
Securing the Digital Ecosystem�����������������������������������������������������������������������������������������������76
Supporting the Transition in Afghanistan������������������������������������������������������������������������������78
Countering Russian Aggression and Supporting European Allies����������������������������������������78
Providing Further Support for the Central American Regional Strategy�����������������������������79
Advancing the Rebalance to Asia and the Pacific�������������������������������������������������������������������79
Growing Partnerships in Africa�����������������������������������������������������������������������������������������������80
Preparing for the Future����������������������������������������������������������������������������������������������������������������80
Building the Force of the Future����������������������������������������������������������������������������������������������80
Maintaining Technological Superiority�����������������������������������������������������������������������������������80
Strengthening Space Security��������������������������������������������������������������������������������������������������81
Making the Military More Effective and Efficient through Defense Reforms����������������������81
Sustaining the President’s Development and Democracy Agenda�����������������������������������������������82
Mobilizing the Private Sector to Advance Sustainable Development������������������������������������82
Addressing Humanitarian Needs��������������������������������������������������������������������������������������������83
Advancing Global Health���������������������������������������������������������������������������������������������������������83
Supporting Let Girls Learn������������������������������������������������������������������������������������������������������84
Building Strong Democratic Institutions��������������������������������������������������������������������������������84
Honoring Our Commitment to Veterans����������������������������������������������������������������������������������������84
Improving Veteran Access to Quality Health Care�����������������������������������������������������������������85
Speeding the Processing of Disability Compensation Claims and Appeals���������������������������85
A Government of the Future ��������������������������������������������������������������������������������������������������������������87
Effectiveness: a Government that Works for Citizens and Businesses����������������������������������������87
Delivering Smarter IT��������������������������������������������������������������������������������������������������������������88
Strengthening Federal Cybersecurity�������������������������������������������������������������������������������������90
Delivering World-Class Customer Service������������������������������������������������������������������������������92
Reshaping the Way Government Engages with Citizens and Communities�������������������������93
Efficiency: Increasing Quality and Value in Core Operations������������������������������������������������������95
Expanding Shared Services to Increase Quality and Savings�����������������������������������������������95
Buying as One through Category Management����������������������������������������������������������������������96
Shrinking the Federal Real Property Footprint����������������������������������������������������������������������97
Benchmarking Agencies�����������������������������������������������������������������������������������������������������������98
Reforming Federal Background Investigations����������������������������������������������������������������������98
Modernizing Infrastructure Permitting����������������������������������������������������������������������������������99
Increasing Federal Spending Transparency��������������������������������������������������������������������������100
Reducing the Administrative Reporting Burden for Federal Contractors and Grantees����������100
Economic Growth: Opening Government-Funded Data and Research to the
Public to Spur Innovation, Entrepreneurship, and Job Growth����������������������������������������������101
Opening Data to Spark Innovation����������������������������������������������������������������������������������������101
Fueling the Economy by Bridging the Barriers from Lab-to-Market����������������������������������101

Page
People and Culture: Unlocking the Full Potential of Today’s Federal
Workforce and Building the Workforce We Need for Tomorrow�������������������������� 102
White House Advisory Group����������������������������������������������������������������������������� 102
The White House Leadership Development Fellows���������������������������������������� 103
Hiring Excellence������������������������������������������������������������������������������������������������ 103
Employee Engagement��������������������������������������������������������������������������������������� 103
Measuring Results: Setting Goals and Tracking Performance������������������������������� 103
Improving Performance and Accountability������������������������������������������������������ 103
Using Evidence and Evaluation to Drive Innovation and Outcomes��������������������� 104
Improving Capacity to Build and Use Evidence����������������������������������������������� 105
Reorganizing Government: Reforming to Win in the Global Economy������������ 107
Cuts, Consolidations, and Savings ������������������������������������������������������������������������������ 109
Summary Tables �������������������������������������������������������������������������������������������������������������� 113
OMB Contributors to the 2017 Budget ����������������������������������������������������������������������� 167

On the cover:
Denali National Park
Photo by Jacob Frank, National Park Service
Photograph has been reformatted from full color to monochrome

THE BUDGET MESSAGE OF THE PRESIDENT

To the Congress of the United States:
As I look back on the past seven years, I am inspired by America’s progress—and I am more
determined than ever to keep our country moving forward. When I took office, our Nation was in
the midst of the worst recession since the Great Depression. The economy was shedding 800,000
jobs a month. The auto industry was on the brink of collapse and our manufacturing sector was in
decline. Many families were struggling to pay their bills and make ends meet. Millions more saw
their savings evaporate, even as retirement neared.
But thanks to the grit and determination of the American people, we rescued our economy from
the depths of the recession, revitalized our auto industry, and laid down new rules to safeguard
our economy from recklessness on Wall Street. We made the largest investment in clean energy in
our history, and made health care reform a reality. And today, our economy is the strongest, most
durable on Earth.
Our businesses have created more than 14 million jobs over 70 months, the longest streak of job
growth on record. We have cut our unemployment rate in half. Our manufacturing sector has added
nearly 900,000 jobs in the last six years—and our auto industry just had its best year of sales ever.
We are less reliant on foreign oil than at any point in the previous four decades. Nearly 18 million
people have gained health coverage under the Affordable Care Act (ACA), cutting the uninsured
rate to a record low. Our children are graduating from high school at the highest rate ever. And we
managed to accomplish all of this while dramatically cutting our deficits by almost three-quarters
and setting our Nation on a more sustainable fiscal path. Together, we have brought America back.
Yet while it is important to take stock of our progress, this Budget is not about looking back at the
road we have traveled. It is about looking forward. It is about making sure our economy works for
everybody, not just those at the top. It is about choosing investments that not only make us stronger
today, but also reflect the kind of country we aspire to be—the kind of country we want to pass on
to our children and grandchildren. It is about answering the big questions that will define America
and the world in the 21st Century.
My Budget makes critical investments while adhering to the bipartisan budget agreement I
signed into law last fall, and it lifts sequestration in future years so that we continue to invest in
our economic future and our national security. It also drives down deficits and maintains our fiscal
progress through smart savings from health care, immigration, and tax reforms. And, it focuses on
meeting our greatest challenges not only for the year ahead, but for decades to come.
First, by accelerating the pace of American innovation, we can create jobs and build the economy
of the future while tackling our greatest challenges, including addressing climate change and finding
new treatments—and cures—for devastating diseases.

1

2

THE BUDGET MESSAGE OF THE PRESIDENT

The challenge of climate change will define the contours of this century more dramatically than
any other. Last year was the hottest on record, surpassing the record set just a year before. Climate
change is already causing damage, including longer, more severe droughts and dangerous floods,
disruptions to our food and water supply, and threats to our health, our economy, and our security.
We have made great strides to foster a robust clean energy industry and move our economy away
from energy sources that fuel climate change. In communities across the Nation, wind power is now
cheaper than dirtier, conventional power, and solar power is saving Americans tens of millions of
dollars a year on their energy bills. The solar industry employs more workers than the coal industry—
in jobs that pay better than average.
Despite these advances, we can and must do more. Rather than shrinking from the challenge,
America must foster the spirit of innovation to create jobs, build a climate-smart economy of the
future, and protect the only planet we have. To speed our transition to an affordable, reliable, clean
energy system, my Budget funds Mission Innovation, our landmark commitment to double clean
energy research and development funding. It also calls for a 21st Century Clean Transportation
initiative that would help to put hundreds of thousands of Americans to work modernizing our
infrastructure to ease congestion and make it easier for businesses to bring goods to market through
new technologies such as autonomous vehicles and high-speed rail, funded through a fee paid by
oil companies. It proposes to modernize our business tax system to promote innovation and job
creation. It invests in strategies to make our communities more resilient to floods, wildfires, and
other effects of climate change. And, it protects and modernizes our water supply and preserves our
natural landscapes. These investments, coupled with those in other cutting-edge technology sectors
ranging from manufacturing to space exploration, will drive new jobs, new industries, and a new
understanding of the world around us.
Just as a commitment to innovation can accelerate our efforts to protect our planet and create a
sustainable economy, it can also drive critical medical breakthroughs. The Budget supports a new
“moonshot” to finally cure cancer, an effort that will be led by the Vice President and will channel
resources, technology, and our collective knowledge to save lives and end this deadly disease. It also
supports the Precision Medicine Initiative to accelerate the development of customized treatments
that take into account a patient’s genes, environment, and lifestyle, as well as the BRAIN Initiative,
which will dramatically increase our understanding of how the brain works.
Second, we must work to deliver a fair shot at opportunity for all, both because this reflects American
values and because, in the 21st Century global economy, our competitiveness depends on tapping the
full potential of every American. Even as we have rebounded from the worst economic crisis of our
lifetimes, too many families struggle to reach the middle class and stay there, and too many kids face
obstacles on the path to success.
Real opportunity begins with education. My Budget supports the ambitious goal that all children
should have access to high-quality preschool, including kids from low-income families who too
often enter kindergarten already behind. It also supports States and cities as they implement
a new education law that will place all students on a path to graduate prepared for college and
successful careers. The bipartisan Every Student Succeeds Act sets high standards for our schools
and students, ensures that States are held accountable for the success of all students, including those
in the lowest performing schools, spurs innovation in education, helps schools recruit and support
great teachers, and encourages States to reduce unnecessary testing. And because jobs in science,
technology, engineering, and mathematics are projected to grow faster than other jobs in the years

THE BUDGET FOR FISCAL YEAR 2017

3

ahead, the Budget makes critical investments in math and science. Through a new Computer Science
for All initiative, the Budget will expand the teaching and learning of these important concepts across
America’s schools, better preparing our Nation’s students for today’s innovation economy.
Higher education is the clearest path to the middle class. By 2020, two-thirds of jobs will require
some education beyond high school. For our students and for our economy, we must make a quality
college education affordable for every American. To support that goal, the Budget strengthens Pell
Grants to help families pay for college by increasing the scholarships available to students who take
enough courses to stay on track for on-time graduation, allowing students making progress toward
their degrees to get support for summer classes, and providing scholarships to help incarcerated
Americans turn their lives around, get jobs, and support their families. It also offers two years of
free community college to every responsible student and strengthens the American Opportunity Tax
Credit.
In addition to preparing students for careers, we must help workers gain the skills they need
to fill jobs in growing industries. My Budget builds on the progress we have made to improve the
Nation’s job training programs through implementation of the bipartisan Workforce Innovation and
Opportunity Act. It funds innovative strategies to train more workers and young people for 21st
Century jobs. And it doubles down on apprenticeships—a proven pathway to the middle class—and
supports a robust set of protections for the health, safety, wages, working conditions, and retirement
security of working Americans.
Even as we invest in better skills and education for our workforce, we must respond to dramatic
changes in our economy and our workforce: more automation; increased global competition; corporations
less rooted in their communities; frequent job changes throughout a worker’s career; and a growing
gap between the wealthiest and everyone else. These trends squeeze workers, even when they have
jobs, even when the economy is growing. They make it harder to start a career, a family, a business,
or retirement.
To address these changes and give Americans more economic security, we need to update several
key benefit structures to make sure that workers can balance work and family, save for retirement,
and get back on their feet if they lose a job. The Budget supports these priorities by funding highquality child care, encouraging State paid leave policies, extending employer-based retirement plans
to part-time workers, putting us on a path to more portable benefit models, and providing a new tax
credit for two-earner families. It also modernizes the unemployment insurance system, so that more
unemployed workers receive the unemployment benefits they need and an opportunity to retrain for
their next job. And, if that new job does not pay as much initially, it offers a system of wage insurance
to encourage workers to rejoin the workforce and help them pay their bills. The Budget includes tax
cuts for middle-class and working families that will make paychecks go further in meeting the costs
of child care, education, and saving for retirement. It builds upon the demonstrated success of the
Earned Income Tax Credit by expanding it for workers without children and non-custodial parents.
Providing opportunity to all Americans means tackling poverty. Too many Americans live in
communities with under-performing schools and few jobs. We know from groundbreaking new
research that growing up in these communities can put lifelong limits on a child’s opportunities.
Over the past few years, we have made progress in supporting families that were falling behind. For
example, working family tax credits keep more than 9 million people—including 5 million children—
out of poverty each year, and the ACA provides access to quality, affordable health care to millions.
Nevertheless, we need to do more to ensure that a child’s zip code does not determine his or her

4

THE BUDGET MESSAGE OF THE PRESIDENT

destiny. Improving the opportunity and economic security of poor children and families is both a
moral and an economic imperative.
The Budget funds innovative strategies to support this goal, including helping families move to
safer neighborhoods with better schools and more jobs, revitalizing distressed communities to create
more neighborhoods of opportunity, preventing families experiencing a financial crisis from becoming
homeless, and ensuring that children have enough to eat when school is out for the summer. It also
supports efforts to break the cycle of poverty and incarceration through criminal justice reform.
Finally, as we work to build a brighter future at home, we must also strengthen our national security
and global leadership. The United States of America is the most powerful nation on Earth, blessed
with the finest fighting force in the history of the world.
Still, this is a dangerous time. We face many threats, including the threat of terrorist attacks and
violent extremism in many forms. My highest priority is keeping the American people safe and going
after terrorist networks. That is why my Budget increases support for our comprehensive strategy
to destroy the Islamic State of Iraq and the Levant (ISIL), in partnership with more than 60 other
countries, by eliminating its leadership, cutting off its financing, disrupting its plots, stopping the flow
of terrorist fighters, and stamping out its vicious ideology. If the Congress is serious about winning
this war and wants to send a message to the troops and the world, it should specifically authorize the
use of military force against ISIL.
The Budget also sustains and builds the strength of our unmatched military forces, making the
investments and reforms that will maintain our Nation’s superiority and ensure our advantage over
any potential adversary. It also makes investments to ensure that our men and women in uniform,
who sacrifice so much to defend our Nation and keep us safe, get the support they have earned to
succeed and thrive when they return home.
Cybersecurity is one of our most important national security challenges. As our economy becomes
increasingly digital, more sensitive information is vulnerable to malicious cyber activity. This
challenge requires bold, aggressive action. My Budget significantly increases our investment in
cybersecurity through a Cybersecurity National Action Plan. This Plan includes retiring outdated
Federal information technology (IT) systems that were designed in a different age and increasingly
are vulnerable to attack, reforming the way that the Federal Government manages and responds
to cyber threats, and recruiting the best cyber talent. It will also help strengthen cybersecurity
in the private sector and the digital ecosystem as a whole, enhancing cyber education and making
sure companies and consumers have the tools they need to protect themselves. But many of our
challenges in cybersecurity require bold, long-term commitments to change the way we operate in an
increasingly digital world. That is why, to complement these steps, I am also creating a commission
of experts to make recommendations for enhancing cybersecurity awareness and protections inside
and outside of Government, protecting privacy, and empowering Americans to take better control of
their digital security.
To ensure security at home, we must also demonstrate leadership around the world. Strong
leadership means not only a wise application of military power, but also rallying other nations behind
causes that are right. It means viewing our diplomacy and development efforts around the world as
an essential instrument of our national security strategy, and mobilizing the private sector and other
donors alongside our foreign assistance to help achieve our global development and climate priorities.
The Budget supports this vision with funding for effective global health programs to fight HIV/AIDS,

THE BUDGET FOR FISCAL YEAR 2017

5

malaria, and other illnesses; assistance for displaced persons and refugees, including from Syria; and
expanding educational opportunities for girls, among many other critical development initiatives.
As we make these investments to meet our greatest challenges, we are also working to build a 21st
Century Government that delivers for the American people. The Budget supports efforts to make
the Federal Government more efficient and effective, through smarter IT delivery and procurement,
improving digital services, eliminating outdated regulations, and recruiting and retaining the best
talent. It also invests in a new approach to working in local communities, one that disrupts an
outdated, top-down approach, and makes our efforts more responsive to the ideas and concerns of
local citizens. The Budget supports the use of data and evidence to drive policymaking, so the Federal
Government can do more of what works and stop doing what does not.
The Budget is a roadmap to a future that embodies America’s values and aspirations: a future of
opportunity and security for all of our families; a rising standard of living; and a sustainable, peaceful
planet for our kids. This future is within our reach. But just as it took the collective efforts of the
American people to rise from the recession and rebuild an even stronger economy, so will it take all of
us working together to meet the challenges that lie ahead.
It will not be easy. But I have never been more optimistic about America’s future than I am today.
Over the past seven years, I have seen the strength, resilience, and commitment of the American
people. I know that when we are united in the face of challenges, our Nation emerges stronger and
better than before. I know that when we work together, there are no limits to what we can achieve.
Together, we will move forward to innovate, to expand opportunity and security, and to make our
Nation safer and stronger than ever before.

Barack Obama
The White House,
February 9, 2016.

BUILDING ON OUR ECONOMIC
AND FISCAL PROGRESS
A Record of Job Growth and
Economic Expansion
When the President took office in January
2009, he faced an economy shrinking at its fastest
rate in over 50 years. Nearly 800,000 Americans
lost their jobs in that month alone. The President
and the entire Administration acted quickly to
jumpstart the economy and create jobs through
the Recovery Act; rescue the auto industry from
near collapse; fight for passage of the Affordable
Care Act (ACA) to provide quality, affordable insurance coverage to millions of Americans and
help slow the growth of health care costs; and
secure the Dodd-Frank Wall Street Reform and
Consumer Protection Act to help prevent future
financial crises. 
Under the President’s leadership, the U.S.
economy has become an engine of job growth and

economic expansion, outpacing other advanced
economies in recovery from the Great Recession. 
In 2015, the U.S. economy achieved a number of
significant milestones.  American businesses extended their record streak of consecutive months
of job growth, adding more than 14 million new
jobs over the past 70 months.  The two-year period ending December 2015 marked the strongest
two years of job creation since 2000.  Significantly,
all of the net employment gains since early 2010
have been in full-time positions.
Since October 2009, the unemployment rate
has been cut in half, declining 0.6 percentage
points in 2015 and falling below its pre-recession average.  Unemployment has fallen five
percentage points since its peak in early 2010,
much faster than forecasted. Long-term unemployment has fallen by 70 percent from its peak,

More than 14 Million Jobs Added Over the Past 70 Months
Seasonally-adjusted private sector monthly job gain/loss
400,000
200,000
0
-200,000
-400,000
-600,000
-800,000
Jan
2008

Jan
2009

Source: Bureau of Labor Statistics

Jan
2010

Jan
2011

Jan
2012

Jan
2013

Jan
2014

Jan
2015

8

BUILDING ON OUR ECONOMIC AND FISCAL PROGRESS

declining at a faster rate than overall unemployment and reaching its lowest rate since 2008. 
While there is more work to do to boost wages as
the economy continues to grow, there are encouraging signs that earnings are on the rise.
The manufacturing sector has made major
gains over the course of the economic recovery.
Since February 2010, the economy has added
878,000 new manufacturing jobs—the first sustained job growth in the sector since the 1990s.  
The economy is not only recovering, it is
evolving. The President has made the largest
investments in clean energy in American history,
and America is less reliant on foreign oil than at
any point in the previous four decades. Wind production now provides clean electricity to power
17 million homes and supports tens of thousands
of jobs across the Nation. Solar electricity generation has increased thirty-fold since 2008, and
the solar industry is creating jobs 12 times faster
than the rest of the economy.
American families are benefiting from a growing economy. Rising home prices have restored
more than $6 trillion in home equity, while the

number of seriously delinquent mortgages has
reached an eight-year low. Under the Affordable
Care Act (ACA), health care prices have risen at
the slowest pace in 50 years, while the rate of
uninsured Americans has dropped to the lowest
level on record. In addition, the strong job market and safety net enhancements have made a
dent in poverty. While child poverty remains too
high, Census data show the past two years have
seen the fastest decline in child poverty since
2000.
The United States right now has the strongest,
most durable economy in the world.  The determination and resilience of the American people,
coupled with the President’s decisive actions
during the financial crisis, brought the economy
back from the brink.

Reflecting on Our Fiscal Progress
Even as the Administration made critical
investments to jumpstart the economy, it also
succeeded in putting the Nation on a sound
fiscal path. Since 2009, under the President’s
leadership, Federal deficits have fallen by nearly
three-quarters—the most rapid sustained deficit

Unemployment Rate has Fallen Faster than Forecasted
Percent of labor force
10
Unemployment Rate

2014 Forecast

2010 Forecast

9

2011 Forecast
2012 Forecast

2015 Forecast

8
7
6
5
4

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Note: Annual forecasts are current as of March of the stated year. Shading denotes
recession.
Source: Blue Chip Economic Indicators; Bureau of Labor Statistics, Current Population Survey

9

THE BUDGET FOR FISCAL YEAR 2017

reduction since just after World War II. The
annual deficit in 2015 fell to 2.5 percent of the
Gross Domestic Product (GDP), the lowest level
since 2007, and well below the average of the
last 40 years. Over the past six years, actual and
projected deficits have fallen due to three main
factors.
First, economic growth has helped accelerate
the pace of deficit reduction. Growth in recent
years has increased revenues and reduced spending on “automatic stabilizer” programs, such as
unemployment insurance, that automatically
increase during economic downturns.
Second, since 2010, the President has worked
on a bipartisan basis to put in place deficit reduction measures totaling $3.8 trillion from
2017 through 2026, not counting the hundreds of
billions of dollars in additional savings achieved
by winding down wars in Iraq and Afghanistan.
These measures include restoring Clinton-era
tax rates on the highest-income Americans.
These restored rates in combination with other tax policies enacted under the President’s
leadership, have led to the top 0.1 percent of
families contributing more than $500,000 in additional taxes each year on average, according to
a Department of the Treasury analysis. At the

same time, tax cuts have increased the after-tax
incomes of working families of modest means.
Discretionary spending restraint has also played
a role in deficit reduction, but sequestration
cuts have contributed only a minority of the
discretionary savings achieved since 2010, while
shortchanging investment and cutting critical
services.
Finally, deficits have fallen due to exceptionally slow health care cost growth. When the
President took office, he immediately identified
health care costs as one of the major drivers of
the Nation’s long-term fiscal challenges. In his
Address to a Joint Session of the Congress in
February 2009, he called for health reform as
“a step we must take if we hope to bring down
our deficit in the years to come.” In the months
that followed, the President fought to enact
comprehensive health care reform even as the
Administration took aggressive actions to bolster the economy and help Americans get back to
work. Central to the ACA, which was signed into
law in 2010, were a series of reforms designed
to rein in health care cost growth by reducing
excessive payments to private insurers and
health care providers in Medicare, developing
and deploying new payment models that reward
high-quality efficient care, and implementing an

2009-2015 was the Fastest Period of Sustained Deficit
Reduction Since WWII

Annual deficits as a percent of GDP
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%

2009

2010

2011

2012

2013

2014

2015

10

BUILDING ON OUR ECONOMIC AND FISCAL PROGRESS

excise tax on the most costly health plans in the
employer market. These reforms together create
strong incentives for efficient and effective coverage, and have moved us toward paying for value,
rather than volume, in health care services.
In the years since 2010, we have seen prolonged slow growth in per-beneficiary health
care spending in both private insurance and
public programs. In 2014, in both Medicare and
private health insurance, per-enrollee spending
grew by less than one-third the rate seen over
the preceding decade, adjusting for inflation.
While some of the slowdown can be attributed
to the Great Recession and its aftermath, there
is increasing evidence that much of it is the result of structural changes, including the reforms
enacted in the ACA.
The health care cost slowdown is already
yielding substantial fiscal dividends. Compared
with the 2011 Mid-Session Review, aggregate
projected Federal health care spending for 2020
has de­ reased by $185 billion based on current
c
budget estimates, savings above and beyond the
deficit reduction directly attributed to the ACA
when it was passed.

Helping, Not Hurting, the Economy:
The Bipartisan Budget Act of 2015
Sustained economic growth is a necessary
pillar of fiscal health. As the American people
work to continue our economic and fiscal progress, it is critical that the Federal Government
support, rather than impede, economic growth.
That means ending the harmful spending cuts
known as sequestration, which limit the ability to invest in the building blocks of long-term
economic growth, like research and development (R&D), infrastructure, job training, and
education.
Early in the Administration, the President
and the Congress worked together to enact
measures to stabilize and restore growth to a
faltering economy and to rebuild it on a stronger
foundation for the long run. In addition to the
Recovery Act, the ACA, and the Dodd-Frank Wall

Street Reform and Consumer Protection Act, the
Congress took bipartisan action in 2010 on a
number of temporary measures to jumpstart the
recovery.
Unfortunately, policies adopted in subsequent years hurt, rather than helped, the
economy. Sequestration cuts that were never
intended to take effect were implemented in
March 2013, reducing GDP by 0.6 percentage
points and costing 750,000 jobs, according
to the Congressional Budget Office (CBO).
In 2011, and again in 2013, congressional
Republicans sought to use the Nation’s full
faith and credit as a bargaining chip, driving
down consumer confidence and driving up uncertainty. The Federal Government shutdown
in October 2013 created further uncertainty
and reduced growth in the fourth quarter of
2013 by 0.3 percentage points.
Following
the
Government
shutdown,
policymakers started to move away from manufactured crises and austerity budgeting, helping
to lay the groundwork for job market gains and
stronger growth. The President worked with the
Congress to secure a two-year budget agreement
(the Bipartisan Budget Act of 2013) that replaced
a portion of the harmful sequestration cuts and
allowed for higher investment levels in 2014 and
2015. The Council of Economic Advisers estimated that the 2013 budget deal would create
about 350,000 jobs over the course of 2014 and
2015, so it likely made a significant contribution
to the improvement in the labor market over the
past two years.
With harmful sequestration cuts scheduled to
return in full in 2016, the President made clear
that he would not accept a budget that locks in
these short-sighted cuts and that the Congress
would again have to take action to address them.
The President’s 2016 Budget laid out a path to do
so: it replaced the sequestration cuts with smart
reforms in areas like health care that would improve quality while controlling health care cost
growth. It also proposed critical investments
in economic growth and opportunity that could
only be made by lifting sequestration.

THE BUDGET FOR FISCAL YEAR 2017

In October 2015, the President worked with
congressional leaders from both parties to secure another two-year budget agreement (the
Bipartisan Budget Act of 2015 or BBA) that
will create an estimated 340,000 jobs in 2016
alone, while supporting middle-class families,
investing in long-term growth, protecting Social
Security, and safeguarding national security. The
BBA provided roughly 75 percent more sequestration relief over two years than the budget
agreement reached in 2013, including nearly 90
percent of the discretionary sequestration relief
the President requested in 2016. The sequestration relief was fully paid for, and employed a
number of reforms the President put forward in
the Budget. The BBA also included critically important provisions to bolster the financing of the
Social Security Disability Insurance Program
(SSDI), ensuring that the program can continue
to provide workers with serious disabilities and
their families the full benefits they have earned.
Without congressional action, SSDI would have
run short of funds in December 2016, resulting
in large benefit cuts.
Some private forecasters have estimated that
the measures in this agreement will lead to the
first year with a net positive contribution from
Federal fiscal policy to GDP growth since 2010.
The agreement ended yet another period of
brinksmanship and uncertainty and put us on a
path to avoid more manufactured crises in the
months ahead.
Because of the sequestration relief secured
in the BBA, the President and congressional
leaders were able to come together to invest in
many of the key priorities from the President’s
2016 Budget that will help the economy and
middle-class families, including:
•	 Job Training. A $90 million landmark new
effort to expand apprenticeships, creating more opportunities for hard-working
Americans to acquire the skills they need to
succeed in good jobs that are available now.
•	 Research. A seven percent increase in
National Institutes of Health funding between 2015 and 2016 will go toward critical

11
research priorities like Alzheimer’s disease,
addressing antibiotic resistance, cancer, and
the Precision Medicine Initiative.
•	 Early Learning. A six percent increase in
Head Start funding, including a new, nearly $300 million investment, to increase the
number of Head Start programs that provide a full school day and a full school year,
which research shows promotes better outcomes for children.
•	 Clean Energy. An eight percent increase in
funding between 2015 and 2016 for clean energy projects supported by the Department
of Energy’s Office of Energy Efficiency and
Renewable Energy in cooperation with industry, universities, and the national labs.
•	 Advanced Manufacturing. Resources for
new manufacturing innovation institutes
building toward the President’s goal of 15
institutes by the end of his term, representing over $225 million of additional and
continuing investments in 2016. Each of
these manufacturing institutes brings together leading companies, universities, and
non-profits to co-invest in the development
of game-changing manufacturing technologies that make the U.S. more competitive
for manufacturing jobs and investment.
The President and the Congress have now
come together twice to avoid harmful sequestration cuts, replacing the savings with a
smarter mix of revenues and spending reforms,
and investing equally in the economy and national security. These actions further highlight
that the President’s proposal to fully offset
the cost of ending sequestration is consistent
with his vision to make necessary investments
to support economic growth and opportunity, and to put the Nation on a more fiscally
sustainable path.
Providing sequestration relief and investing
in the economy through the BBA and subsequent year-end 2016 budget legislation (the
2016 Consolidated Appropriations Act or 2016
Omnibus) were only a part of the bipartisan
budget-related accomplishments in 2015. In

12

BUILDING ON OUR ECONOMIC AND FISCAL PROGRESS

April, the Congress passed legislation that
permanently reforms the Medicare physician payment system and extends the critical
Children’s Health Insurance Program, which
provides coverage to millions of American children. Nearly every year, for the past 13 years,
physicians have faced the possibility of cuts
in their payments from Medicare unless the
Congress passed a so-called “doc fix.” The 2016
Budget called for putting a permanent end
to this annual crisis and reforming Medicare
physician payments to promote high-quality
efficient care. The enacted legislation achieved
these aims, providing certainty for physicians
and preserving patient access to care, while
also encouraging delivery system reforms
designed to improve quality and improve the
sustainability of the Medicare program over
the long term.
Also, as part of the 2016 Omnibus, the
Congress reached a bipartisan agreement on
expiring tax provisions that will extend critical tax relief to working families, incentivize
private-sector innovation through support
for R&D, and simplify and cut taxes for small
businesses while putting dozens of corporate
tax breaks on a real path to expiration. The
legislation signed into law by President Obama
permanently extends Recovery Act expansions
of the Child Tax Credit and Earned Income Tax
Credit that were scheduled to expire after 2017,
which will provide a tax cut of about $900 on average for millions of working families a year. If
the expansions had been allowed to expire, more
than 16 million people—including eight million
children—would have fallen into, or deeper into,
poverty in 2018. The agreement also makes permanent the President’s American Opportunity
Tax Credit, first enacted in the Recovery Act,
which helps families afford college with up to
$10,000 in tax credits for tuition, fees, and books
over four years. In addition, the agreement extends for five years wind and solar tax credits,
boosting investments in these energies, which
will significantly reduce carbon dioxide emissions. However, the tax agreement did not offset
the cost of the business tax breaks it contained
and did not take necessary steps to reform the

business tax system. As the President has proposed, the Congress should pass business tax
reform that closes loopholes, makes the tax
system fairer, and pays for these tax cuts.

Building on Our Success for
a Stronger Economy
The BBA provides a critical increase in discretionary funding for 2016 and 2017, including
nearly two-thirds of the sequestration relief for
2017 that the President called for in the 2016
Budget. The 2017 Budget builds on the achievements secured for 2016 and adheres to the
agreement’s discretionary funding levels. Still,
not fully replacing sequestration in 2017 has
consequences, including hindering the ability
to make needed investments that are critical to
building durable economic growth in the future
and maintaining America’s edge as the leader in
innovation and cutting-edge science.
For that reason, the Budget includes a series
of investments using mandatory funding that
will help maintain preeminence in science and
engineering, support jobs and economic growth,
expand opportunity, and ensure that we continue
to demonstrate economic leadership for decades
to come.
These critical investments include a range of
R&D efforts, from basic science research in the
physical, environmental, and agricultural sciences, to launching a cancer “moonshot” through
investments in biomedical research, to supporting earth science, space science, aeronautics, and
exploration missions at the National Aeronautics
and Space Administration—all with the potential to fundamentally change what America is
capable of achieving.
The investments also support early learning,
which provides a strong foundation for children’s
future success in school and in life, including the
President’s Preschool for All initiative to ensure
four-year-olds across the Nation have access to
high-quality preschool programs. They also fund
a historic investment to ensure that all low- and
moderate-income families with young children

13

THE BUDGET FOR FISCAL YEAR 2017

have access to high-quality child care that supports children’s development and helps parents
work.
In addition, the investments fund computer science opportunities for K-12 students,
strengthen community colleges, which expand
students’ opportunities to pursue the know­
ledge and skills they need for well-paying jobs,
and criminal justice reform, to break the cycle of
poverty and incarceration that traps too many
Americans and ultimately detracts from communities, the workforce, and economic growth.
These investments also support expanded access
to treatment for opioid use disorders, with a goal
of ensuring that all who seek treatment can access it by the end of 2018; and funding to help
more Americans receive needed mental health
care, especially for serious mental illnesses.
These investments also build on the success
in sharply reducing veteran homelessness and
set a path for ending homelessness among all
of America’s families; they enable partnerships
with State and local governments to help families get through a financial crisis and remain
self-sufficient and thrive. The investments fund
a robust effort to enhance national and economic
security through an intensive effort to strengthen cybersecurity across the Federal Government.
The Budget also recognizes that without further congressional action, sequestration will
return in full in 2018, threatening the economy.
That is why the Budget once again proposes
to end sequestration and replace the savings
by cutting inefficient spending and closing tax
loopholes. Reversing sequestration would allow
domestic and security investments needed to
help move the Nation forward. These include
investments to strengthen the economy and
drive growth and opportunity by improving the
education and skills of the U.S. workforce, accelerating scientific discovery, and creating jobs
through pro-work, pro-family initiatives. Ending
sequestration is also necessary to address critical national security priorities and fund national
defense in a fiscally responsible manner.  Ending
this destructive policy would enable the United

States to maintain military readiness, advance
badly-needed technological modernization, and
provide the support that our men and women in
uniform deserve. 

Investing in Economic Growth While
Maintaining Fiscal Responsibility
The Budget shows that investments in growth
and opportunity are compatible with putting the
Nation’s finances on a strong and sustainable
path. The Budget ends sequestration and makes
critical investments while still addressing longterm fiscal challenges. It keeps deficits below
three percent of GDP while stabilizing debt and
putting it on a declining path through 2025—key
measures of fiscal progress.
The Budget accomplishes these goals by more
than paying for all new investments, achieving
$2.9 trillion of deficit reduction over 10 years,
primarily from health, tax, and immigration reforms. The Budget includes roughly $375 billion
of health savings that grow over time, described
further in Chapter 3, Meeting Our Greatest
Challenges: Opportunity for All, and builds on
the ACA with further incentives to improve quality and control health care cost growth.
The Budget also includes smart tax reforms
that promote growth and opportunity, while
strengthening tax policies that help middle-class
families afford child care, higher education,
and a secure retirement, also described further
in Chapter 3. It achieves $955 billion in deficit
reduction from curbing inefficient tax breaks for
the wealthy and closing loopholes for high-income households, helping to bring in sufficient
revenues to make vital investments while also
helping to meet promises made to seniors.
Changes in health and tax policies would help extend the life of the Medicare Hospital Insurance
Trust Fund by over 15 years.
The Budget reflects the President’s support
for commonsense, comprehensive immigration
reform along the lines of the 2013 bipartisan
Senate-passed bill. CBO has estimated that
comprehensive immigration reform along the

14

BUILDING ON OUR ECONOMIC AND FISCAL PROGRESS

lines of the Senate-passed bill would reduce the
deficit by about $170 billion over 10 years and by
almost $1 trillion over two decades. Immigration
reform is a pro-growth policy that helps to directly address key fiscal challenges by helping to
balance out an aging population, increase labor
force participation, and raise productivity. The
Social Security Actuary estimated that immigration reform would reduce Social Security’s
75-year shortfall by eight percent.
The Budget also shows that responsible deficit
reduction can be achieved without cuts in critical
aid to poor Americans and without undermining commitments to seniors and workers. The

Budget puts us on sound fiscal footing even as
it modernizes benefits for workers, invests in
evidence-based efforts to reduce poverty and promote opportunity, and protects Social Security
and Medicare.
Under the President’s leadership, there has
been remarkable economic and fiscal progress,
showing what is possible when strategic investment to grow the economy is paired with
smart reforms that address the true drivers of
long-term fiscal challenges. The Budget continues that approach, investing in America’s future
and laying out a path to address the Nation’s
greatest challenges.

MEETING OUR GREATEST CHALLENGES:
INNOVATION TO FORGE A BETTER FUTURE
Scientific discovery, technological breakthroughs, and innovation are vital for responding
to the biggest challenges and opportunities we
face as a Nation, including addressing climate
change, improving the health of all Americans,
enhancing access to clean water and healthy
food, and ensuring the Nation’s security. They
are also key drivers of long-term economic
growth and job creation.

but for decades to come. Accelerating the pace of
American innovation is essential to ensuring we
keep up with the evolving economy and the rapidly changing world around us. As the President
said in his 2016 State of the Union Address, we
face the key question of “how to make technology
work for us, and not against us, especially when
it comes to solving urgent challenges like climate
change.”

Over the past seven years, the President has
nurtured the American spirit of innovation. The
Administration has prioritized research and development (R&D) funding and created a network
of manufacturing institutes to bolster American
innovation and increase exports. In addition, the
largest investments in clean energy in American
history have been made, creating hundreds
of thousands of new jobs that will thrive in a
low-carbon future. Pollution has been cut from
power plants, vehicles, and agriculture, and the
President has led the world in forging an unprecedented agreement to combat climate change.

The Budget makes significant investments
to make technology work for us as we strive
to meet the Nation’s biggest challenges. It increases investment in our transition to climate
solutions like clean energy, which will help
to grow the economy and create new jobs. It
invests in a new, sustainable transportation system that speeds goods to market while reducing
America’s reliance on oil, cuts carbon pollution,
and strengthens our resilience to the effects of
the changing climate. It invests in medical research to help develop treatments and cures that
have the potential to save millions of lives and
avoid heartbreak for countless families. It also
provides critical funding to ensure that R&D
keeps us on the cutting edge from manufacturing to space exploration to agriculture.

However, there is still more work to do to
harness technology and use it to drive economic
growth and progress, not just for the year ahead,

CREATING A CLIMATE-SMART ECONOMY
When the President visited Alaska in August
2015, he described the urgent and growing
threat of a changing climate as “a challenge that
will define the contours of this century more dramatically than any other.” In 2015 the record set
by 2014 as the warmest year on record was broken. Climate change is already disrupting the
Nation’s agriculture and ecosystems, water and

food supplies, energy, infrastructure, and health
and safety. If we address this growing challenge,
we can minimize the damage to the economy and
reduce threats to national security.
Climate change is not only a danger to avoid.
It is an economic opportunity to seize. Not only
can we act to protect the Nation from this threat,

16 MEETING OUR GREATEST CHALLENGES: INNOVATION TO FORGE A BETTER FUTURE
we can harness it to build a climate-smart economy of the future. Moving toward a climate-smart
economy will improve the air we breathe, the soil
we farm, and the water we drink. In doing so, we
can create jobs and opportunity for millions of
Americans by building the climate solutions the
world needs.
The President has been focused on this challenge since his first inaugural address, when
he committed this Nation to combating climate
change and protecting the planet for future
generations, and tremendous progress has been
made. The United States has led by example,
with historic investments in growing industries
like wind, solar, and biofuels, creating a new and
steady stream of middle-class jobs. We have set
the first-ever nationwide standards to limit the
amount of carbon pollution power plants can
dump into the air. America is on track to double
the distance cars can go on a gallon of gas. We
are also making investments in communities
smarter—to avoid future risks of flooding and sea
level rise by establishing the Federal Flood Risk
Management Standard. From Alaska to the Gulf
Coast to the Great Plains, the Administration
has partnered with local leaders who are working to help their communities protect themselves
from some of the most immediate impacts of a
changing climate.
The recent global climate agreement of 195
countries reached in Paris is a tribute to this U.S.
leadership. The Paris Agreement is ambitious,
with every nation committing to putting forward
successive, ambitious, nationally determined climate targets in five-year intervals. It establishes
strong and binding transparency requirements,
including periodic reviews and independent
assessments, to help hold every country accountable for meeting its commitments.
As we have made significant progress addressing climate change, the economy has continued
to grow, evidence against the tired claims that we
must choose between these critically important
priorities. Economic output has reached all-time
highs while carbon pollution has dropped to its
lowest level in nearly two decades. 

Yet we must do more domestically and internationally. Building on the historic Paris
Agreement, the Budget makes critical investments in creating a climate-smart economy,
one that lays the foundation to transform the
Nation’s transportation system, grows American
leadership in clean energy, accelerates clean water innovation, helps communities prepare for
the effects of climate change and become more
resilient, protects the Nation’s most treasured
natural resources, and demonstrates America’s
global leadership in helping other countries reduce their carbon emissions and accelerate their
transition to low-carbon economic growth.

21st Century Clean Transportation Plan
The Nation’s transportation system was built
around President Eisenhower’s vision of interstate highways connecting 20th Century America.
That vision enabled economic expansion and
prosperity, fostered a new era for automobiles,
and supported the growth of the Nation’s metropolitan areas. Unfortunately, today the remains
of that system—the crumbling highways, bridges, and passenger rail system—are not ready to
meet the challenges of a growing 21st Century
economy. Due to underinvestment, American
infrastructure that was once the envy of the
world is now ranked 19th behind countries such
as Poland, Hungary, and Spain.
As we look to the future, we must invest in a new,
sustainable transportation system that speeds
goods to market, expands Americans’ transportation options, builds resilient and connected
communities, and integrates new technologies
like autonomous vehicles into our infrastructure
system. Furthermore, to address the challenges
of the 21st Century, the Nation needs a transportation system that reduces reliance on oil, cuts
carbon pollution, and strengthens our resilience
to the impacts of climate change.
There have been important infrastructure investments to advance these priorities. Through
the Recovery Act, the Administration invested
over $48 billion for transportation, spurring
more than 14,600 needed highway, transit,

THE BUDGET FOR FISCAL YEAR 2017

bridge, and airport projects across America,
improving nearly 42,000 miles of roads, repairing or replacing more than 2,700 bridges, and
helping transit agencies purchase more than
12,220 transit vehicles. Since 2009 the TIGER
multi-modal competitive grant program has provided nearly $4.6 billion to 381 projects in all 50
States, the District of Columbia, and Puerto Rico,
including 134 projects to support rural and tribal
communities. The Build America Transportation
Investment Center, established in July 2014,
has provided technical assistance to increase
infrastructure investment and economic growth
by engaging with State and local governments
and private-sector investors to encourage collaboration, expand the market for public-private
partnerships, and put Federal credit programs
to greater use. The Administration has worked
with the Congress to pass the FAST Act, providing multi-year dedicated funding for surface
transportation investments for the first time in
a decade.
Yet much more remains to be done. To build a
clean transportation system for the 21st Century,
the Budget invests an average of $32 billion per
year over 10 years into a multi-agency initiative
to refocus Federal investments, reward local
and State governments for innovation, accelerate integration of new vehicle technologies, and
ensure the safety of the transportation system.
The Plan will:
(1) Refocus Federal investment to enhance transportation options for American families.
The proposal invests nearly $20 billion per
year above current spending to reduce traffic
and provide new ways for families to get to work
and to school by:
•	 Providing more than $10 billion on average per year for the Federal Transit
Administration New Starts, Small Starts,
and Transit Formula Grants programs
to invest in the safety, performance, and
efficiency of existing, new, and expanded
transit systems. It also creates a new Rapid
Growth Area Transit program for fast growing communities to implement multi-modal

17
solutions to challenges caused by rapid
growth.
•	 Reaffirming the Administration’s commitment to high-speed rail by investing
on average almost $7 billion per year on a
competitive basis, with an emphasis on incorporating advanced rail technologies.
•	 Providing an average of $1 billion per year
for a multi-modal freight program that
strengthens America’s exports and trade by
providing grants for innovative rail, highway, and port projects that seek to reduce
both emissions and particulate matter that
harm local community health.
•	 Nearly doubling the amount of grant funding available through the TIGER program
to support innovative, multi-modal investments in the Nation’s infrastructure to make
communities more livable and sustainable.
(2) Reward State and local governments for innovations that lead to smarter, cleaner, regional
transportation systems.
The proposal provides approximately $10 billion per year on average to transform regional
transportation systems by shifting how local and
State governments plan, design, and implement
new projects, including:
•	 Proposing over $6 billion per year on average for a 21st Century Regions grant
program to empower metropolitan and regional planners to implement regional-scale
transportation and land-use strategies that
achieve significant reductions in per capita
greenhouse gas (GHG) emissions and vehicle miles traveled, while improving climate
resilience.
•	 Providing nearly $1.5 billion per year on
average in Clean Communities competitive
grants to support transit-oriented development, reconnect downtowns, clean up
brownfields, implement complete streets
policies, and pursue other policies that
make American cities and towns greener
and better places to live.
•	 Providing nearly $1.7 billion per year on
average for Climate-Smart Performance

18 MEETING OUR GREATEST CHALLENGES: INNOVATION TO FORGE A BETTER FUTURE
Formula Funds that are designed to reorient transportation formula funding by
rewarding States that make investments
to mitigate transportation impacts like air
pollution.
•	 Providing $750 million on average per year
for Resilient Transportation competitive
grants to spur investments that bolster
resilience to climate impacts. Cuttingedge projects would incorporate resilience
strategies, such as adaptive materials,
risk-sensitive design, and next generation
transportation and logistics technology.
(3) Accelerate the integration of autonomous vehicles, low-carbon technologies, and intelligent
transportation systems into our infrastructure.
The proposal includes just over $2 billion per
year on average to launch a new generation of
smart, clean vehicles and aircraft by expanding
clean transportation R&D, launching pilot deployments of safe and climate smart autonomous
vehicles, accelerating the transition to cleaner
vehicle fleets and supporting the creation of
regional fueling infrastructure for low-carbon
vehicles by:
•	 Providing almost $400 million on average
per year in funding over the next 10 years
for the deployment of self-driving vehicles.
Investments would help develop connected
infrastructure and smart sensors that can
communicate with autonomous vehicles,
support R&D to ensure these vehicles are
safe and road ready, and expand at-scale
deployment projects to provide “proving
grounds” for autonomous self-driving and
connected vehicles in urban and highway
settings.
•	 Expanding access to alternative fuels by
2020 and increasing the deployment of electric vehicles powered with clean sources of
energy in communities across the United
States by 2025 by providing an average of
approximately $600 million per year for the
Department of Energy (DOE) to develop
regional low-carbon fueling infrastructure
including electric vehicles, biofuels, and
other low-carbon options.

•	 Dedicating an average of around $1 billion per year for DOE, the Environmental
Protection Agency, and the National
Aeronautics and Space Administration
(NASA), to increase R&D in clean fuels and
transportation technologies, including a
new generation of low-carbon aircraft, and
accelerate the Nation’s transition to the deployment of a cleaner public vehicle fleet.
(4) Ensure transportation safety keeps pace with
changing technology.
•	 The Plan focuses on catalyzing rapid changes
in transportation technologies. Accordingly,
it would invest an average of $400 million
per year to ensure that these technologies
are integrated safely into America’s transportation system.
Overall, the 21st Century Clean Transportation
Plan will increase American investments in
clean transportation infrastructure by roughly
50 percent above current levels while reforming
the transportation investments already being
made to move America to more sustainable,
low-carbon investments. Between the Plan and
resource levels under current law, the Budget
proposes to invest nearly $900 billion in the
surface transportation system over 10 years
through the Department of Transportation. The
initiative will:
•	 Strengthen the economy. The investments would support hundreds of thousands
of well-paying, middle-class jobs each year.
It also would increase the competitiveness
of U.S. businesses and the productivity of
the U.S. economy by making it faster, easier, and lower-cost to move American-made
products.
•	 Reduce carbon pollution. The plan would
make public investments and create incentives for private-sector innovation to reduce
America’s reliance on oil and cut carbon
pollution from our transportation sector,
which today accounts for 30 percent of U.S.
greenhouse gas emissions. The investments
in vehicle research and deployment would
put commercial autonomous vehicles on
the road both more quickly and more safely

THE BUDGET FOR FISCAL YEAR 2017
while ensuring electric cars and other alternatives to oil-based vehicles have the
technology and the charging infrastructure
they need.
•	 Make
transportation
easier
for
American families.
The plan would
expand clean, reliable, and safe transportation options like transit and rail, making
it easier for millions of Americans to get
to work and take their children to school
while reducing the seven billion hours that
Americans currently spend in traffic each
year.
The Plan would be funded by a new $10.25
per barrel fee on oil paid by oil companies, which
would be phased in over five years. The fee raises the funding to make the new investments we
need while also providing for the long-term solvency of the Highway Trust Fund to ensure we
maintain the infrastructure we have. By placing
a fee on oil, the President’s plan creates a clear
incentive for private-sector innovation to reduce
America’s reliance on oil and invest in clean energy technologies that will power our future. It
continues the President’s call to utilize one-time
revenues from business tax reform to provide a
temporary near-term surge in investment to set
us on the right path for the years ahead. In addition to transportation investments, 15 percent
of revenues would be allocated to provide assistance to families with burdensome energy costs,
including a focus on supporting households in
the Northeast as they transition from fuel oil for
heating to cleaner forms of energy.

Doubling the Investment
in Clean Energy R&D
Since the President took office, the
Administration has made the largest investments in clean energy in American history and
the impact is clear. In 2014, renewables accounted for half of new electricity generating capacity
placed in service. As of October, renewables were
on pace to account for over 60 percent of new
generation capacity placed in service in 2015.
Last year, the price of solar energy fell by 10
percent and installations climbed by 30 percent.

19
America’s growing clean energy sector is also
creating jobs and advancing American economic leadership; the solar industry adding jobs 12
times faster than the rest of the economy.
While we have made significant progress in
deploying clean energy technologies, accelerating clean energy innovation is essential to
addressing climate change.
That is why the President joined other world
leaders on the first day of the recent Paris climate negotiations to launch Mission Innovation,
a landmark commitment to dramatically accelerate public and private global clean energy
innovation by investing in new technologies that
will define a clean, affordable, and reliable global
power mix. 
Through this initiative, so far 20 countries
have committed to doubling their governmental
clean energy research and development investment over five years. These countries represent
more than 80 percent of the world’s clean energy
R&D investment. Mission Innovation is complemented by the Breakthrough Energy Coalition, a
separate, private sector-led effort whose purpose
is to mobilize substantial levels of private capital to support the most cutting-edge clean energy
technologies emerging from the R&D pipeline.
At the same time, the Administration’s Clean
Energy Investment Initiative has catalyzed more
than $4 billion in independent commitments by
major foundations, institutional investors, and
other long-term investors, along with executive
actions to scale up clean energy innovation.
The U.S. Government is seeking to double its
current base level Federal investment of $6.4
billion in 2016 to $12.8 billion in 2021. Initially,
new funding would strategically target early
stage R&D, which offers the greatest opportunities for breakthroughs and transformative
change.
However, the investment portfolio
spans the full range of R&D activities—from basic research to demonstration. These programs
address a broad suite of promising low-carbon
technologies, including those that enable businesses and households to use energy more

20 MEETING OUR GREATEST CHALLENGES: INNOVATION TO FORGE A BETTER FUTURE
efficiently, bioenergy, renewable energy, nuclear
energy, electric grid technologies, carbon capture and storage, and advanced transportation
systems and fuels.

The Budget provides substantial support for
clean energy R&D as part of the Administration’s
21st Century Clean Transportation Plan.

Protecting and Increasing the
Doubling this investment would require the Nation’s Water Supply through
equivalent of about a 15 percent year-over-year Investment in Water Technology
increase in clean energy R&D funding in each
of the five years of the pledge. The Budget goes
beyond this increase for 2017 by providing $7.7
billion in discretionary funding for clean energy
R&D across 12 agencies. About 76 percent of
the funding is directed to DOE for critical clean
energy development activities, including over $2
billion for energy efficiency and renewable energy
technologies. For example, the Budget provides
over $280 million for the EV Everywhere initiative and $169 million for emerging technologies
in the building sector.

Investments in clean energy R&D at other
agencies that drive progress toward our pledge
include $512 million at the National Science
Foundation (NSF) for research in a wide array of
technology areas such as the conversion, storage,
and distribution of diverse power sources, and
the science and engineering of energy materials; $348 million at NASA for research in areas
such as revolutionary aircraft technologies and
configurations to enable fuel-efficient, low-carbon air transportation, and $106 million at the
Department of Agriculture (USDA) for competitive and intramural research funding and
education to support development of biobased
energy sources that range from sustainable and
economical forest systems and farm products
to increased production of biofuels. These investments build on an ongoing commitment to
advance renewable energy deployment and increase access to clean energy for all Americans.
The Budget also includes new mandatory
funding across the clean energy research, development, demonstration, and deployment
spectrum. The Budget provides $150 million in
mandatory funding for DOE’s ARPA-E in 2017,
which is part of the ARPA-E Trust proposal that
seeks to increase over five years the program’s
transformational clean energy technology R&D.

The Nation’s water supply is one of our most
precious resources. Yet the increasing frequency
and duration of droughts place extensive pressures
on the vitality of communities and ecosystems
across America. In 2012 alone, droughts affected
about two-thirds of the continental United States,
impacting water supplies, tourism, transportation,
energy and fisheries, and costing the agricultural sector alone $30 billion. Future short-term
droughts are expected to intensify in most regions
of the United States, and longer-term droughts
are expected to intensify in large areas of the
Southwest, the southern Great Plains, and the
Southeast. Climate change, along with population
growth, land use, energy use, and socioeconomic
changes, increases water demand and exacerbates
competition among uses and users of water.
To increase the resilience of the Nation’s water supplies to these stresses, the Administration
has developed an aggressive two-part water
innovation strategy with the goals of: first,
boosting water sustainability through the greater utilization of water-efficient and water-reuse
technologies; and, second, promoting and investing in breakthrough R&D that reduces the price
and energy costs of new water supply technology.
By continuing to support efforts by U.S.
businesses, industries, and communities to
make efficient use of water—especially in
water-stressed regions—and through better
management practices and technology, we have
the potential to considerably reduce water usage. High costs currently limit the ability of
most communities to turn non-traditional water
sources like seawater or brackish water into
fresh water. Investing in innovative technologies
designed to achieve “pipe parity” (the delivery of
new supplies of clean and fresh water at a total
cost, energy input, and carbon emission level

21

THE BUDGET FOR FISCAL YEAR 2017

equal to traditional supplies) can provide communities in water-stressed regions with new and
more effective options to meet their increasing
water supply needs. The Budget addresses these
challenges by investing in water conservation
and R&D of new water supply technology. The
Budget provides:
•	 $98.6 million for the Department of the
Interior’s (DOI’s) WaterSMART program
through the U.S. Geological Survey (USGS)
and the Bureau of Reclamation, which promotes water conservation initiatives and
technological breakthroughs. This request
is $10.3 million above the 2016 Budget.
•	 $4 million of new funding at USGS for near
real-time assessment of water use during
drought, which provides a regional and national picture of how water use is changing
during drought.
•	 $28.6 million to support R&D at the Bureau
of Reclamation. These funds include $8.5
million for the water technology solutions
challenge program, an ambitious technology
challenge prize focused on next-generation
advanced water-treatment technologies;
$5.8 million for desalination and water
purification, and $2 million to continue
the Open Water Data initiative to improve
accessibility of data. This request is $8.6
million above the 2016 Budget.
•	 $25 million in new funding for DOE to
launch a new Energy-Water Desalination
Hub focused on developing technologies to
reduce the cost, energy input, and carbon
emission levels of desalination. DOE would
also invest nearly $20 million in complementary R&D on desalination technologies
relevant to fossil, concentrated solar power,
and geothermal applications.
•	 $15 million in additional funding for USDA
intramural research on safe and abundant
water supplies to support U.S. agricultural
production and agricultural practices that
conserve water, such as building healthy
soils that retain water. The agriculture sector is the largest consumer of fresh water in
the United States. 

•	 $88 million for NSF to support basic water
research. The investment would enhance
the scientific and engineering knowledge
base and enable new technological solutions
that will increase the Nation’s water supply
and the quality of potable water and clean
water for use in agriculture and industry
processes or cooling.

Partnering with Communities
to Tackle Climate Risk
Across the Nation, the effects of climate
change, including more frequent and severe
storms, floods, droughts, and wildfires, thawing
permafrost, and sea level rise, are felt by communities, households, governments at all levels,
and individuals who are on the front lines of
the devastation these events often bring. For
example, over the last decade, the Federal
Government has incurred over $350 billion in
direct costs due to extreme weather and fire
alone. Given its far-reaching impacts, it is our
collective responsibility to better understand,
prepare for, and adapt to our changing climate.
The Budget demonstrates the Administration’s
continued commitment to increasing the resilience of communities—and the ecosystems
upon which they depend—in the face of growing
climate-related risks. It invests in programs
that advance our scientific understanding
of projected impacts, assist communities in
planning and preparing for future risks, and
deliver risk reduction and adaptation projects
on the ground. Through proactive investments
in these areas, we can save lives and reduce
long-term costs to families, communities and
the Nation.
In all of these investments, the Administration
recognizes that community demands and needs
vary. For the past six years, the Administration
has led efforts to transform the Federal
Government into an effective partner that customizes support for local communities instead
of relying on a one-size-fits-all approach. Placebased climate-preparedness efforts must be
developed in partnership with those communities—by the people who live in them, work in

22 MEETING OUR GREATEST CHALLENGES: INNOVATION TO FORGE A BETTER FUTURE
them, and stand to benefit from them. As the
Federal Government works with community
partners to prepare for climate-related risks, the
Administration is starting where it makes the
most sense: meeting communities where they
are.
Coastal Resilience. Climate change impacts
are often most clear in coastal areas, where communities are witnessing their coastlines receding
under the pressures of sea-level rise, storms, and
coastal erosion. The Budget includes a package of proposals aimed at reducing these risks
and building the resilience of communities and
natural resources to these impacts in a fiscally
responsible way.
First, the Budget proposes a $2 billion Coastal
Climate Resilience program, which would provide resources over 10 years for at-risk coastal
States, local governments, and their communities to prepare for and adapt to climate change.
This program would be paid for by redirecting
roughly half of the savings that result from repealing unnecessary and costly offshore oil and
gas revenue sharing payments that are set to be
paid to a handful of States under current law.
A portion of these program funds would be
set aside to cover the unique circumstances that
climate change forces some Alaskan communities to confront, such as relocation expenses for
Alaska native villages threatened by rising seas,
coastal erosion, and storm surges. The Budget
also provides the Denali Commission—an independent Federal agency created to facilitate
technical assistance and economic development
in Alaska—with $19 million, including $5 million to coordinate Federal, State, and tribal
assistance to communities to develop and implement solutions to address the impacts of climate
change. It also includes complementary investments totaling approximately $100 million
across a number of agencies and $150 million for
a Coast Guard icebreaker in the Arctic to help
address these challenges.
Second, the Budget invests $20 million, a fourfold increase above the 2016 enacted level, to help

coastal regions plan for and implement activities
related to mitigating extreme weather, changing
ocean conditions and uses, and climate hazards
through the National Oceanic and Atmospheric
Administration’s (NOAA’s) Regional Coastal
Resilience grants program. These competitive
grants to State, local, tribal, private, and non-governmental organization partners would support
activities such as vulnerability assessments, regional ocean partnerships, and development and
implementation of adapta­ ion strategies.
t
Flood Resilience. Climate change is expected to increase heavy downpours and cause
more rapid snowmelt, which is likely to intensify flooding in many areas of the United
States. That increased flood intensity—coupled
with development patterns that put people in
harm’s way—contributes to significant risks
from future flood events. However, flood maps
typically provide only a “snapshot” of flood
risk at a certain time and become outdated as
topographic, hydrologic, or climate conditions
change, as development densities change or
modify watersheds, or as engineering methods
and models improve. To help communities and
businesses understand the flood risks they face,
the Budget includes $311 million for National
Flood Insurance Program Risk Mapping efforts
to update the Nation’s flood maps.
Drought Resilience. The Budget continues
the Administration’s strong support for USDA
in its efforts to integrate climate considerations
into existing programs and to use programs
to drive resilience. The Budget continues the
collaborative effort initiated in 2016 to provide
information on the latest technologies and risk
management strategies to help farmers, ranchers, and landowners mitigate the impact of
climate change through USDA’s regional Climate
Hubs. It also includes $10 million for NOAA’s
Regional Integrated Science and Assessments
program, which would support expanded NOAA
work with resource managers to utilize climate
information to address drought and other challenges. The Budget’s $98.6 million investment in
DOI’s WaterSMART program—which provides
critical water data, promotes water conservation

THE BUDGET FOR FISCAL YEAR 2017

initiatives, and invests in technological breakthroughs—complements this effort. (See the
previous section on Protecting and Increasing
the Nation’s Water Supply through Investment
in Water Technology.) In addition, the USDA’s
Natural Resources Conservation Service (NRCS)
is leading efforts to promote soil health and integrate soil health management practices into
conservation programs and technical assistance. The Budget also continues efforts by the
NRCS, initiated in 2016, to develop a soil carbon
monitoring network to support ongoing GHG
monitoring. This network is a key component of
USDA’s Climate Strategy as it would allow USDA
to verify, for the first time, the United Nations
Framework Convention on Climate Change reporting and would also provide the foundation for
a farm-scale database to house soil carbon data.
Wildland Fire Resilience. Warmer temperatures and drier conditions anticipated
under climate change are projected to increase
the frequency and intensity of future wildfires,
increasing the risks they pose to nearby communities. It is a priority of the Administration
to ensure adequate funds are available to fight
wildland fires, protect communities and human
lives, and implement appropriate land management activities to improve the resiliency of the
Nation’s forests and rangelands. To accomplish
this, the Budget again proposes to establish a
new budget framework for wildland fire suppression, similar to how other natural disasters
are funded. This new framework includes a
base funding level of 70 percent of the 10-year
average for suppression costs within the discre­
tionary budget cap, and a cap adjustment that
would then be used for only the most severe fire
activity, which comprises two percent of wildfires,
but 30 percent of suppression costs. Paying for
the most severe and costly wildfire suppression
activity with a cap adjustment reduces the need
to transfer funds from other important programs
designed to more comprehensively manage wilderness landscapes, including the mitigation of
losses to property and timber from wildfire.
Crop Insurance and Resiliency.
The
Budget includes proposals for USDA’s crop in-

23
surance program that would incentivize farmers
to choose production practices that minimize
climate-change impacts, discourage farming
on environmentally sensitive lands and highly-erodable soils, and enhance resiliency in the
future through soil protection. These include
reducing the farmers’ subsidy by 10 percentage
points for harvest price revenue coverage and
reforming coverage for prevented planting.
Multi-Hazard Resilience. The Budget invests in programs that provide the science and
tools, technical assistance, and projects on-theground that enable communities to address the
full range of climate-related hazards. It provides
approximately $20 million to continue expanding and improving data and tools—available
through the online Climate Resilience Toolkit—
to help Tribes, communities, citizens, businesses,
planners, and others manage climate-related
risks and improve their resilience to extreme
events.
The Budget provides $4 million to support
a Resilience AmeriCorps pilot program at the
Corporation for National and Community
Service (CNCS) which would support roughly
175 AmeriCorps VISTA members to assist communities in planning for and addressing climate
impacts. In addition to CNCS’ investment, the
Budget provides $2 million for NOAA to train the
Resilience AmeriCorps members. The Budget
also continues to support the Corps of Engineers
programs that are already at work—such as the
Flood Plain Management Services Program and
the Silver Jackets—by providing $26 million for
technical and planning assistance to local communities to help them develop and implement
nonstructural approaches to reduce flood risk.
The Budget also invests $54 million in mitigation projects—including mitigation planning,
facilities hardening, and buyouts and elevation
of structures—through FEMA’s Pre-disaster
Mitigation Grant Program. Studies on mitigation activities conclude that Americans save
approximately $4 for every dollar invested in
pre-disaster mitigation.

24 MEETING OUR GREATEST CHALLENGES: INNOVATION TO FORGE A BETTER FUTURE
Preserving and Protecting
Public Lands and Oceans
America is home to some of the most beautiful
landscapes on the planet. Our Nation is blessed
with natural treasures from the Yosemite Valley
to the Everglades, with verdant forests, majestic
mountains, vast deserts, and lakes and rivers
teeming with wildlife. These natural resources
are not only beautiful, but are a vital economic
engine, supporting hundreds of thousands of jobs
in industries from recreation and tourism to timber and fishing and generating billions of dollars
in economic activity.
America’s natural landscapes face growing
pressures, however, not only from agricultural,
commercial, industrial, and residential development, but also from a changing climate that
brings increased drought, wildfires and other
dangers. As a result, the need for investments
in natural and cultural resources on Federal and
State lands is greater than ever. All of these forces necessitate coordinated efforts among Federal,
State, tribal, local, and private land managers,
who share a collective responsibility for preserving and restoring natural systems that are vital
to mitigating climate impacts, such as soil and
other carbon reservoirs.

ational opportunities for millions of Americans
in iconic places that range from Grand Canyon
National Park to local parks in nearly every
county across the Nation. The highly successful program reinvests royalties from offshore
oil and gas activities into public lands, with the
goal of using the benefits of one non-renewable
resource for the protection of another—our irreplaceable landscapes. Through the LWCF,
the Budget invests $900 million annually into
conservation and recreation projects to conserve lands in or near national parks, refuges,
forests, and other public lands. Through strategic and landscape-level land acquisition, public
access to lands for sportsmen and hunters, and
grants to States for recreation and conservation projects, the LWCF is a cornerstone of this
Administration’s conservation agenda.

The Budget includes robust funding to support such efforts. It invests in proven programs
that allow Federal agencies and their partners
to better understand, prepare for, and adapt
to natural hazards, including those worsened
by climate change. Public land management
agencies administer programs that build the resilience of natural resources and communities to
hazards, such as drought, coastal flooding, and
wildland fire. These programs provide actionable
science, data, and technical assistance that enhance the ability of natural resources to adapt to
changing conditions, which in turn benefits our
communities.

National Park Service (NPS) Centennial.
For over 100 years, NPS sites have preserved and
shared our cultural and historical identity. The
iconic places protected by NPS present America’s
unique history and draw tourists from across
the United States and around the world. As we
continue to celebrate the centennial anniversary
of the Nation’s great parks, the Budget proposes
to increase park services for visitors and make
targeted investments that would improve NPS
facilities. This opportunity is an historic effort to
upgrade and restore national parks and engage
and inspire younger generations to visit and care
for the Nation’s parks into the future. With more
and more American families living in urban
spaces that often lack easy access to our great
outdoors, it is vital to introduce a new generation to our public lands. That is why the Every
Kid in a Park initiative provides all fourth-grade
children free passes to U.S. public lands and waters. To support this effort, the Budget proposes
$25 million for youth engagement and bringing
youth from underserved communities to national
parks and forests.

Land and Water Conservation Fund.
Created 50 years ago, the Land and Water
Conservation Fund (LWCF) is used to preserve
historic resources, protect endangered wildlife,
restore forest ecosystems, and provide recre-

As NPS enters its second century, it is working to assess and build resilience to the effects of
climate change in its 86 ocean and coastal parks
and over its 12,000 miles of shoreline. The effects
of climate change deteriorate park shorelines,

25

THE BUDGET FOR FISCAL YEAR 2017

threatening our resources, infrastructure, and
public recreation opportunities. Working with
scientists and other partners, NPS is developing
adaptation strategies to protect these coastal resources and to boost their long-term resilience.
Meanwhile, public lands continue to experience
record visitation levels. Such visits do more than
provide scenic views and inspiration— they drive
an estimated $51 billion in economic impact, and
support hundreds of thousands of jobs in local
communities across the United States.

is committed to successful implementation of
the sagebrush resource management plans, as
well as the Administration’s comprehensive
rangeland fire strategy. The Budget proposes
$23 million over the 2016 level within DOI—and
more than twice the amount of funding enacted
in 2015—for activities directly affecting sagegrouse protection. Across private lands, NRCS
is investing $211 million by the end of 2018 to
help hundreds of ranchers conserve or restore
3.7 million acres of additional habitat.

The Budget proposes $860 million in discretionary and mandatory funding to allow NPS,
over 10 years, to make targeted, measurable,
and quantifiable upgrades to all of its highest
priority non-transportation assets and restore
and maintain them in good condition. Doing
so avoids increased deterioration and costs for
future generations. The Budget also proposes
matching funds to leverage contributions from
the private sector for critical signature projects.

Ocean Science and Conservation. About
a third of the carbon dioxide in the atmosphere
dissolves into the ocean, and the increased global carbon dioxide levels are the main driver of
ocean acidification, which in turn affects marine ecosystems. To address this complex issue
and increase understanding of the consequences of ocean acidification on marine resources,
the Budget includes $22 million, a $12 million
increase over 2016 levels. To help fishing communities, which face significant climate challenges,
become more resilient to the impacts of fisheries
disasters, the Budget provides $9 million. These
competitive funds would assist communities in
becoming more environmentally and economically resilient through activities such as ecosystem
restoration, research, and adaptation.

Sage-Grouse Protection. In September
2015 the DOI’s Fish and Wildlife Service (FWS)
issued a landmark determination that the
greater sage-grouse does not warrant protection
under the Endangered Species Act at this time.
This decision was possible because of the collaborative strength of Federal, State, tribal, and
private conservation efforts over many years and
the continued commitment of all partners—including the Federal Government—to conserving
the sagebrush habitat in what is arguably the
largest landscape-level conservation effort in
U.S. history. Moreover, the FWS determination and the conservation mechanisms in place
provide the regulatory certainty needed for sustainable economic development across millions
of acres of Federal and private lands throughout
the western United States. The Administration
is committed to meeting its responsibilities to
conserve vital sagebrush ecosystems.
The Budget builds upon unprecedented investments provided in 2016 to protect the western
United States’ sagebrush ecosystems. On lands
managed by the Bureau of Land Management
and the U.S. Forest Service, the Administration

Leading International Efforts to
Cut Carbon Pollution and Enhance
Climate Change Resilience
Because climate change is a global challenge, it is imperative for the United States to
couple action on climate change at home with
leadership internationally, as called for in the
President’s Climate Action Plan. To support
this objective, the Budget provides $1.3 billion in discretionary funding to advance the
goals of the Global Climate Change Initiative
(GCCI) through important multilateral and
bilateral engagement with major and emerging economies. This amount includes $750
million in U.S. funding for the Green Climate
Fund, which would help developing countries
leverage public and private financing to invest

26 MEETING OUR GREATEST CHALLENGES: INNOVATION TO FORGE A BETTER FUTURE
in reducing carbon pollution and strengthening resilience to climate change.
Assisting these countries in meeting emissions reduction commitments and developing
their economies along low-emissions pathways would play a vital role in mitigating
some of the most serious risks from climate
change both at home and abroad. Assisting
developing countries in their climate adaptation efforts is critical to helping the poorest
and most vulnerable nations prepare for, and
build resilience to, the impacts of climate
change. These efforts would not only help preserve stability and security in fragile regions
that are of strategic importance to the United
States, but also help open these regions to U.S.
businesses and investment. 
More broadly, GCCI funding enables the
United States to provide international leadership through the Department of State, the
U.S. Agency for International Development,

and the Department of the Treasury to support our developing-country partners in their
efforts to meet their emissions reduction commitments, including by expanding clean and
efficient energy use, reducing deforestation
and forest degradation, conserving the world’s
remaining tropical rainforests, and phasing
down the production and consumption of substances with high global warming potential,
such as such as hydrofluorocarbons. GCCI
funding would help support U.S. commitments
made in the context of the Paris Agreement
and put the United States on a pathway to
doubling U.S. grant-based support for international climate adaptation activities by
2020. Federal agencies will also systematically integrate climate-resilience considerations
into international development investments
so that U.S. investments overseas remain sustainable and durable and support the poorest
and most vulnerable communities in their
efforts to cope with the adverse impacts of
extreme weather events and climate change.

INVESTING IN RESEARCH AND DEVELOPMENT
Because of the critical role that R&D
plays in expanding the frontiers of human
knowledge, tackling the Nation’s biggest challenges, and driving the economy forward, the
Administration has consistently prioritized
robust R&D investments since the start of the
Administration.
The Budget sustains the Administration’s
consistent prioritization of R&D with an investment of $152 billion for R&D overall through
both discretionary and mandatory funding
proposals. This reflects a four percent increase
from 2016 and targets resources to the creation
of transformative knowledge and technologies
that can benefit society and create the businesses and jobs of the future. Specifically, the
Budget prioritizes basic research, the type of
R&D that is the most likely to have spillover
impacts to multiple endeavors and in which the
private sector typically under-invests. It also
includes $7.7 billion in discretionary funding

for clean energy R&D in 2017, the first step toward the Mission Innovation doubling goal.
Of the overall $152 billion investment in
R&D, $4 billion is mandatory funding because
the discretionary levels set by the Bipartisan
Budget Act are not sufficient for the Nation
to take full advantage of the opportunities for
R&D investments to create jobs and grow the
economy.

Revitalizing American Manufacturing
After a decade of decline, American manufacturing has added 878,000 new jobs since
February 2010, new factories are once again
opening their doors, and global investment in
the U.S. manufacturing sector is increasing.
The Budget proposes $2.0 billion in coordinated,
cutting-edge manufacturing R&D, while also
expanding industry-driven workforce training
and providing additional resources through the

THE BUDGET FOR FISCAL YEAR 2017

Manufacturing Extension Partnership to help
America’s small manufacturers access the technology and expertise they need to expand. This
would help turn America’s increased manufacturing competitiveness into a lasting advantage
through smart, strategic investments that build
on our strengths. Most importantly, the Budget
makes new investments to grow a national network of innovative R&D hubs to help keep U.S.
manufacturing in the lead on technology.
This network, the National Network for
Manufacturing Innovation, plays an important
part in this revitalization of American manufacturing. In his 2012 State of the Union Address,
the President called for the creation of a network
of manufacturing institutes to boost advanced
manufacturing, foster American innovation, and
attract well-paying jobs that would strengthen
the middle class. Later that year, an interagency
team led by the Department of Defense launched
the first pilot institute. Proving that revitalizing
American manufacturing is a topic we can all
agree on, the Congress supported this initiative
in a bipartisan fashion by passing the Revitalize
American Manufacturing and Innovation Act in
December 2014, which authorizes manufacturing innovation institutes to come together into
a shared network and codifies authority for the
Department of Commerce to coordinate this
multi-agency initiative.
To date, the Administration has already
awarded seven institutes.
Those institutes
represent more than $500 million in Federal
resources matched by more than $1 billion of
non-Federal resources, all focused on securing
U.S. leadership in the emerging technologies that
make America’s industry more competitive today
and ensure continued groundbreaking innovation tomorrow. The Budget builds on the seven
institutes awarded, two more institutes with
competitions already underway, and four more
institutes funded in 2016 by proposing five additional manufacturing institutes in 2017 in the
Departments of Commerce, Defense, and Energy.
In total, the Budget proposes more than $250
million in discretionary resources to create and
sustain manufacturing innovation institutes.

27
Each of these new institutes would bring together companies, universities, community colleges,
and Government to co-invest in the development
of world-leading manufacturing technologies
and capabilities that U.S.-based manufacturers can apply in production. For example, the
Digital Manufacturing and Design Innovation
Institute in Chicago has attracted more than
140 partners and, in its first six months alone,
hosted over 2,000 visitors to its smart factory
demonstration facility, modeling state-of-the-art
techniques for integrating digital technologies
into a factory production line. Collectively, the
institutes are attracting a swelling membership
from across Fortune 500 companies, leading
research universities, regional non-profits, and
small businesses with over 800 members to-date.
They have launched 147 R&D projects to accelerate transformative manufacturing technologies
into production, demonstrating the significant
momentum underway.
The Budget also includes a mandatory
spending proposal of $1.9 billion to build out
the remaining 27 institutes to create a national network of 45 manufacturing institutes
over the next 10 years that would position the
United States as a global leader in advanced
manufacturing technology.

Advancing Biomedical Research at the
National Institutes of Health (NIH)
The Budget provides $33.1 billion—including $1.8 billion in new mandatory funding—to
support biomedical research at NIH. This funding would allow for almost 10,000 new and
competing NIH grants that will help scientists
better understand the fundamental biological
mechanisms that underpin health and disease
to improve health and save lives. The Budget
provides increased resources for the President’s
Precision Medicine Initiative and continues support for the Brain Research through Advancing
Innovative Neuroethologies (BRAIN) initiative,
launched by the President in 2013, which is
helping to revolutionize our understanding of
the human brain.

28 MEETING OUR GREATEST CHALLENGES: INNOVATION TO FORGE A BETTER FUTURE
Enhancing Investments in Cancer
Research. As a part of the cancer “moonshot”
the President announced in the State of the
Union Address, the Budget provides an increase
of $755 million to accelerate progress in preventing, diagnosing, and treating cancer. The
increase is in addition to NIH’s significant investment for the cancer moonshot in 2016. The
Budget’s multi-year cancer initiative, which begins in 2016, provides $680 million to NIH and
$75 million to the Food and Drug Administration
in 2017, to improve health and outcomes for
patients through investments in research and
infrastructure, and brings together researchers
across sectors and scientific disciplines. Notably,
these funds would significantly increase support
for research to help realize the promise of cancer
immunotherapy.
Precision Medicine Initiative. The Budget
includes $300 million for NIH to continue the
progress of the President’s Precision Medicine
Initiative, which was launched in 2016 to enable
a new era of medicine for all by accelerating
research into the development of treatments tailored to specific characteristics of individuals. The
Budget supports efforts underway to establish a
voluntary national research cohort of one million
or more Americans, expand research to define
cancer subtypes and identify new therapeutic
targets, modernize the regulatory framework
for DNA-sequence-based diagnostic tests, and
improve health data sharing and interoperability so patients can access their health records
for research, providers can recommend optimal
treatments and researchers can use individual
and population data to develop new insights
and therapies. It also supports activities to engage patients, including those from historically
underserved communities, and raise awareness
about the promise of precision medicine for all.
BRAIN Initiative. The Budget includes
$195 million for NIH for the BRAIN Initiative,
a bold research effort to revolutionize our understanding of the brain and to uncover new ways
to treat, prevent, and cure brain disorders like
Alzheimer’s, schizophrenia, autism, epilepsy, and
traumatic brain injury. The initiative has grown

since its launch in 2013 to include five agencies,
and dozens of major foundations, private research institutions, universities, companies, and
advocacy organizations have aligned their research efforts to advance the BRAIN Initiative.

Investing in Civil Space Activities
The Budget invests in space exploration
and technological advancements, providing
$19 billion, including $763 million in mandatory funding in 2017, to NASA to further U.S.
leadership in space and at home. The Budget
supports exploration of the Solar System, including robotic missions to Mars and to the Sun, and
funds the development and operation of a fleet
of spacecraft to study our own planet, increasing
our understanding of the Earth and its climate.
The Budget supports innovative public-private
partnerships to enable new industries and capabilities in space and to ensure that our space
programs are sustainable and affordable. The
Budget also makes investments in new groundbreaking technologies, such as solar-electric
propulsion that would allow us to push out into
the Solar System not just to visit, but to stay.

Addressing Challenges in
Agriculture through R&D
Recognizing the importance of science and
technology to meet challenges in agriculture,
the Budget increases investment in three major
areas of agricultural R&D:
•	 Grants through USDA’s flagship competitive peer-reviewed research program, the
Agriculture and Food Research Initiative
(AFRI), are funded at $700 million, including $325 million in mandatory funding. This
is the full authorized level and double the
2016 funding level. It would enable USDA
to accept many qualified research proposals
that it previously would have rejected due
to funding constraints. AFRI-supported
research would enable USDA to respond
to critical problems and challenges facing
the Nation such as ensuring an abundant
supply of safe water for agricultural uses,
responding to climate change, understand-

THE BUDGET FOR FISCAL YEAR 2017
ing and restoring soil health, and improving
food safety and quality.
•	 USDA’s in-house research programs through
the Agricultural Research Service are funded at almost $1.2 billion, which includes
increases for current and new programs for
climate change resilience and vulnerability,
pollinator health, agricultural microbiomes,
responding to antimicrobial resistance, as

29
well as research on foreign animal diseases, soil health, avian influenza, and for safe
and abundant water supplies to support
agricultural production.
•	 The Budget provides $94.5 million for
construction and renovation of key infrastructure investments based on USDA’s
facility modernization plan.

MEETING OUR GREATEST CHALLENGES:
OPPORTUNITY FOR ALL
Since the onset of the Great Recession, we have
restored economic growth and created millions of
jobs. We have also laid the groundwork for longterm growth through investments in education,
job training, infrastructure, and research and
development that help businesses thrive and create high-paying jobs. But while the benefits of a
growing economy are beginning to be more widely
shared, too many hard-working Americans still
are not experiencing those benefits. Too many are
struggling to make ends meet.
This economic insecurity is due in part to
changes in the U.S. economy that began long before the recession and will continue in the years to
come. With increased globalization and automation in the workplace, workers have less leverage
and job security. Because the face of the Nation’s
workforce has changed dramatically since many
key benefit structures were established decades
ago, those structures need updating.
As the President stated in the 2016 State
of the Union Address, one of the Nation’s key
challenges is how to give everyone a fair shot
at opportunity and security in this new economy. This is not only a moral imperative, but
an economic one. The Nation does best when
everyone shares in—and contributes to—our
success. Failing to tap the potential of every

American weakens the economy and harms us
all. That is why the Budget makes a series of
investments to ensure that if you work hard,
you have a chance to get ahead and ensure a
better future for your children.
The Budget invests in education from our
youngest learners to those striving to complete
college. It invests in job training to help workers get the skills they need to secure better
paying jobs, updates worker benefits to reflect
today’s workforce and economy, and calls for a
higher minimum wage and expanded working
family tax credits. The Budget also takes new
steps to reduce poverty and reinvigorate distressed communities.
It builds on the success of the Affordable Care
Act to improve the health of all Americans, including through investments in mental health
treatment and treatment for opioid use disorders.
It supports meaningful criminal justice reform
to break the cycle of poverty, criminality, and incarceration that traps too many Americans and
weakens too many communities. The Budget
also reforms the Nation’s immigration system to
make American society safer and more just, and
to boost U.S. economic growth.

EDUCATING FOR THE FUTURE: FROM EARLY LEARNING TO COLLEGE
Americans must be prepared with the skills
and knowledge necessary to compete in today’s
global economy and achieve economic security.
Expanding educational opportunities is critical

to equipping all children with these skills and
positioning them to succeed as adults, and increasing educational attainment is central to the
Nation’s future economic strength.

32

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

We have made significant progress in
expanding educational opportunities. By focusing on improving student outcomes and
tying investments to evidence-based reform, the
Administration has worked to support States and
communities as they establish high academic
standards that will prepare students for success
in college and future careers, improve teacher
effectiveness, and use data to ensure students
graduate from high school prepared for college
and a successful career. These investments have
given teachers, school districts, and States the
tools to turn around some of the Nation’s lowest-performing schools. The Nation’s high school
graduation rate is at an all-time high and we
have made college easier to access and afford.
However, there is more we must do to improve
all levels of education, from early childhood
through college, and ensure the Nation’s workforce has the skills American businesses need.
To meet this challenge, the Budget builds on our
progress and reflects key developments over the
past year, most significantly the reauthorization
of the Elementary and Secondary Education Act,
a bipartisan effort that was eight years overdue. The new law, the Every Student Succeeds
Act (ESSA), embraces many reforms the
Administration has long supported, including
requiring States to define and set high standards
for college and career readiness, ensuring that
States are held accountable for the success of all
students, spurring innovation in education, encouraging States to reduce unnecessary testing,
and expanding access to high-quality preschool.
The Budget supports ESSA implementation
and builds on its priorities. It reflects a strong
commitment to ensuring that all students receive
a high-quality education by improving access to
early education, preparing elementary and secondary education students for success, increasing
access to quality, affordable higher education,
and continuing to build the evidence base for
what works to improve student outcomes. The
Budget provides $69.4 billion in discretionary
funding for Department of Education programs,
an increase of $1.3 billion from the 2016 enacted
level adjusted for comparability.

Improving Access to High-Quality,
Affordable Early Education
High-quality early education provides children
with a foundation for success in school and puts
them on a path toward realizing their full potential. Supporting children during this critical
stage of development yields long-lasting benefits,
providing a strong return on investment. This
is particularly true for low-income children, who
too often start kindergarten far less prepared
than their peers.
Preschool for All. The Budget maintains
support for the President’s landmark Preschool
for All initiative to ensure four-year-olds across
the Nation have access to high-quality preschool
programs. The Department of Education initiative establishes a partnership with States to
provide all four-year-olds from low- and moderate-income families with high-quality preschool,
while providing States with incentives to expand
these programs to reach additional children
from middle-class families and put in place fullday kindergarten policies. The initiative is paid
for through an increase in tobacco taxes that will
help reduce youth smoking and save lives.
With the support of Federal funding made
available
through
the
Administration’s
Preschool Development Grants (PDG) program,
18 States are currently developing and expanding high-quality preschool programs in targeted
high-need communities. This work will continue
under the newly authorized PDG program in
ESSA, the first program in a major elementary
and secondary education statute devoted solely
to the expansion of high-quality preschool and
early education, a clear recognition of the importance of preschool in ensuring students are
successful in school.
The Budget provides $350 million for Preschool
Development Grants at the Department of Health
and Human Services (HHS)—which are jointly
administered by HHS and the Department of
Education under ESSA—an increase of $100
million from the 2016 enacted level. The Budget
also provides $907 million for the Department
of Education’s early intervention and preschool

33

THE BUDGET FOR FISCAL YEAR 2017

services for children with disabilities, an increase of $80 million from the 2016 enacted
level. This proposal includes up to $15 million
for competitive grants for early identification of
and intervention for developmental delays and
disabilities, with a potential focus on autism,
intended to help identify, develop, and scale-up
evidence-based practices.
Head Start. The Budget provides $9.6 billion
for HHS’s Head Start program, which delivers
comprehensive early childhood services to support the learning and development of America’s
neediest children. This funding level, a $434
million increase, includes a total of $645 million
for the Administration’s Early Head Start-Child
Care Partnerships, through which local Early
Head Start grantees partner with child care providers and leverage Early Head Start standards
to expand access to high-quality early care and
education for infants and toddlers. The Budget
also builds on the nearly $300 million investment made in 2016 to increase the number of
children attending Head Start in a full school
day and year program, which research shows is
more effective than programs of shorter duration and also helps meet the needs of working
parents. The Budget continues funding for those
programs that expand their full day and full year
offerings with 2016 resources, and provides an
additional $292 million to enable more programs
to expand their full day and full year programs.
Taken together, the 2016 and 2017 investments
will mean that more than half of all Head Start
children will now be provided a full school day
and year program.
Home Visiting. The Budget invests $15
billion in new funding over the next 10 years to
extend and expand evidence-based, voluntary
home visiting programs, which enable nurses,
social workers, and other professionals to work
with new and expecting parents to help families
track their children’s healthy development and
learning, connect them to services to address
any issues, and utilize good parenting practices that foster healthy development and later
school success. The program builds on research
showing that home visiting programs can signifi-

cantly improve maternal and child health, child
development, learning, and success. As with
Preschool for All, the proposal is paid for through
an increase in tobacco taxes. To complement this
investment, the Budget includes $20 million for
a new initiative in rural home visiting that the
Department of Agriculture (USDA) will administer in coordination with HHS. This initiative
will focus exclusively on providing home visiting services in the most remote rural and tribal
areas.
As discussed below under Making the 21st
Century Economy Work for Workers, the Budget
also makes historic investments in expanding
access to quality, affordable child care. This
investment is designed to meet two important
purposes—help parents afford child care so they
can work, and help children access quality care
that supports their healthy development.

Putting Students on a Path
to College and Careers
ESSA, the new elementary and secondary education law, cements many of the Administration’s
key education reforms and reflects the progress
States and districts have made in implementing
these important changes. Building on earlier
Administration initiatives, it requires States to
set high college and career standards for all students, invests in place-based and evidence-based
strategies, supports the recruitment and retention of effective teachers and school leaders, and
replicates high-quality charter schools. The
Budget provides $24.4 billion to the Department
of Education to support ESSA and related programs, an increase of $629 million above the
2016 enacted level.
Funding High-Poverty Schools and the
Important Work of Improving LowPerforming Schools. The Budget proposes a
$450 million increase for Title I, which ESSA
maintained as the Department’s largest K-12
grant program, and the cornerstone of the
commitment to support schools in low-income
communities with the funding necessary to
provide high-need students access to an excel-

34

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

lent education. Title I supports local solutions
in States and school districts, while ensuring
that students make progress toward high academic standards. As part of Title I, ESSA
requires annual statewide assessments that
measure student achievement, and ensure that
the information about student achievement is
available to teachers, school leaders, families,
and communities. While retaining this critical
accountability measure, the law also encourages
States to reduce excessive standardized testing,
aligned with the efforts of the Department of
Education’s testing action plan that supports
maximizing the time students spend learning.
ESSA also holds States and school districts accountable for improving their lowest-performing
schools, requiring evidence-based interventions
to turn them around. The Budget calls for dedicating additional funds within Title I to address
the urgent need to improve the Nation’s lowest-performing schools. This dedicated funding,
which will be distributed based on the Title I
formulas, will ensure States and school districts
have the support necessary to successfully turn
around these schools.
Supporting Computer Science for All and
Rigorous STEM Coursework. There are currently more than 600,000 high-paying tech jobs
open across the United States, and by 2020, 51
percent of all STEM jobs are projected to be in
computer science-related fields. More than 9 of
10 parents want computer science taught at their
child’s school. However, by some estimates, just one
quarter of all U.S. K-12 schools offer computer science with programming and coding even as other
advanced economies, such as England, are making
it available for all students between the ages of 5
and 16. Wide disparities exist even for those who
do have access to these courses. For example, of
the very few schools that offer advanced placement
computer science courses, only 15 percent of enrollees are girls, and fewer than eight percent are
African-American or Latino students. Disparities
in computer science are emblematic of the large
gaps in student access and engagement in STEM
courses overall; only half of high schools offer calculus, and only 63 percent offer physics.

To address these disparities, the Budget provides resources to empower States and districts
to create high-quality computer science learning
opportunities in grades K-8 and access to computer science courses in high school. Under the
Computer Science for All proposal, the Budget
includes $4 billion in mandatory funding over
three years for States to increase access to K-12
computer science and other rigorous STEM
coursework by training more than 250,000
teachers, providing infrastructure upgrades,
offering online courses, and building effective
partnerships. Complementing the mandatory
proposal, the Budget also dedicates $100 million
in discretionary funding for Computer Science
for All Development Grants to help school districts, alone or in consortia, execute ambitious
computer science expansion efforts, particularly
for traditionally under-represented students.
Both the mandatory and discretionary proposals would also encourage States and districts
to expand overall access to rigorous STEM
coursework.
Redesigning and Strengthening America’s
High Schools. The Budget provides $80 million for a new, competitive program to promote
the redesign of America’s high schools by integrating deeper learning and personalized
instruction, with a particular focus on STEMthemed high schools that expand opportunities
for all students, including girls and other under-represented groups in STEM fields. This is
complemented by the $375 million in private and
public sector commitments that were announced
in November 2015 as part of the White House
Summit on Next Generation High Schools.
Promoting Student Support and Academic
Enrichment. To compete in the 21st Century
economy, students need a well-rounded education and rigorous coursework. To help ensure all
students have such access, the Budget provides
$500 million for Student Support and Academic
Enrichment Grants, newly authorized in ESSA,
which would provide funds for States and school
districts to support student achievement and promote academic enrichment opportunities. This
flexible funding can support expanding STEM

THE BUDGET FOR FISCAL YEAR 2017

opportunities and the arts, improving supports
for student learning, and enhancing the use of
technology for instruction.
Promoting Socioeconomic Diversity and
School Choice. Poverty and negative educational outcomes are closely linked, with students
who attend high-poverty schools often struggling
to meet high standards and finish high school
college- and career-ready. Research suggests
that socioeconomically diverse schools can lead to
improved outcomes for disadvantaged students.
Based on this research and the work already
underway in communities across the United
States, the Budget supports a new initiative that
would support new and ongoing State and local
efforts to develop and implement strategies that
increase socioeconomic diversity in the Nation’s
preK-12 schools.
The Stronger Together initiative would make
$120 million in voluntary competitive grants
available to school districts or consortia of school
districts that are interested in exploring ways to
foster socioeconomic diversity through a robust
process of parental, educator and community
engagement, and data analysis; and to school
districts and consortia of school districts that
already have set goals and developed strategies
and are ready to begin implementation. The
funding would be available for five-year projects.
In addition to this proposal, the Budget
strengthens its support for investments in
school choice programs designed to increase
the supply of high-quality schools available to
all students, including both magnet schools and
charter schools. The Budget proposes $115 million for magnet schools, an $18 million increase
compared to 2016, which would complement
the Stronger Together program through a new
provision under ESSA that allows districts to
take into account socioeconomic diversity in the
design and implementation of magnet school programs. The Budget also proposes $350 million
for charter schools, a $17 million increase over
2016, for the start-up, replication, and expansion
of effective charter schools that would improve

35
students’ access to high-quality educational opportunities regardless of their zip code.
Maintaining a Commitment to Evidence,
Data, and Innovation. The Budget maintains
a strong commitment to evidence, data, and innovation in education. The Budget provides $180
million for Education Innovation and Research,
a new program authorized by ESSA. The program is modeled on the Investing in Innovation
program, which has been the Administration’s
signature effort to develop and test effective
practices that improve student outcomes, such
as implementing college- and career-ready
standards, using data to inform instruction and
personalize learning, and improving low-performing schools. This funding level represents
an increase of $60 million compared to Investing
in Innovation’s 2016 funding. The Budget amplifies this commitment by providing $209 million
for the Institute of Education Sciences’ Research,
Development, and Dissemination program to produce strong evidence on effective strategies for
improving student learning in early childhood,
K-12, postsecondary, and adult education. An investment of $81 million in the State Longitudinal
Data Systems program would support State and
school district efforts to provide educators, parents, policymakers, researchers, and the public
with information on the performance of schools
and what works in education.
Supporting America’s Teachers.
The
Budget invests $2.8 billion in discretionary
funding for programs to provide broad support
for educators at every phase of their careers,
from ensuring they have strong preparation
before entering the classroom, to pioneering
new approaches to help teachers succeed in the
classroom, and equipping them with tools and
training they need to implement college- and
career-ready standards. The Budget provides
$250 million for the Teacher and School Leader
Incentive program to drive improvements in
school districts’ human capital management
systems through innovative strategies for
recruiting, developing, evaluating, and retaining excellent educators. A new $125 million
Teacher and Principals Pathways program, to be

36

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

proposed in the next Higher Education Act reauthorization, would support teacher and principal
preparation programs and nonprofits partnering with school districts to create or expand
high-quality pathways into teaching and school
leadership, particularly in high-need subjects
such as STEM. A new program, Teach to Lead,
would fund teacher-led projects to improve the
quality of education, drawing on the knowledge
and passion of teachers to identify, implement,
and expand effective practices. Furthermore,
the Budget includes RESPECT: Best Job in the
World, a $1 billion mandatory initiative that
would support a nationwide effort to attract and
retain effective teachers in high-need schools by
increasing compensation and paths for advancement, implementing teacher-led development
opportunities to improve instruction, and creating working conditions and school climates
conducive to student success. This proposal is
a key strategy in the Department’s efforts to
ensure all students’ equitable access to effective
teachers.  

Promoting College Affordability
and Completion
Today’s economy increasingly demands highly-educated workers. Higher education is one of
the clearest pathways into the middle class, and
decades of research has shown large returns to
higher education in terms of labor market earnings, health, and well-being. In fact, research
shows that the typical college graduate earns
twice as much over his or her lifetime as the typical high school graduate. Further, over the next
decade, jobs requiring education beyond high
school will grow more rapidly than jobs that do
not, with more than half of the 30 fastest-growing
occupations requiring postsecondary education.  
From the start of the Administration, the
President has focused on making college more
accessible and affordable for all Americans, with
the goal of making the United States the leader once again in college completion, as it was a
generation ago. The Administration ended the
inefficient guaranteed student loan program and
reinvested the savings into making college more

affordable, including strengthening and expanding the Pell Grant program, the cornerstone of
opportunity for low- and moderate-income students. The Pell Grant program is now supporting
scholarships for significantly more students to
attend college than when the President took
office.
In December, the American Opportunity Tax
Credit (AOTC)—first enacted in the Recovery
Act—was made permanent. The AOTC expands
the level of support for college by providing a
maximum credit of $2,500 per year for the first
four years of college—up to $10,000 per student
to cover tuition and educational expenses. The
AOTC is partially refundable, so it provides
critical college tuition help to low- and moderateincome families. The AOTC will cut taxes by over
$1,000, on average, for nearly 10 million families
in 2016.
Overall, since 2009, these investments in Pell
Grants and tax credits have doubled, increasing the access and affordability of college for
students.
The Administration has also made historic
investments in the creation and expansion
of community college programs aligned to
in-demand jobs in high-growth industries
from health care to information technology
(IT). From 2011 through 2014, some $2 billion in funding reached more than half of all
community colleges across the United States,
enrolling over 176,000 students to date.
Employers have donated thousands of dollars
in equipment, scholarships, tuition, and more
to support these programs.
The Administration also has made it easier
and faster for students to apply for Pell Grants
and other financial aid. Since taking office, the
Department of Education has significantly simplified the Free Application for Federal Student
Aid, known as the FAFSA. The Administration
has reduced the time required to complete the
FAFSA by two-thirds, to about 20 minutes, by revamping the online form for all families so they
can skip questions that are not relevant to them

THE BUDGET FOR FISCAL YEAR 2017

and automatically retrieve needed tax information when filling out the FAFSA. More than six
million students and parents took advantage of
the ability to electronically retrieve their income
information from the Internal Revenue Service
(IRS) when completing their 2014-2015 FAFSA,
an innovation that improves both speed and
accuracy.
Building on this progress, starting in calendar
year 2016, students and families will be able
to fill out the FAFSA three months earlier—in
October—so they can understand the financial
resources available for them as they are applying to college. Families filling out the FAFSA in
October 2016 will be able to fill it out immediately by electronically retrieving information from
their 2015 tax returns. Families and students
will no longer have to wait until the next year’s
tax season to finalize their FAFSAs and to learn
about their financial aid. The Administration is
working with college financial aid officers and
State aid programs to ensure that they align
their financial aid awards with the new Federal
schedule so students have as much information
as possible early in their college search process.
These changes—coupled with further FAFSA
simplification proposals in the Budget—could
encourage hundreds of thousands of additional
students to apply for and claim the aid they are
eligible for.
Making Two Years of Community College
Free for Responsible Students. The Budget
ensures all Americans have the opportunity to
pursue and succeed in higher education, with
a goal of making at least two years of college
as universal as high school. America’s College
Promise (ACP) would provide funding to support community colleges, as well as four-year
Historically Black Colleges and Universities and
other Minority-Serving Institutions, that undertake a set of reforms to improve the quality of
their programs of study. The funding provided
under ACP will offset tuition—fully in community colleges—before the application of Pell grants
or student loans. This would allow students who
qualify for Pell grants to use financial aid to cov-

37
er additional costs, such as academic supplies
and living expenses.
Since the President announced his plan,
Tennessee’s free community college program,
Tennessee Promise, has helped increase enrollment in State colleges by over 4,000 students.
Ten additional States and communities have
created programs to provide free community
college, including legislation enacted in Oregon
and Minnesota, and new initiatives in Rhode
Island, Richmond and Scotland Counties in
North Carolina, and at Sinclair Community
College (OH), Harper College (IL), Community
College of Philadelphia (PA), Milwaukee Area
Technical College (WI), Madison Area Technical
College (WI), and Ivy Tech Community College
(IN). Furthermore, legislation creating free community college has been introduced at the State
level in at least 12 States.
There is Federal momentum as well. Senator
Baldwin (WI) and Representative Scott (VA)
have proposed the America’s College Promise
Act of 2015.
Building Effective Education and Training
in High-Demand Fields. In addition to America’s
College Promise, the Budget includes $75 million
for a complementary tuition-free investment in
the American Technical Training Fund (ATTF).
The ATTF would provide competitive grants to
support the development, operation, and expansion of innovative, evidence-based, tuition-free
job training programs in high-demand fields
such as manufacturing, health care, and IT.
Promoting Completion through Pell Grants.
The Budget continues the President’s commitment to college affordability by ensuring that Pell
Grants keep pace with inflation and by investing
in new efforts that promote college completion.
Data show that degree completion is critical to
ensuring that the time and money invested in
college pays off for students.
To promote completion, the Budget puts forward three important Pell Grant policies.

38

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

•	 Pell for Accelerated Completion. The Budget
proposes to allow students to earn a third
semester of Pell grants in an academic year
so they can take courses year-round and
make steady progress toward their degrees.
The “year-round” Pell option was previously
available to students, but cost more than
anticipated and was eliminated in 2011 to
preserve funding for the basic Pell award
and close a funding shortfall. The Budget
proposes to reinstate year-round Pell, but
with changes to ensure that the additional
aid is facilitating timely completion of a degree. In particular, the Budget proposes to
allow students to access a third semester of
Pell during a year if they have already completed a full-time course load of 24 credits to
ensure that the third semester of eligibility
is assisting students to accelerate progress
toward completion.
•	 Incentivizing Students to Take 15 or
More Credits. Since the beginning of the
Administration, the President has increased
the maximum Pell Grant by more than
$1,000. To further incentivize students to
enroll in enough credits to complete degree
programs on time, the Budget proposes to
increase the Pell Grant by an additional
$300 for students taking at least 15 credit
hours per semester in an academic year, the
number of credits typically required for ontime completion.
•	 Incentivizing Colleges to Do More to Promote
Completion. The Budget recognizes that
schools themselves can and should do more
to help disadvantaged students succeed in
college and graduate. The Budget provides a
College Opportunity and Graduation Bonus
to schools that ensure that a large share of
students receiving Pell Grants finish their
degrees and to schools that improve their
performance on this important metric of
success.
Seeding Innovation. The Budget provides
$100 million for the First in the World program
(FITW) to develop, test, and scale-up new and
promising strategies to help more students
complete high-quality, affordable degrees. This

proposal builds off of $60 million invested in
2015, and expands FITW to allow for greater
piloting at-scale to facilitate wider adoption
of evidenced-based practices that successfully
support student persistence and lead to college
completion. This investment is critical to ensure that students facing significant barriers
to degree completion, such as adult learners
and low-income students, can benefit from the
cutting-edge research on student success at colleges and universities across the Nation.
Further Simplifying the FAFSA. While
significant progress has been made in simplifying
the FAFSA, many of the most time-consuming
questions that remain cannot be completed with
IRS data because they require information that
is not reported on tax returns. To answer those
burdensome questions, affected students have
to collect information about assets and untaxed
forms of income from multiple sources—even
though these questions have little or no impact
on aid eligibility in the vast majority of cases.
The Budget proposes to eliminate up to 30 burdensome and unnecessarily complex questions,
shortening the FAFSA application substantially,
and making it easier for students and families to
access critical resources to pay for college.
Ensuring High-Quality Service for Students
and Borrowers. The Budget provides $1.6 billion for the Office of Federal Student Aid, which
is responsible for administering the more than
$140 billion in new financial aid made available
each year to students at over 6,000 colleges
and universities. This funding would be used
to implement the Administration’s ongoing efforts to ensure that student loan contractors
provide high-quality loan servicing to students.
These funds would also allow the Department
of Education to provide enhanced oversight
and strengthen enforcement activities, such as
pursuing schools that engage in deceptive or
misleading practices toward students, including
veterans. Funds would also be used to provide
students and families with clear information
about how students who attend different colleges
fare.

39

THE BUDGET FOR FISCAL YEAR 2017
Creating Business Partnerships to
Strengthen Community Colleges.
The
Budget also proposes a new tax credit to encourage businesses to invest in strengthening
community college programs.
While many
regions face a shortage of skilled workers, community colleges providing training for in-demand
fields often lack the needed regular investments
in up-to-date equipment and highly-skilled instructors to meet the needs of employers and
students. Under this proposal, businesses that
help community colleges fill in these investment
gaps would be eligible for up to $5,000 for each
graduate they hire. Investing in workers’ skills—

just as they invest in research, development, and
physical equipment—is one way that businesses
can promote long-term, shared growth.
Streamlining and Expanding Higher
Education Tax Incentives. The Budget would
streamline and expand education tax benefits
by: 1) consolidating the Lifetime Learning
Credit into an expanded AOTC; 2) exempting
Pell Grants from taxation and the AOTC calculation; and 3) eliminating tax on student loan
debt forgiveness, while repealing the complicated student loan interest deduction for new
borrowers.

TRAINING AMERICANS FOR THE JOBS OF THE FUTURE
The record-setting 70 months of job growth in
the United States reflects the strength of one of
our Nation’s greatest assets: a skilled, educated,
and adaptable workforce. In the new economy, technology is allowing businesses to locate
anywhere. In deciding where to locate jobs, employers seek the most educated, adaptable, and
nimble workforce. A nation’s ability to ensure a
steady and consistent pipeline of highly skilled
workers is one key ingredient to helping its economy grow and thrive. One of the surest paths to
ensuring that the economy works for everyone is
to expand access to job training and education
for in-demand skills.
The Budget builds on the plan that the
Administration released in July 2014 for a
job-training system that, as the President has
laid out, “trains our workers first based on
what employers are telling us they’re hiring
for and helps business design training programs so that we’re creating a pipeline into jobs
that are actually out there.” Since July 2014,
agencies have awarded more than $1 billion in
job training grants that incorporate seven essential elements that matter most for getting
Americans into better jobs—stronger employer
engagement, work-based learning approaches,
better use of labor market information, accountability for employment outcomes, more
seamless progression between education and

jobs, expansion of key support services, and regional partnerships. The Budget continues to
support job-driven training.
Supporting Implementation of the
Workforce Innovation and Opportunity
Act (WIOA). Over the last several years, the
Congress and the Administration have worked
together to improve the Nation’s job training
system, including through the enactment and
implementation of the bipartisan WIOA, which
encompasses programs that serve about 20 million people annually. The reforms supported by
WIOA—such as accountability for business engagement and new requirements to measure and
report program outcomes—are allowing us to do
more to make sure that training programs match
in-demand jobs. The Budget helps to realize the
goals of WIOA by funding the core Department of
Labor (DOL) WIOA formula grants at their full
authorized level—a $138 million, or five percent,
increase over the 2016 enacted level. The Budget
also gives DOL and States the funding they need
to oversee and implement the extensive changes
envisioned in the law. The Budget includes a
$40 million investment to build State and local
capacity to track the employment and educational outcomes of WIOA program participants,
and give those seeking training meaningful information—including past participants’ success
in finding jobs—so they can make good choices

40

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

about which program would best prepare them
for the labor market.
Building a System of Apprenticeships.
Apprenticeship is a proven strategy for preparing workers for careers. On average, apprentices
who finish their program earn $50,000 a year
and increase their lifetime earning potential
by $300,000. The Administration has successfully expanded this proven model. There are
now 75,000 more apprentices in training than
when the President first launched the American
Apprenticeship Initiative in 2014. The Budget
further invests in this proven strategy, sustaining the new $90 million in grants provided in
2016—a landmark investment—and adding a
$2 billion mandatory Apprenticeship Training
Fund. These investments would help meet the
President’s goal to double the number of apprentices across the United States, giving more
workers the opportunity to develop job-relevant
skills while they are earning a paycheck.
Creating an American Talent Compact.
A key to successful job training is ensuring that
employers and training providers—including
the Nation’s community and technical colleges—
work together so that students learn the skills
needed for jobs and careers that are available
in their communities. The Budget puts forward
a substantial investment in this high-quality
training by providing $3 billion in mandatory
competitive funding for regional partnerships
between workforce boards, economic development organizations, employers, K-12 career and
technical education programs, and community
colleges with the goal of training a half million
people and placing them into jobs in high demand sectors.
Reconnecting Workers to Jobs. The Administration makes significant investments to
reach those who have been left on the sidelines of
the economic recovery. The Budget provides $1.5
billion in mandatory funding to States to fund
Career Navigators in American Job Centers to
proactively reach out to all people who have been
unemployed for six months or more, those who

have dropped out of the labor force altogether, and
people who are only able to find part-time work.
These Career Navigators would help workers
look for a job, identify training options, and access additional supportive services. The Budget
also includes almost $190 million in discretionary funding to provide in-person reemployment
services to the one-third of Unemployment
Insurance (UI) beneficiaries most at risk of exhausting their benefits, as well as all returning
veterans who are receiving UI. Evidence suggests these services are a cost-effective strategy
that gets workers back into jobs faster with higher wages.
Empowering Workers, Training Providers,
and Employers through Better Data. Each
year, millions of Americans choose education and
training programs with very little high-quality
information and advice to go on. In a recent
survey, only 40 percent of people knew post-graduation job placement rates before entering
post-secondary education, and at most community colleges and secondary schools there is only
one academic adviser per 800 to 1,200 students.
One of the main tools we have to ensure that
workers are making the best investments of
time and money is empowering them with good
data and information to make smart choices.
In pursuit of that goal, the Budget proposes a
$500 million mandatory Workforce Data Science
and Innovation Fund that would invest in data
systems in States to enable them to create
easy-to-understand scorecards that provide key
data on training participants’ outcomes. In conjunction with the Departments of Commerce and
Education, DOL would also develop new data
standards, analytical data sets, and open source
data products on jobs and skills to spur continued market innovation and provide key labor
market actors with a more comprehensive view
of local labor market demand. Finally, the Fund
would establish a Center of Excellence with a
best-in-class team of private sector researchers,
statisticians, data scientists, and innovators to
help States and localities find new ways to use
technology and data analytics to improve training programs and consumer choice.

41

THE BUDGET FOR FISCAL YEAR 2017
Opening Doors for Youth. Today, approximately six million Americans between the
ages of 16 and 24 are out of school and work—a
tremendous untapped resource for the Nation.
Despite talent and motivation, these young
Americans lack access to the education and
training that can provide them with a pathway
to better jobs and careers with advancement
opportunities. The enactment of WIOA took a
step toward addressing this problem by requiring that a minimum of 75 percent of WIOA Youth
program funds be directed to out-of-school youth.
The Budget fulfills this promise by fully funding
the youth program at its authorized level, which
would result in approximately $560 million in
funding for out-of-school youth.
In addition, the Budget invests $5.5 billion
in mandatory funding to engage young people
in education and the workforce and set them
on a path to a better future. Of this, $3.5 billion is devoted to giving more American youth
the valuable experience of a paid learning opportunity; this includes $1.5 billion to support
summer job opportunities, and $2 billion to
create year-round first jobs for nearly 150,000
opportunity youth—those who are currently
out-of-school and out-of-work but ready to take
on a work opportunity. A critical component to
the success of these programs is a strong focus
on financial empowerment. To that end, all
grantees receiving funds to support summer job
opportunities or provide first jobs for opportunity youth must help participants establish bank
accounts and directly deposit wages into those
accounts. These accounts must be established
with reputable banks and be affordable to youth.
The accounts would be a tool to allow youth to
learn sound money management practices, and
would be used by youth employment programs to
implement high-quality financial literacy education for participating youth.
The Budget also provides $2 billion to transform communities struggling with high rates
of youth disengagement, high school dropouts,
and unemployment into places of opportunity
for young adults to help them succeed in school
and the labor force. The program would provide

funds to local governments to locate and reengage
youth, and connect them with the counseling,
support services, employment opportunities, and
education they need to succeed.
Improving Interstate Mobility and
Expanding Access to Jobs for Qualified
Workers. The Budget builds on the investment
provided in the 2016 Consolidated Appropriations
Act (2016 Omnibus) and provides a total of $10
million for grants to States and partnerships
of States to identify and address areas where
occupational licensing requirements create an
unnecessary barrier to labor market entry or mobility and where interstate portability of licenses
can improve economic opportunity, particularly
for dislocated workers, transitioning service
members, veterans, and military spouses.

Protecting Workers
While most employers play by the rules, in
too many cases workers need protection from
employers who cheat workers out of their hardearned wages or do not ensure a safe workplace.
The Budget includes $1.9 billion in discretionary
resources to ensure that DOL’s worker protection
agencies can meet their responsibilities to defend
the health, safety, wages, working conditions,
and retirement security of American workers.
The Administration continues to pursue a combination of administrative and legislative actions
to strengthen these laws and their enforcement,
so workers can earn family-sustaining wages,
be protected from discrimination, and return
home safely at the end of a day’s work. The
Administration continues to support workers by:
Ensuring Workers Get Fair Pay for a Fair
Day’s Work. The Budget provides $277 million
to enforce laws that establish the minimum
standards for wages and working conditions in
many of the workplaces in the United States,
particularly in industries where workers are
most at risk. The Budget also expands funding
for efforts to ensure that workers receive back
wages they are owed and cracks down on the
illegal misclassification of some employees as independent contractors, a practice that deprives

42

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

workers of basic protections like unemployment
insurance, workers’ compensation, and overtime
pay.
Keeping Workers Safe. The Budget provides almost $1 billion for the Occupational
and Mine Safety and Health Administrations
(OSHA and MSHA) to ensure workers are protected from health and safety hazards on the

job. In particular, the Budget provides resources to enhance safety and security at chemical
facilities and improve response procedures
when major incidents at these sites occur.
The Budget also includes funds for OSHA to
enforce the more than 20 whistleblower laws
that protect workers from discrimination
and retaliation when they report unsafe and
unscrupulous practices. The Budget also pro-

Leveling the Playing Field through Wall Street Reform
In response to the destabilizing 2008 financial crisis, the Administration achieved landmark reform of
the Nation’s financial system in 2010 with enactment of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Wall Street Reform). In the years since enactment, Federal agencies have helped make home,
auto, and short-term consumer loan terms fairer and easier to understand for consumers, improved the transparency of financial markets, and made the system more resilient to downturns. These actions are already
curbing excessive risk-taking, closing regulatory gaps, and making our financial system safer and more resilient. However, the financial services industry continues to rapidly evolve, expand and grow more complex.
The agencies charged with establishing and enforcing the rules of the road are hampered by budget limitations. For example, resource constraints have forced the Commodity Futures Trading Commission (CFTC) to
delay and even cut back on its examination of clearinghouses, critical points of systemic risk in our financial
system. Similarly, without adequate staffing the Securities and Exchange Commission (SEC) is not able to
examine investment advisors as frequently as it should, introducing significant risk to investors and the economy. To match these growing challenges and strengthen regulation of the financial system, the President is
calling for doubling the funding of these agencies from their 2015 levels by 2021.
The Budget’s 2017 down payment toward the five-year doubling target includes $1.8 billion for the SEC
and $330 million for the CFTC. The Budget also reflects continued support for legislation to enable funding
the CFTC through user fees like other Federal financial and banking regulators. Fee funding would shift the
costs of regulatory services provided by the CFTC from the general taxpayer to the primary beneficiaries of
the CFTC’s oversight, and fee rates would be designed in a way that supports market access, liquidity, and
the efficiency of the Nation’s futures, options on futures, and swaps markets. Increasing the transaction fees
that currently fund the SEC would particularly fall on high-frequency trading. In addition, the Budget takes
other steps designed to reduce risk in the financial sector, such as leveling a fee on the largest financial firms
on the basis of their liabilities. The Administration will also continue to oppose efforts to restrict the funding
independence of the other financial regulators, including the Consumer Financial Protection Bureau, and will
fight other attempts to roll back Wall Street Reform.
To finish addressing the weaknesses exposed by the financial crisis, the Government must reform the
housing finance system and move forward to wind down the Government-sponsored enterprises (GSEs),
Fannie Mae and Freddie Mac, which have been in conservatorship since September 2008. As part of the
2016 Omnibus, the Congress included a provision that limits the ability to return to the dysfunctional system
in effect prior to conservatorship, and reinforces the need to enact comprehensive reform. A bipartisan bill
developed in the Senate in the previous session includes many of the Administration’s key housing finance reform principles, including ensuring that private capital is at the center of the housing finance system, and that
the new system supports affordable housing through programs such as the Housing Trust and Capital Magnet
Funds. The President stands ready to work with Members of Congress in both parties to enact commonsense
housing finance legislation that embodies these core principles. (For additional discussion of the GSEs, see
the Credit and Insurance chapter in the Analytical Perspectives volume of the Budget.)

43

THE BUDGET FOR FISCAL YEAR 2017

vides MSHA the resources it needs to meet
its statutory obligation to inspect every mine

and address the risks posed to miners by the
Nation’s most dangerous mines.

MAKING THE 21ST CENTURY ECONOMY WORK FOR WORKERS
The economy and the Nation’s workforce have
changed significantly since the 1930s when
many core worker protections and benefits, like
unemployment insurance, were first established.
Today, women are almost twice as likely to be in
the workforce as they were eight decades ago and
the issues of the intersection of work and family are more widely recognized. New industries
and ways of organizing work continue to emerge.
As the nature of work continues to evolve, it is
important that we update key worker benefit
structures to ensure that workers in the 21st
Century economy can balance work and family
obligations, save for retirement, and are protected during temporary periods of unemployment
and upon return to work.

Helping Workers Balance
Work and Family
Expanding Access to Quality Child Care
for Working Families. The Budget reflects the
President’s commitment to quality, affordable
child care, which research shows can increase
parents’ employment and earnings and promote
healthy child development. The Budget invests
$82 billion in additional mandatory funding
over 10 years to ensure that all low- and moderate-income working families with children ages
three or younger have access to quality, affordable child care. This landmark proposal makes
significant investments in raising the quality of
child care, including investments to improve the
skills, competencies, and training of the child
care workforce, and a higher subsidy rate for
higher quality care. This increase in the subsidy rate, paired with investments in workforce
development, would improve the quality of care
that children receive in part by allowing for more
adequate compensation of child care workers.
The Budget also provides $200 million in discretionary funding above the 2016 enacted level.

This funding would help States implement the
policies required by the new bipartisan Child
Care and Development Block Grant Act of 2014,
designed to improve the safety and quality of
care while giving parents the information they
need to make good choices about their child
care providers. The new funding would help
States improve quality while preserving access
to care. The additional funding in the Budget
would also go toward new pilot grants to States
and local communities to help build a supply of
high-quality child care in rural areas and during
non-traditional hours. These grants focus on
what low-income working families need most—
high-quality, affordable care that is close to home
and available during the hours they work and on
short notice.
Cutting Taxes for Middle-Class Families
with Child Care Expenses. The current tax
benefits for child care are unnecessarily complex
and provide too little help for families facing
high child care costs. To ensure that all working
families have access to high-quality, affordable
child care, the Budget streamlines child care
tax benefits, extends the child care tax credit to
more middle-class families, and triples the maximum child care credit for families with young
children, increasing it to $3,000 per child. This
would benefit 5.3 million families, helping them
cover child care costs for 6.9 million children, including 3.6 million children under five. This tax
proposal complements the other substantial investments to improve child care quality, access,
and affordability.
Encouraging State Paid Leave Initiatives
and Creating Paid Leave for Federal
Workers. Too many American workers face the
difficult choice between caring for a new baby or
sick family member and a paycheck they desperately need. The Family and Medical Leave Act
allows many workers to take job-protected un-

44

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

paid time off to care for a new baby or sick family
member, or tend to their own health during a
serious illness. However, millions of families
cannot afford to use unpaid leave.
The United States is the only industrialized
nation in the world that fails to offer workers
paid maternity leave. Evidence shows that the
availability of paid maternity leave increases the likelihood that mothers return to their
jobs following the birth of a child, in addition to
producing better outcomes for infants, yet employers are not required to offer paid leave in
most States.
A handful of States and localities have enacted
policies to offer paid family leave, and the Federal
Government can encourage more States to follow
their lead. The Budget includes more than $2 billion for the Paid Leave Partnership Initiative to
assist up to five States to launch paid leave programs, following the example of California, New
Jersey, and Rhode Island. States that choose
to participate in the Paid Leave Partnership
Initiative would be eligible to receive funds for
the initial set up and three years of benefits. The
Budget also includes funding for grants to help
States and localities conduct analysis to inform
the development of paid family and medical
leave programs. These grants have helped recipients obtain the information they needed to
understand how a paid family leave policy could
work in their communities.
The Budget also proposes legislation that
would offer Federal employees six weeks of paid
administrative leave for the birth, adoption, or
foster placement of a child. In addition, the proposal would make explicit the ability for mothers
and fathers to use sick days to bond with a healthy
new child. This proposal is part of a broader
effort to expand the availability of paid family
leave for the Federal workforce, and establish a
Federal family leave policy that is on par with
leading private sector companies and other industrialized nations so that the Government can
recruit and retain the best possible workforce to
provide outstanding service to American taxpayers. These proposals complement the President’s

executive actions to expand paid leave for employees of Federal contractors.
Helping the Paychecks of Families Go
Further. The Budget helps families’ paychecks
go further by cutting taxes for middle-class
families when both spouses work. Two-earner
couples can face higher marginal tax rates when
both spouses work, even though the family incurs
additional costs from commuting, professional expenses, child care, and, increasingly, elder
care. The Budget proposes a new, simple second
earner credit of up to $500 that recognizes the
additional costs faced by families in which both
spouses work. A total of 23.4 million couples
would benefit from this proposal.
In addition, the Budget proposes a $100 million Financial Innovation for Working Families
Fund within the Department of the Treasury to
encourage the development of innovative private-sector financial products that would help
low- to moderate-income workers build up “rainy
day” reserves and provide a buffer against shocks
to income and spending needs. Funds would be
awarded to financial institutions and intermediaries that provide strong evaluation plans for
promising programs.

Helping All Workers Save
for Retirement
Our system of retirement benefits has not
kept pace with a rapidly evolving economy.
Approximately half of workers employed by
firms with fewer than 50 workers and fewer than
one-quarter of part-time workers have access to
workplace retirement plans. Workers without
access to a plan at work rarely save for retirement: fewer than 10 percent of workers without
access to a workplace plan contribute to a retirement savings account on their own.
Helping Workers without Access to
Workplace Retirement Plans. The Budget includes the following proposals that would make
saving easier for millions of Americans currently
without employer-based retirement plans:

THE BUDGET FOR FISCAL YEAR 2017
•	 Automatically Enroll Americans without
Access to a Workplace Retirement Plan in an
Individual Retirement Account (IRA). Under
the proposal, every employer with more
than 10 employees that does not currently
offer a retirement plan would be required
to automatically enroll their workers in
an IRA. Employers would not be required
to contribute to the plan, and individuals
would have the ability to opt out. There is
strong evidence that making enrollment the
default option results in greater participation. Under the proposal, approximately 30
million Americans would be automatically
enrolled in an IRA. Other individuals not
automatically enrolled could participate so
long as they fall below the income cutoff,
and could continue to make their own contributions even if they change jobs.
•	 Provide Tax Cuts for Auto-IRA Adoption,
and for Businesses that Choose to Offer
More Generous Employer Plans or Switch to
Auto-Enrollment. To minimize the burden
on small businesses, the Budget’s auto-IRA
proposal would provide any employer with
100 or fewer employees who offers an auto-IRA a tax credit of up to $4,500. The
Budget also proposes to triple the existing
“startup” credit and extend it to an additional year, so small employers who newly offer
a retirement plan would receive a tax credit
of up to $6,000, enough to offset administrative expenses. Furthermore, because
auto-enrollment is the most effective way to
ensure workers with access to a plan participate, small employers who already offer a
plan and add auto-enrollment would get an
additional tax credit of $1,500.
•	 Expand Retirement Savings Options for
Long-Term, Part-Time Workers. Part-time
workers are much less likely to have access
to a retirement plan compared to their fulltime colleagues, in part because employers
can exclude them from participation. The
Budget would provide approximately one
million individuals with access to retirement
plan coverage by requiring that employees
who have worked for an employer at least
500 hours per year for at least three consec-

45
utive years be eligible to participate in the
employer’s existing plan. Employers would
not be required to offer matching contributions and participation by employees would
be voluntary.
•	 Encourage State Retirement Savings
Initiatives. Many States have been exploring options for creating retirement accounts
for workers in the private sector who do
not otherwise have access to a workplace
retirement plan. Several States have created their own auto-IRAs or retirement
marketplaces connecting small businesses
and their employees to existing investment
vehicles, with approximately 20 more considering similar measures or an alternative
approach that would create a State-based
401(k). The Department of Labor has proposed regulations and guidance to provide
a path forward for State retirement savings
programs consistent with the Employee
Retirement Income Security Act. To further
State efforts, the Budget sets aside $6.5 million to allow a handful of States to pilot and
evaluate State-based 401(k)-type programs
or automatic enrollment IRAs.
•	 Increase Coverage by Supporting New, More
Flexible Benefit Models. To expand access
to retirement and other benefits, particularly for the self-employed and workers who
frequently change employers, the Budget
provides for the creation of open multiple
employer plans (open MEPs) that allow
multiple employers to offer benefits through
the same administrative structure, but with
lower costs and less fiduciary burden. The
Budget proposes to remove the current
requirement of a “common bond” between
employers while adding significant new
worker safeguards, thereby enabling more
small businesses to offer cost-effective,
pooled plans to their workers and potentially facilitating pooled plans of self-employed
individuals. As an added benefit, if an
employee moves between employers participating in the same open MEP, or is an
independent contractor participating in a
pooled plan using the open MEP structure,
then he can continue contributing to the

46

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL
same plan even if he switches jobs. The
Budget also funds pilots for States and nonprofits to design, implement, and evaluate
new approaches to expand retirement and
other employer-provided benefit coverage,
with a focus on developing models that are
portable across employers and can accommodate contributions from multiple employers
for an individual worker. Policies proposed
in this Budget, as well as past Budgets, to
expand access to IRAs should also increase
portability since workers can continue contributing to their IRA even if they change
jobs, though their employers cannot.

Finally, recognizing the challenges workers
face in this new economy, the President proposes
to allow long-term unemployed individuals to
withdraw up to $50,000 per year for two years
from any tax-preferred retirement account so
they can draw upon their savings, not go further
into debt, to make ends meet.
Protecting Workers’ Retirement Security.
The Pension Benefit Guaranty Corporation
(PBGC) acts as a backstop to insure pension
payments for workers whose companies or plans
have failed. PBGC’s single-employer program
covers plans that are sponsored by an individual company; the multiemployer program covers
plans maintained pursuant to one or more collective bargaining agreements involving more than
one unrelated employer. Both programs are underfunded, with combined liabilities exceeding
assets by $76 billion at the end of 2015. While
the single-employer program’s financial position
is projected to improve over the next 10 years, in
part because the Congress has raised premiums
in that program several times in recent years,
the multiemployer program is projected to run
out of funds in 2024. Particularly in the multiemployer program, premium rates remain much
lower than what a private financial institution
would charge for insuring the same risk and well
below what is needed to ensure PBGC’s solvency.
To address these concerns, the Budget proposes to give the PBGC Board the authority to
adjust premiums. The 2016 Budget proposed to
raise premiums by $19 billion, with premiums

to be split between the multiemployer and single-employer programs based on the size of their
deficits. Given the $4 billion in recent premium
increases enacted in the Bipartisan Budget Act of
2015, and the single-employer program’s improving financial projections, the Budget directs the
Board to raise $15 billion in additional premium
revenue within the Budget window only from the
multiemployer program. The Administration
believes additional increases in single-employer
premiums are unwise at this time and would
unnecessarily create further disincentives to
maintaining defined benefit pension plans. This
level of additional multiemployer premium
revenue would nearly eliminate the risk of the
multiemployer program becoming insolvent over
the next 20 years.
The Budget assumes that the Board would
raise these revenues by using its premium-setting authority to create a variable-rate premium
(VRP) and an exit premium in the multiemployer program. A multiemployer VRP would
require plans to pay additional premiums based
on their level of underfunding—as is done in the
single-employer program. An exit premium assessed on employers that withdraw from a plan
would compensate the PBGC for the additional
risk imposed on it when healthy employers exit.

Helping Workers Who Lose Their
Jobs and Reducing Job Loss
The Budget proposes a cost-neutral suite
of reforms to strengthen and modernize the
Unemployment Insurance (UI) program. UI
provides critical income support to unemployed
workers. But after cutbacks in coverage by
States and broader changes in the evolving
economy, fewer than one out of every three unemployed workers today receives UI benefits,
the lowest level in half a century. The Budget’s
reforms would address this by providing coverage for more workers—including more part-time
workers, low-wage and intermittent workers,
and workers who must leave a job for compelling family reasons. The Budget would also
help unemployed workers get back to work more
quickly; reform UI to help prevent layoffs; make

THE BUDGET FOR FISCAL YEAR 2017

the UI program more responsive to economic
downturns; and shore up the solvency of State UI
programs so they are prepared if unemployment
in their State rises. In addition, the Budget establishes wage insurance to help workers make
ends meet if a new job pays less than an old one
while encouraging workers to get off the sidelines
quickly and stay in the workforce. The goal is a
modernized, well-funded UI program that better
serves the diverse set of workers in today’s economy and better supports economic recoveries.
UI Solvency. Three out of five State UI
programs are insolvent, and only 20 States
have sufficient reserves to weather a single
year of recession. Low State reserves remain
a serious threat to UI for working Americans.
The President’s proposal would put State unemployment insurance programs on a path to
permanent solvency while ensuring they have
sufficient reserves to weather the next economic
crisis. The proposal would modernize Federal
unemployment insurance taxes and hold States
accountable for maintaining sufficient reserves
to provide benefits for at least six months of an
average economic recession.
Expanded Access to UI Benefits and
Services. The Budget makes changes to ensure
that UI benefits and reemployment opportunities
are available to more workers who need them.
The Budget requires UI coverage for part-time
workers and those who must leave a job due to
compelling family reasons like domestic violence
or family illness, and mandates the provision of at
least 26 weeks of benefits, so workers have time
to get back on their feet. Building on the success
of the Recovery Act, the Budget also includes
a $5 billion Modernization Fund to incentivize
States to make other improvements in their UI
programs’ coverage, benefits, and connection to
work. Through the Modernization Fund, States
would be encouraged to allow workers to retool
their skills to prepare for new job opportunities
while receiving UI benefits and to create apprenticeship and on-the-job training programs to
help the unemployed get back to work.

47
Wage Insurance. Wage insurance would
provide a safety net for workers who lose their
jobs and become reemployed at lower wages
at least initially, often in new industries. The
Budget proposes establishing wage insurance
for all workers with at least three years of job
tenure who are laid off and become reemployed
in a lower-paying job at less than $50,000 per
year. Wage insurance would pay half of the difference between the previous wage and the new
wage, up to a maximum of $10,000 over a period
of two years. The goal of the program is two-fold:
help workers who return to work at lower wages
on a temporary basis as they gain a foothold in
their new jobs and provide workers an incentive
to return to work, even if they must take a pay
cut relative to their former employment.
Work Sharing.
Work-sharing programs,
also known as Short Time Compensation (STC),
encourage employers to avoid layoffs by temporarily reducing hours when their need for labor
falls and providing employees with a partial UI
benefit to help compensate for their lower wages. Aided by incentives that were enacted in the
Middle Class Tax Relief and Job Creation Act of
2012, about half the States are now operating
STC programs. The Budget seeks to expand on
this progress by renewing expired incentives for
States to enact programs, providing for a 50-50
Federal cost share for STC benefits when State
unemployment is high, and encouraging employers to use STC by allowing States to reduce
employers’ UI taxes for the portion of benefits
that is paid by the Federal Government.
Extended Benefits During Recessions.
The Budget seeks to create a more inclusive and
responsive unemployment system by establishing a new Extended Benefits program to provide
additional benefits during economic downturns.
The new permanent Extended Benefits program
would provide up to 52 weeks of additional federally-funded benefits for States seeing increased
and high unemployment, with the number of
weeks tied to the State’s unemployment rate.
This new program would ensure that the UI system responds quickly, providing critical support
for unemployed workers in States where jobs are

48

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

scarce, and helping to reduce the severity of recessions by providing timely economic stimulus.

increase the minimum wage for the rest of the
workforce as soon as possible.

Addressing Wage Stagnation and
Helping Low-Wage Workers

Building on the Success of the Earned
Income Tax Credit (EITC) and Child Tax
Credit (CTC). The EITC and CTC are among
the Nation’s most effective tools for reducing
poverty and encouraging people to enter the
workforce. The 2016 Omnibus permanently
extended Recovery Act expansions of the EITC
and CTC for families with children that were
scheduled to expire after 2017. These provisions
provide a tax cut of about $900 on average for 16
million working families a year. If the expansions
had been allowed to expire, more than 16 million
people—including eight million children—would
have fallen into, or deeper into, poverty in 2018.
With the expansions in place, the EITC and CTC
lift more children out of poverty than any other
Federal program.

While economic growth is strong, too many
workers continue to see their wages stagnate,
making it hard for them to get ahead. The Budget
seeks to improve wage growth through a series of
investments in the Nation’s economy—from infrastructure to research and development—and
also includes targeted policies to address wage
stagnation directly.
Raising the Minimum Wage. In a Nation
as wealthy as the United States, no one who
works full time should have to raise his or her
family in poverty. The value of the minimum
wage, which has not increased in more than five
years, has failed to keep pace with the higher
costs of basic necessities for working families.
The Administration supports raising the minimum wage so hard-working Americans can
earn enough to support their families and make
ends meet. Raising the minimum wage is good
for workers, their families, and for the economy.
Many companies, from small businesses to large
corporations, recognize that raising wages is
good for their bottom lines because it boosts productivity, reduces turnover and increases profits.
The President has already taken an important
step by ensuring that those working on new and
replacement Federal contracts receive a higher
minimum wage. The Administration is encouraged that 17 States and the District of Columbia
have passed increases in their minimum wage
since the President called for a minimum wage
increase during his State of the Union address
in February 2013. Those increases will benefit
an estimated seven million workers as of 2017.
As the President continues to encourage States,
cities, and businesses to act, he stands ready to
work with the Congress to pass legislation to

Because the EITC available to workers without children and to non-custodial parents is so
small, they largely miss out on these antipoverty and employment effects of the EITC. The
Budget would double the EITC for so-called
“childless workers”—workers who are not raising dependent children, as well as noncustodial
parents—and make the credit available to workers with earnings up to about 150 percent of the
poverty line. It would also expand eligibility to
single workers between the ages of 21 and 24 and
ages 65 and 66, so that the EITC can encourage
employment and on-the-job experience for young
adults, as well as older workers, and harmonize
the EITC rules with ongoing increases in the
Social Security full retirement age. The proposal would reduce hardship and improve financial
security for 13.2 million low-income workers
struggling to make ends meet, while encouraging and supporting work.
The Budget also proposes providing funding
for an EITC for Puerto Rico as part of a package
to help the Commonwealth recover from an economic and fiscal crisis. (See text box below.)

THE BUDGET FOR FISCAL YEAR 2017

Addressing Puerto Rico’s Economic and Fiscal Crisis
The Commonwealth of Puerto Rico is in the midst of an economic and fiscal crisis which without action
from the Congress could devolve into a humanitarian crisis. The 3.5 million Americans living in Puerto Rico
have endured a decade of economic stagnation. Since 2006, Puerto Rico’s economy has shrunk by more
than 10 percent and shed more than 250,000 jobs. More than 45 percent of the Commonwealth’s residents
live in poverty—the highest poverty rate of any State or territory—and its 12.5 percent unemployment rate
is more than twice the national level. These challenges have sparked the largest wave of outmigration since
the 1950s, and the pace continues to accelerate. More than 300,000 people have left Puerto Rico in the past
decade; a record 84,000 people left in 2014.
Consistent with the Roadmap for Congressional Action on Puerto Rico that the Administration established in October 2015, the Budget proposes a series of measures to provide Puerto Rico with the tools it
needs to address its economic and fiscal crisis in a fair, orderly, and comprehensive manner while creating
the foundation for recovery.
The President remains committed to the principle of self-determination for the people of Puerto Rico,
and it is clear from the results of the 2012 referendum on the political status of Puerto Rico that the people of
Puerto Rico want to resolve the issue. We believe that the Congress and this Administration have key roles to
play to help Puerto Rico determine its future status through a fair, clearly defined, and transparent process—
and we believe the outcome of that process should be respected and acted upon in the Congress.
There are four key elements of the Roadmap for Congressional Action on Puerto Rico in the Budget:
1. Provide tools for Puerto Rico to comprehensively address its financial liabilities. The Budget proposes to provide Puerto Rico with the necessary tools to restructure its financial liabilities in a fair and orderly
manner under the supervision of a Federal court. Specifically, the Budget proposes a broad legal framework
that allows for a comprehensive restructuring of Puerto Rico’s financial liabilities. This framework should be
reserved exclusively for U.S. territories. As under current law, States would remain ineligible to file for bankruptcy under this or any other bankruptcy regime.
2. Enact strong fiscal oversight and help strengthen Puerto Rico’s fiscal governance. Puerto Rico must
reform its fiscal governance in a credible and transparent way while implementing the changes needed to
achieve financial stability. The Budget proposes to strengthen Puerto Rico’s ability to implement a sound plan
for achieving financial stability while also respecting Puerto Rico’s unique status and local autonomy.
3. Strengthen Medicaid in Puerto Rico and other U.S. territories. To avoid a loss in coverage when onetime funds from the Affordable Care Act run out, and to better align territory Medicaid programs with the mainland, the Budget would remove the cap on Medicaid funding in the territories, gradually increase the Federal
support territories receive through the Federal Medicaid match by transitioning them to the same level that
is received on the mainland, and expand eligibility to 100 percent of the Federal poverty level in territories
currently below this level. To be eligible for maximum Federal financial support, territories will have to meet
financial management and program integrity requirements and achieve milestones related to providing full
Medicaid benefits. (See details below in Building on the ACA to Improve Americans’ Health.)
4. Reward work and support growth. The decade-long recession has taken a toll on Puerto Rico’s
finances, its economy, and its people. To reward work and break this vicious cycle, the Budget proposes an
EITC for Puerto Rico. The EITC is already available to Americans living in the 50 States and the District of
Columbia, and providing the EITC in Puerto Rico would create incentives for work and increase participation
in the formal economy.

49

50

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL
TAX REFORM THAT PROMOTES GROWTH AND OPPORTUNITY

A simpler, fairer, and more efficient tax system
is critical to achieving many of the President’s
fiscal and economic goals. At a time when middle class and working parents remain anxious
about how they will meet their families’ needs,
the tax system does not do enough to reward
hard work, support working families, or create
opportunity. After decades of rising income and
wealth inequality, the tax system continues to favor unearned over earned income, and a porous
capital gains tax system lets the wealthy shelter
hundreds of billions of dollars from taxes each
year. In a period where an aging population will
put increasing pressure on the Federal budget,
a wide range of inefficient tax breaks prevent
the tax system from raising the level of revenue
the Nation needs. While commerce around the
world is increasingly interconnected, an out-ofdate, loophole-ridden business tax system puts
U.S. companies at a disadvantage relative to
their competitors, while also failing to encourage
investment in the United States.
The Budget addresses each of these challenges. As described above, it reforms and simplifies
tax incentives that help families afford child
care, pay for college, and save for retirement.
The Budget expands tax benefits, like the EITC
for workers without qualifying children, and creates new benefits, like a second earner tax credit,
that support and reward work. It also makes
important investments in the IRS that will improve taxpayer services, allow the IRS to fairly
enforce the tax code, and takes steps to counter
cybersecurity threats and protect taxpayers from
identity theft.

Closing Tax Loopholes for the
Wealthy, Imposing a Fee on Large
Financial Firms, and Making Sure
Everyone Pays Their Fair Share
The Budget pays for tax reforms that support
work, help middle-class families get ahead, and
reduce the deficit through numerous changes to
make the tax code fairer, simpler, and more efficient, including by closing loopholes that let the
wealthy pay less than their fair share and im-

posing a fee on large financial firms. Specifically,
the Budget would:
•	 Reform the Taxation of Capital Income.
The Budget would reform the taxation of
capital income in two important ways: first,
by increasing the top tax rate on capital
gains and dividends to 28 percent (inclusive
of the 3.8 percent Net Investment Income
Tax (NIIT), the rate at which capital gains
were taxed under President Reagan; and
second, by ending “stepped-up basis,” which
allows hundreds of billions of dollars in
capital gains to avoid income tax, while
preventing undue burdens on middle-class
families and small businesses through various exclusions.
•	 Impose a Financial Fee. The Budget
would also impose a new fee on large,
highly-leveraged financial institutions.
Specifically, the Budget would raise $111
billion over 10 years by imposing a seven
basis point fee on the liabilities of large U.S.
financial firms—the roughly 100 firms with
assets over $50 billion. By attaching a direct cost to leverage for large firms, this fee
will reduce the incentive for large financial
institutions to use excess leverage, complementing other Administration policies
aimed at preventing future financial crises
and making the economy more resilient.
•	 Limit the Value of Itemized Deductions
and Other Tax Preferences to 28
Percent. Currently, a millionaire who deducts a dollar of mortgage interest enjoys
a tax benefit that is more than twice as
generous as that received by a middle-class
family. The Budget would limit the value
of most tax deductions and exclusions to 28
cents on the dollar, a limitation that would
affect only couples with incomes over about
$250,000 (singles with incomes over about
$200,000).
•	 Close Tax Loopholes. The Budget would
also close a number of inefficient, unintended, and unfair tax loopholes in the individual
tax code. For example, it would end the “car-

THE BUDGET FOR FISCAL YEAR 2017
ried interest” loophole that allows certain
investment fund managers to take advantage of preferential capital gains tax rates
and prevent wealthy individuals from using
loopholes to accumulate huge amounts in
tax-favored retirement accounts.
•	 Ensure that High-Income Individuals
Pay into Medicare. As in 2016, the
Budget proposes to end the loophole that allows some high-paid professionals to avoid
paying Medicare and Social Security payroll
taxes. The Budget further closes gaps between the Self-Employment Contributions
Act (SECA) tax and the NIIT to ensure that
all high-income individuals fully contribute
to Medicare, either through the NIIT or
through payroll or SECA taxes. Revenue
from the NIIT would be dedicated to the
Medicare Hospital Insurance Trust Fund,
extending Medicare’s long-term solvency by
more than 15 years.
•	 Observe the “Buffett Rule.” As in past
years, the Budget proposes to institute
the Buffett Rule, requiring that wealthy
millionaires pay no less than 30 percent of
income—after charitable contributions—in
taxes. This proposal acts as a backstop to
prevent high-income households from using
tax preferences to reduce their total tax
bills to less than what many middle-class
families pay.

Fixing America’s Broken
Business Tax System
In February 2012, the President proposed
a framework for business tax reform that
would help create jobs and spur investment,
while eliminating loopholes that let companies
avoid paying their fair share. The President’s
framework would cut the corporate rate to 28
percent—with a 25 percent effective rate for
domestic manufacturing—putting the United
States in line with other major countries and

51
encouraging greater investment here at home.
The rate reduction would be paid for by eliminating dozens of inefficient tax expenditures and
through additional structural reforms. Together,
these reforms would help achieve more neutral
tax treatment of different industries, types of
investment, and means of financing, improving
capital allocation and contributing to economic
growth.
Consistent with that framework, the Budget
proposes a number of reforms that would make
the business tax code fairer and more efficient,
including a detailed international tax reform
plan. The Budget includes improved incentives
for research and clean energy investment and
simplifies and cuts taxes on small businesses—
allowing more than 99 percent of all businesses
to dispense with many of the tax system’s most
complex rules and instead pay tax based on simpler, “cash” accounting.
The Budget details the President’s full plan
for reforming and modernizing the international business tax system, including a 19 percent
minimum tax on foreign earnings that would
require U.S. companies to pay tax on all of their
foreign earnings when earned—with no loopholes or opportunities for deferral—after which
earnings could be reinvested in the United
States without additional tax. It would prevent U.S. companies from avoiding tax through
“inversions”—transactions in which U.S. companies buy smaller foreign companies and then
reorganize the combined firm to reduce U.S. tax
liability—and prevent foreign companies operating in the United States from using excessive
interest deductions to “strip” earnings out of the
United States. The Department of the Treasury
has taken steps within its authority to reduce
the economic benefits of inversions, but the
President has been clear that the only way to
fully address the issue of inversions is through
action by the Congress.

52

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL
PARTNERING WITH COMMUNITIES TO EXPAND OPPORTUNITY

Since the start of the Administration, the
President has called on the Federal Government to
disrupt an outdated, top-down approach to working
with communities, and to think creatively about
how to make the our efforts more user-friendly and
responsive to the ideas and concerns of local citizens.
Too often in the past, innovative efforts to expand
opportunity at the State and local level have been
stymied by less flexible Federal approaches and a
failure to recognize community assets alongside
their challenges. In communities facing limited
local revenues and capacity, the imperative for the
Federal Government to serve as a strong partner
only increases. 
The need for this community-level focus and
collaboration is clear. Groundbreaking new
research shows that the place in which a child
grows up has a significant impact on his or her
prospects for upward economic mobility.1 A
child’s zip code should never determine her destiny, but today, the neighborhood she grows up
in impacts her odds of graduating high school,
her health outcomes, and her lifetime economic
opportunities. This inequality of opportunity in
childhood is not just a moral failure, it is also
an economic failure for the Nation and its cities
and communities. Every year, the United States
incurs an estimated half-trillion dollar cost as a
result of allowing millions of America’s children
to grow up in poverty.2  
Over the course of the past six years, the
Administration has been steadily testing
new ways of working in partnership with the
communities that our programs serve—from
southeastern Kentucky to Fresno, California to
Detroit, and also in Indian Country. These collaborative efforts take a comprehensive approach to
community revitalization instead of addressing
1

	 Chetty, Raj and Hendren, Nathaniel, “The Impacts of Neighborhoods on Intergenerational Mobility.” Harvard University, April
2015, available at: http://www.equality-of-opportunity.org/images/nbhds_exec_summary.pdf

2

	 Holzer, Harry; Schanzenbach, Diane Whitmore; Duncan, Greg; & Ludwig, Jens, “The Economic Costs of Poverty: Subsequent Effects of Children Growing Up Poor.” Center for American Progress, January 2007,
available at: https://cdn.americanprogress.org/wp-content/uploads/issues/2007/01/pdf/poverty_report.pdf

problems in isolation; work with local leaders to
support their vision for their communities; and
embrace creative new solutions to old problems
to learn and apply what works and stop doing
what does not. 
The first step in this approach is ensuring that
the Federal Government is working in a coordinated way across agencies, and then improving how it
interacts with individual communities as a partner.
It also requires investments in the basic building
blocks for program success, such as data infrastructure to measure outcomes and assess need across
communities. By modernizing Federal programs
to meet urban, suburban, and rural communities
where they are, and updating Federal policies to
respond to the ways that people live, we can better
meet the demands of communities that are striving
for a better quality of life. 
Early initiatives such as Strong Cities, Strong
Communities, which strengthens towns, cities,
and regions by improving the capacity of local
governments to develop and execute their local
vision and strategies, and the Neighborhood
Revitalization Initiative, which has helped nearly 200 communities pursue local solutions to
revitalize and transform neighborhoods, have
informed many other initiatives and programs
as place-based approaches have spread. 
The Budget increases the Administration’s
support for such holistic community solutions through investments that include the
Administration’s Promise Zone initiative, which
establishes partnerships between the Federal
Government, local communities, and businesses
to create jobs, increase economic security, expand
educational opportunities, increase access to
quality, affordable housing, and improve public
safety. The competitively-chosen Promise Zones
are high-poverty urban, rural, and tribal communities that partner with local government,
and business and community leaders to make
investments that reward hard work and expand opportunity. In exchange, the Federal
Government partners with these communities
to help them secure the resources and flexibility

53

THE BUDGET FOR FISCAL YEAR 2017

they need to help them achieve their goals. To
date, the President has designated 13 Promise
Zones, and seven more will be announced in
2016. The Budget supports all 20 Promise Zones
through intensive, tailored Federal assistance at
the local level. The Budget continues to propose
Promise Zone tax incentives to stimulate growth
and investments in targeted communities, such
as tax credits for hiring workers and incentives
for capital investment within the Zones.
The Budget further supports efforts to
transform distressed communities by expanding the Department of Education’s Promise
Neighborhoods program and the Department
of Housing and Urban Development’s (HUD)
Choice Neighborhoods program. These programs
have already provided critical funding for comprehensive and community-driven approaches
to improving the educational and life outcomes
of residents in over 100 distressed communities.
The Budget provides $128 million for Promise

Neighborhoods and $200 million for Choice
Neighborhoods, an overall increase of $130
million over 2016 enacted levels for the two programs. This additional funding would support
implementation grants for approximately 15
new Promise Neighborhoods and six new Choice
Neighborhoods, and numerous other planning
grants for communities to engage with stakeholders to create plans for future revitalization. 
To support private-sector partnerships and investments that play a key role in strengthening
communities, the President also proposed to expand and make permanent the New Markets Tax
Credit, which promotes investments in low-income communities. Under legislation signed
into law by President Obama in December, $3.5
billion in New Markets Tax Credits will be available annually through 2019. The Budget would
make the program permanent with an annual
allocation of $5 billion.

HOUSING AND HOMELESSNESS
Improving Mobility with Housing
Choice Vouchers. In addition to the studies mentioned above related to the impact of
poverty on families and children new research
demonstrates moving to higher-opportunity
areas with a rental subsidy can generate large
benefits for children’s long-term earnings and
educational attainment, especially for young
children. These findings have significant policy implications. Though we must continue to
prioritize revitalizing distressed communities,
this research demonstrates the need to also
invest in and make improvements to HUD’s
Housing Choice Voucher (HCV) program,
which provides rental assistance to over 2.2
million extremely low- to very low-income
households to enable them to rent modest
units in the private market. The goal of the
HCV program is not only to make decent, safe
and sanitary housing affordable for low-income families, but also to improve the ability
of families to rent in safer neighborhoods with
more jobs and better schools.

The President proposes $20.9 billion for
the HCV program in 2017, an increase of $1.2
billion over the 2016 enacted level, to expand
opportunities for very low-income families. This
includes additional funding for Public Housing
Authorities’ (PHAs) to ensure they have sufficient resources to promote mobility and greater
access to opportunity, as well as cover fundamental functions, such as housing quality inspections
and tenant income certifications.
In addition, the Budget requests $15 million
for a new mobility counseling pilot designed to
help HUD-assisted families move to and stay in
higher-opportunity neighborhoods. These funds
will be distributed to about 10 regional housing
program sites with participating PHAs and/
or private non-profits over a three-year period
to provide outreach to landlords and counseling to voucher recipients on the benefits of
opportunity-rich, low-poverty neighborhoods, as
well as facilitate regional collaboration. A portion
of the funding would also support an evaluation

54

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

to measure the impact of the counseling pilot to
further inform the policy process and design.
Ending Homelessness. In 2010, the President
set the ambitious goal of ending homelessness
in America. Since then significant progress
has been made, especially in the area of veteran homelessness where the Administration, the
Congress, local leaders, and nonprofit partners
have committed to achieving the goal. Since
2010, the overall number of veterans experiencing homelessness on a single night has declined
by 36 percent. Moreover, the number of homeless veterans on the streets has been nearly cut
in half. Over 850 mayors, governors, and county
executives have committed to ending veteran
homelessness in their communities through the
Mayors Challenge to End Veteran Homelessness.
In the past year, communities across the Nation,
including Las Vegas, Houston, Philadelphia, and
the Commonwealth of Virginia, have successfully ended veteran homelessness—putting in
place systems that ensure veterans and their
families can get back into housing quickly and
permanently if they experience homelessness.
The Nation’s work to end veteran homelessness has proven that ending homelessness is

possible. The Budget sustains funding to support
programs dedicated to ending veteran homelessness, while also providing $11 billion in housing
vouchers and rapid rehousing—a strategy that
helps stabilize families’ housing and then assists
them to become more self-sufficient—over the
next 10 years to reach and maintain the goal
of ending homelessness among all of America’s
families by 2020. This significant investment
is based on recent rigorous research that found
that families who utilized vouchers—compared
to alternative forms of homeless assistance—had
fewer incidents of homelessness, child separations, intimate partner violence and school
moves, less food insecurity, and generally less
economic stress. Complementing this mandatory proposal, the Budget provides targeted
discretionary increases to address homelessness,
including 25,500 new units of permanent, supportive housing to end chronic homelessness,
10,000 new HCVs targeted to homeless families
with children, $25 million to test innovative projects that support homeless youth, and 8,000 new
units of rapid re-housing that provides tailored
assistance to help homeless families stabilize in
housing and then assists them to become more
self-sufficient. This investment further builds
the evidence base on this emerging intervention.

Veterans Homelessness Continues to Decline
80,000
70,000

Homeless
Veterans

74,770

Sheltered
Veterans

Unsheltered
Veterans

65,645

60,000

60,769
55,779

50,000

49,933

40,000
30,000

43,437

32,048

31,505

17,885

16,220

2014

2015

40,033
35,143

34,909

31,333
25,612

20,000

47,725

25,626
20,870

10,000
2010

2011

2012

2013

Source: Department of Housing and Urban Development. The 2015 Annual Homeless Assessment Report to
Congress, Part 1

55

THE BUDGET FOR FISCAL YEAR 2017
STRENGTHENING EFFORTS TO HELP POOR FAMILIES SUCCEED
Between 2012 and 2014 child poverty fell
farther than it had since 2000, indicating that
the economic recovery is starting to improve
prospects for poor families. Still, in 2014, 15.5
million children, or 21.1 percent of all children,
were poor and nearly 6.8 million children lived
in families with cash incomes that fell below half
of the poverty line, or just $785 per month for a
family of three. There is recent evidence showing
that the number of very poor families with children living on less than $2 in cash income per
person per day rose sharply after 1996: in 2011,
roughly 1.5 million households had cash income
3
of less than $2 per person per day.  While noncash benefits such as the Supplemental Nutrition
Assistance Program (SNAP), formerly known as
food stamps, helps cushion the hardships these
families face, their cash incomes are so low that
they are at substantial risk of homelessness and
hunger.
Improving the opportunity and economic security of poor children is both a moral and an
economic imperative.
Research shows that
poverty has significant negative impacts on
children’s future prospects. For example, a
large body of recent research finds that when
children’s families are more financially secure,
children are healthier and do better in school.
Importantly, this research shows that when poor
families receive additional income, children’s
outcomes improve. In the 21st Century economy,
the United States cannot afford for a large share
of its children to have their learning and health
hindered because of poverty.  
Twenty years ago, The Personal Responsibility
and Work Opportunity Reconciliation Act of 1996
created the Temporary Assistance for Needy
Families Program (TANF), which replaced the
Aid to Families with Dependent Children program. TANF gave States more flexibility in
how they operate their cash welfare program,
put in place work-related requirements that
many States have found overly prescriptive,
and capped and froze Federal funding. A strong
3

	 Edin, K.J., & Shaefer, H.L. (2015). $2.00 a Day. New York, NY:
Houghton Mifflin Harcourt.

economy, work-supporting policies such as an
expanded EITC and child care assistance, and
changes to cash welfare programs contributed to
an increase in employment rates among single
mothers in the 1990s. However, that progress
stalled and then reversed in the early part of the
2000s, ceding a significant portion of the earlier
gains. In addition, too few families have worked
their way into the middle class, while three million children are living on less than $2 a day in
cash income. The rise in children living in such
deep poverty is at least in part due to the declining role of TANF as a safety net. There is
now substantial evidence that further reforms
are needed to meet our 21st Century poverty
challenges.
Given the need to do more to combat poverty and provide opportunity for all children, the
Budget includes several proposals designed to
reduce poverty, assist families in deep poverty
or experiencing a financial crisis, and improve
efforts to help parents find and keep jobs. These
include:
Establishing Emergency Aid and Service
Connection Pilots.
For some financially
stressed families, a needed car repair or a week
of missed work due to the flu can bring the family
to the brink of financial collapse—including the
loss of a job or even homelessness. Some families
have already hit bottom, living in extreme poverty without help. The Budget provides $2 billion
for a robust round of pilots to test new approaches to providing emergency aid for these families,
including both short-term financial assistance
and connection to longer term supports for those
who need them. Building on the lessons learned
from the rapid rehousing approach, these pilots
will seek to both prevent families from financial
collapse when emergency help, such as fixing a
car or paying a security deposit is needed, and
connect families that need them to services
and supports—such as TANF, employment assistance, SNAP, child care, or Medicaid—that
can help them find jobs, stabilize their families,
and become more financially secure. The pilots
would be rigorously evaluated to inform future

56

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

policy and program decisions at the local, State,
and Federal levels.

ensure that States had the resources required to
meet the increased need.

Strengthening TANF. TANF was designed
to provide States with more flexibility while
requiring them to engage recipients in work
activities, but after 20 years there is strong
evidence that the program can do more to help
families get back on their feet and work toward
self-sufficiency. Currently, some States use only
a small share of their TANF funds to provide
assistance to very poor families or to help parents find jobs. One major issue that has arisen
is that a large share of poor families with children do not get any help at all from TANF, even
when the parents are out of work and the family
has no regular source of income. A particularly
troubling indicator is the decline in the TANFto-poverty ratio since TANF’s inception: in 1996,
for every 100 families in poverty, 68 received
TANF assistance; by 2014, that number had
dropped to just 23. Currently, just 32 percent of
families that meet State eligibility requirements
for TANF (such as income and asset rules) actually receive income assistance. Furthermore,
when families do not receive income assistance,
they also typically lose access to the employment
services that TANF programs provide.

In order to address these concerns, the
Budget: 1) increases resources for TANF and
ensures that States meet their State funding
requirements without using funding gimmicks;
2) requires States to spend a majority of their
funds (both Federal TANF funds and the funds
States contribute to TANF) on core purposes of
TANF, defined as welfare-to-work efforts, child
care, and basic assistance, and ensures all TANF
funds are spent on low-income families; 3) calls
for providing States with more flexibility to design effective work programs in exchange for
holding States accountable for the outcome that
really matters—helping parents find jobs; 4) proposes that HHS be required to publish an annual
measure or measures related to child poverty in
States; and 5) creates a workable countercyclical measure modeled after the effective TANF
Emergency Fund created during the Great
Recession and utilized by governors of both parties. The Budget also builds on a prior proposal
to redirect funds currently in the poorly designed
contingency fund. The proposal would shift
these funds to finance two important innovative
approaches to reducing poverty and promoting
self-sufficiency—subsidized jobs programs, and
two-generation initiatives that seek to improve
employment outcomes of parents and developmental and educational outcomes of children.

One contributing factor to this drop in help for
poor families is the fact that TANF funding has
remained frozen since it was created in 1996—
after adjusting for inflation, TANF funding to
States has fallen by about one-third over the last
20 years. Even with the resources available, too
few TANF dollars are spent on the core purposes of supporting destitute families and helping
them find jobs. In nearly half the States, the
share of Federal and State TANF funds spent on
basic income assistance to poor families, work
programs, and child care is less than 50 percent.
In addition, some Federal rules limit State flexibility in a way that hinders the effectiveness of
TANF employment programs. Finally, TANF is
not adequately responsive to recessions, which is
why during the Great Recession, the Congress
and the Administration had to create the temporary TANF Emergency Fund (now expired) to

Ensuring Adequate Food for Children
throughout the Year. With a consistent focus
on raising a healthier next generation of kids,
the Administration has made historic improvements in child nutrition programs, including
through the Healthy, Hunger Free Kids Act of
2010, which updated nutrition standards for
schools for the first time in 15 years. The Budget
seeks to ensure all children have consistent and
adequate access to nutritious food year round
to learn and grow. During the academic year,
school meals help meet this need for the nearly
22 million low-income children who rely on free
and reduced price school meals. However, only a
fraction of those children receive free and reduced
price meals in the summer months. As a result,

THE BUDGET FOR FISCAL YEAR 2017

low-income children are at higher risk of food insecurity and poorer nutrition during the months
when school is out of session. Rigorous evaluations of USDA pilots have found that providing
additional food benefits on debit cards to low-income families with school-aged children during
summer months can significantly reduce food insecurity. The Budget invests $12 billion over 10
years to create a permanent Summer Electronic
Benefits Transfer for Children program that
would provide all families with children eligible
for free and reduced price school meals access to
supplemental food benefits during the summer
months.
Expanding Opportunity for Native
American Youth. In December 2014, President
Obama announced Generation Indigenous, a
Native youth initiative focused on taking a comprehensive, culturally appropriate approach to
help improve the lives of and opportunities for
Native youth. The Budget builds on key investments the Congress made across several agencies
in 2016 to support Generation Indigenous, providing $40 million at HHS to support youth-focused
behavioral and mental health services, $23 million at the Department of Education (ED) for the
Native Youth Community Projects, and $1 billion
for Bureau of Indian Education (BIE) schools.
The additional resources provided in the
Budget for Native youth would ensure that
multiple agencies, including the Departments of
the Interior (DOI), ED, HUD, HHS, USDA, and
Justice (DOJ), are working collaboratively with
Tribes and can successfully implement education
reforms and address issues facing Native youth.
The Budget makes a number of investments
in these priorities, including:
•	 $1 billion to support DOI’s comprehensive
redesign and reform of the BIE, including
$138 million to improve facilities conditions
and $25 million to extend broadband internet and computer access at BIE-funded
schools and dormitories;
•	 $20 million for HUD-funded community facilities to support Native youth and teacher

57
housing and $8 million for DOI’s efforts to
address teacher housing needs;
•	 $55 million in HHS’s Substance Abuse and
Mental Health Services Administration
and Indian Health Service to support
the Administration’s priority of expanding access to mental health services to
Native youth. The funding would provide
youth-focused behavioral and mental health,
and substance abuse services, and reduce
the number of suicides among Native youth,
which is currently the second leading cause
of death among Native youth ages 8-24 and
occurs at 2.5 times the national rate;
•	 $26.6 million for HHS’s Administration for
Children and Families to support Native
youth resiliency and leadership development, implement special programs to
increase and improve Native American
language instruction across the educational continuum, and increase the ability of
Tribes to effectively serve Native youth involved in the child welfare system, as well
as $242 million in mandatory funding over
10 years to strengthen the capacity of tribal child welfare systems, including tribal
courts; and
•	 A $30 million increase to the Native Youth
Community Projects at ED to support community-driven, comprehensive strategies
to improve college- and career-readiness of
Native youth.
These investments build on current efforts
to better serve Native youth by coordinating
and demonstrating results across the Federal
Government.
Reducing Rural Child Poverty. According
to a 2015 report by USDA’s Economic Research
Service, roughly one in four rural children live in
poverty. Not only is rural child poverty pervasive, it is persistent: approximately 80 percent
of persistent child poverty counties—that is,
counties with 20 percent or more of their child
populations living in poverty over the last 30
years—are rural. To address these challenges,
the Budget invests in innovative strategies to

58

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

increase rural families’ access to promising and
evidence-based programs and services. The
Budget makes unprecedented investments in
two-generation approaches—aligning high-quality early childhood education for children with
high-quality workforce development for parents
to put the entire family on a path to educational
success and permanent economic security. The
Budget provides $20 million for two-generation
demonstration projects within USDA to fight
rural child poverty and $16 million to support
an integrated model for early childhood development and parental involvement for American
Indian families in BIE-funded schools. As discussed above, the Budget also introduces a new
rural home visiting program that complements
HHS’s evidence-based Maternal, Infant, and
Early Childhood Home Visiting program to serve
more high-risk, high-need children and families
in remote rural areas.
Promoting Permanency, Safety, and WellBeing for Children and Youth in Foster
Care. On any given day, there are more than
400,000 young people in the Nation’s foster care
system, with over 100,000 waiting to be adopted.
The Budget includes a package of investments
designed to do more to prevent the need for foster
care and assist children and families so that children can either be reunited with their biological
parents or placed in a permanent home where
they can thrive. The Budget includes funding to
provide critical preventative services to vulnerable families and children to address hardships
early, keeping more children out of foster care
and with their families, as well as funding to
promote family-based care for children with behavioral and mental health needs to reduce the
use of congregate care—which can have negative
effects on children. The Budget also provides
funding to help improve the training and skills
of the child welfare workforce, individuals working with some of the most vulnerable children
and youth in the Nation, including funding to
help caseworkers obtain a Bachelor or Master’s
degree in social work and incentivize State child
welfare agencies to hire and retain caseworkers

with this specialized education. The Budget
continues to include funding for Tribes to build
their child welfare infrastructure, and for tribal
children and youth removed from their homes to
remain in their communities.
Improving Health Outcomes for Children
and Youth in Foster Care. The Budget continues to propose a Medicaid demonstration project
in partnership with HHS’s Administration for
Children and Families to encourage States to
provide evidence-based psychosocial interventions to address the behavioral and mental
health needs of children in foster care and reduce
reliance on psychotropic medications to improve
overall health outcomes.
Helping Families Achieve Self-Sufficiency
through the Upward Mobility Project.
The Budget continues to support the Upward
Mobility Project, which would allow up to 10
communities, States, or a consortium of States
and communities more flexibility to use funding from up to four Federal programs for efforts
designed to implement and rigorously evaluate
promising approaches to helping families achieve
self-sufficiency, improving children’s education
and health outcomes, and revitalizing communities. Projects will have to rely on evidence-based
approaches or be designed to test new ideas, and
will have a significant evaluation component
that will determine whether they meet a set
of robust outcomes. The funding streams that
States and communities can use in these projects
are currently block grants—the Social Services
Block Grant, the Community Development
Block Grant, the Community Services Block
Grant, and the HOME Investment Partnerships
Program—that share a common goal of promoting opportunity and reducing poverty, but do not
facilitate cross-sector planning and implementation as effectively as they could. The Budget
also provides $1.5 billion in additional funding
over five years that States and communities can
apply for to help support their Upward Mobility
Projects. 

59

THE BUDGET FOR FISCAL YEAR 2017
BUILDING ON THE ACA TO IMPROVE AMERICANS’ HEALTH
For decades, too many Americans went without the security of health insurance. Since the
ACA’s coverage provisions have taken effect,
17.6 million Americans have gained health insurance coverage through the Health Insurance
Marketplace, Medicaid, and other sources. Now,
fewer than 1 in 10 Americans lack health insurance for the first time in history. The dramatic
decline in the uninsured rate shows the ACA is
working, making health care more affordable
and accessible for millions of people.
The ACA also provides Americans the economic security they deserve. Because of the ACA,
American families no longer need to worry about
losing coverage due to economic setbacks, such
as lay-offs or job changes, or due to pre-existing
conditions, such as asthma, cancer, or diabetes.
In addition, health insurance plans cannot bill
patients into debt because of an illness or injury, or limit annual or lifetime dollar benefits.
Americans have benefited from these changes.
For example, the number of people in households
that faced problems paying medical bills fell by
12 million from 2011 to 2015.
Further, the ACA has taken historic and significant steps toward putting the Nation back on
a sustainable fiscal course, while laying the foundation for a higher quality health care system. It
is improving the quality of care that Americans
receive and reducing cost growth by deploying
innovative new payment and delivery models
that incentivize more efficient, higher-quality
care.
With the ACA as a solid foundation, the Budget
makes additional health care investments and
reforms to further improve the Nation’s health
care system and the health of all Americans.
With approximately $375 billion in health savings that will grow over time, the Budget would
extend the exceptionally slow cost growth of recent years. It builds on the dependable health
insurance provided to Medicare, Medicaid, and
Children’s Health Insurance Program (CHIP)
beneficiaries, supports an aggressive agenda to
transform the Nation’s health care delivery sys-

tem into one that better incentivizes quality and
efficiency, reins in growing drug costs while improving quality and transparency, and includes
proposals that extend the life of the Medicare
Hospital Insurance Trust Fund by over 15 years.

Implementing the ACA and
Improving Health Care in America
The Budget fully funds the ongoing implementation of the ACA and makes a number of
improvements to the health care system.
Supporting Medicaid Expansion. The
ACA expanded affordable health insurance coverage to millions of low-income Americans by
offering significant Federal financial support to
States that expand Medicaid eligibility to non-elderly individuals with income below 133 percent
of the poverty line, roughly $26,700 for a family
of three. In the 30 States (and the District of
Columbia) that expanded Medicaid by the end of
2015, the share of people without health insurance has fallen significantly, along with the cost
of uncompensated care. The Budget provides
further incentive for States to expand Medicaid
by covering the full cost of expansion for the first
three years regardless of when a State expands,
ensuring equity between States that already
expanded and those that will expand in the future. Previously, the ACA covered the full costs
through calendar year 2016 before gradually reducing the level of support to 90 percent.
Protecting Consumers and Other Reforms.
The Budget makes targeted improvements to
the ACA’s private insurance programs, including proposals to help eliminate unexpected
health care charges and provide for uniform
health care billing documents, among other
reforms. It also proposes to standardize the
definition for American Indians and Alaska
Natives used in the ACA. The Budget bolsters
program integrity efforts with additional investments and a proposal to allow the Centers
for Medicare & Medicaid Services (CMS) access
to new data sources to improve the accuracy

60

MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

of eligibility determinations for Marketplace
financial assistance.
Improving the Excise Tax on High-Cost
Employer Coverage. The ACA included an excise tax on the highest-cost employer-sponsored
health insurance plans to give employers an incentive to make those plans more efficient. The
Budget proposes to modify the threshold above
which the tax applies to be equal to the greater of the current law threshold or the average
premium for a Marketplace gold plan in each
State. This reform would protect employers from
paying the tax only because they are in high-cost
areas and ensure that the tax remains targeted
at the highest-cost plans in the long term. The
Budget would also make it easier for employers
offering flexible spending arrangements to calculate the tax. Finally, the proposal would require
the Government Accountability Office to conduct
a study of the potential effects of the tax on firms
with unusually sick employees, in consultation
with the Department of the Treasury and other
experts.

Strengthening Medicare,
Medicaid and CHIP
Together, Medicare, Medicaid, and CHIP
provide affordable health coverage to support
longer, healthier lives and economic security for
the Nation’s seniors, people with disabilities,
and low-income working Americans and families. Today, Medicare provides about 55 million
Americans with dependable health insurance.
State Medicaid and CHIP programs provide
health and long-term care coverage to more than
70 million low-income Americans. The Budget
strengthens the Medicare and Medicaid programs through reforms that expand and extend
health coverage in Medicaid and CHIP, encourage high-quality and efficient care, and continue
the progress of reducing cost growth.
Expanding
Health
Coverage
by
Improving Access to Medicaid and CHIP
Coverage and Services. The Budget gives
States the option to streamline eligibility determinations for children in Medicaid and CHIP

and to maintain Medicaid coverage for adults by
providing one-year of continuous eligibility. The
Budget also extends full Medicaid coverage to
pregnant and post-partum Medicaid beneficiaries, expands access to preventive benefits and
tobacco cessation for adults in Medicaid, streamlines appeals processes, and ensures children in
inpatient psychiatric treatment facilities have
access to comprehensive benefits. The Budget
also fully covers the costs of the Urban Indian
Health Program (UIHP) clinics for Medicaid
services provided to eligible American Indians
and Alaska Natives, supporting the expansion of
UIHP service offerings and improving beneficiary care.
Preserving Coverage through CHIP.
CHIP currently serves more than eight million
children of working parents who are not eligible
for Medicaid. While the Medicare Access and
CHIP Reauthorization Act extended CHIP funding through 2017, the Budget proposes to extend
funding for CHIP through 2019, ensuring continued, comprehensive, affordable coverage for
these children. 
Strengthening Medicaid in Puerto Rico
and other U.S. Territories. The Medicaid programs in Puerto Rico and the other U.S. territories
of American Samoa, Guam, Northern Mariana
Islands, and the U.S. Virgin Islands are fundamentally different from the Medicaid program in
the States, leading to a lower standard of care
than may be otherwise experienced on the mainland. Medicaid funding in Puerto Rico and the
other territories is capped; beneficiaries are offered fewer benefits; and the Federal Government
contributes less on a per-capita basis than it does
to the rest of the Nation. The ACA increased the
Federal match rate and provided $7.3 billion
above the territory funding caps between July
1, 2011 and the end of 2019. To avoid a loss in
coverage when the supplemental funds provided
in the ACA run out and to better align Puerto
Rico and other territory Medicaid programs with
the mainland, the Budget would remove the cap
on Medicaid funding in Puerto Rico and the other territories. It also would gradually increase
the Federal support territories receive through

THE BUDGET FOR FISCAL YEAR 2017

the Federal Medicaid match by transitioning
them to the same level of Federal support as is
received on the mainland, and expand eligibility
to 100 percent of the Federal poverty level in territories currently below this level. To be eligible
for maximum Federal financial support, territories would have to meet financial management
and program integrity requirements and achieve
milestones related to providing full Medicaid
benefits.
Promoting Access to Long-Term Care
Services and Supports (LTSS). The
Administration has made it a priority to help
more older Americans and people with disabilities with Medicaid coverage have the choice
to receive home and community-based services
(HCBS) rather than institutional care. The
Administration has focused on implementing
key initiatives in this area, including supporting
State efforts to transition disabled and elderly individuals from institutions to community-based
care. The Budget builds on these efforts by expanding and simplifying eligibility to encourage
more States to provide HCBS in their Medicaid
programs. The Budget also includes a comprehensive long-term care pilot for up to five States
to test, with enhanced Federal funding, a more
streamlined approach to delivering LTSS to support greater access and improve quality of care.
In addition, the Budget includes an increase of
$10 million for HCBS provided through HHS’s
Administration for Community Living, which
provides supportive services such as in-home
personal care, respite care, and transportation
assistance.
Improving Care Delivery for LowIncome Medicare-Medicaid Beneficiaries.
The Budget proposes to streamline enrollment
for the Medicare Savings Programs, which assist
low-income beneficiaries with their Medicare
premiums and cost-sharing, by setting a national
standard for income and asset definitions. The
Budget also proposes to implement simpler, faster
processes for Federal-State review of marketing
materials and beneficiary appeals for managed
care plans that serve Medicare-Medicaid enrollees.
In addition, the Budget proposes to permanently

61
authorize a demonstration that provides retroactive drug coverage for certain low-income Medicare
beneficiaries through a single plan, establishing a
single point of contact for beneficiaries seeking reimbursement for claims.
Strengthening the Medicare Advantage
Program. The Budget proposes a package
of reforms that encourage greater quality
and efficiency in Medicare Advantage. First,
the Budget proposes to reform payments to
Medicare Advantage plans by using competition to set payment rates. Under the Budget’s
proposed competitive bidding system, Medicare
Advantage payment rates would be based on
plans’ bids, ensuring that plan payments reflect
plans’ costs for covering Medicare beneficiaries.
The proposal also preserves most beneficiaries’
access to a Medicare Advantage plan that provides supplemental benefits, without paying an
additional premium. In addition, the Budget includes higher payments to high-quality Medicare
Advantage plans to encourage quality improvement and attainment. These reforms would save
about $77 billion combined.
Encouraging High-Quality, Efficient Care
among Medicare Providers. The Budget
includes new proposals to expand competitive
bidding to additional durable medical equipment
and to encourage efficiency among hospice providers through changes to payments. The Budget
continues a robust set of proposals that build on
ACA initiatives to help extend Medicare’s solvency while encouraging provider efficiencies and
improved patient care among hospitals and postacute care providers. Together, these proposals
would save almost $180 billion over 10 years.
Reducing Cost Growth by Encouraging
Beneficiaries to Seek High-Value Services.
The Budget includes structural changes to
encourage Medicare beneficiaries to seek
high-value health care services and improve the
financial stability of the Medicare program. It
also includes new proposals to improve coverage
of colonoscopies and incentivize primary care delivery. The Budget continues to propose several
modifications for new beneficiaries starting in

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MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

2020, such as a modified Part B deductible and
a modest copayment for certain home health
episodes. Together, these proposals would save
approximately $54 billion over 10 years.
Making Targeted Reforms to Increase
Quality and Maximize Cost-Effectiveness in
Medicaid and CHIP. The Budget proposes to
limit the portion of Medicaid and CHIP managed
care dollars spent on administration and incentivize more investments in quality health care
services by establishing a Medical Loss Ratio
(MLR) ratio of 85 percent. This would modernize
Medicaid and CHIP managed care by aligning
program requirements with those in Medicare
Advantage and private insurance. Furthermore,
it will strengthen State and Federal financial
management of managed care contracts with
a requirement to return payments in excess of
the minimum MLR. The Budget extends funding for the Medicaid adult quality program, and
continues to propose better aligning Medicaid
Disproportionate Share Hospital Payments,
which compensate hospitals that treat high
numbers of uninsured patients, with expected
levels of uncompensated care.
Cutting Waste, Fraud, and Abuse in
Medicare and Medicaid. The Administration
has made targeting waste, fraud, and abuse in
Medicare, Medicaid, and CHIP a priority and is
aggressively implementing new tools for fraud
prevention provided by the ACA. In 2014, the
Government’s health care fraud prevention and
enforcement efforts recovered $3.3 billion in taxpayer dollars from individuals and companies
attempting to defraud Federal health programs,
including programs serving seniors, persons
with disabilities, and low-income individuals. In
addition, further development of the CMS Fraud
Prevention System, a predictive analytic model
similar to those used by private-sector experts,
continues to support CMS’ efforts to identify
and prevent wasteful, abusive, and potentially
fraudulent billing activities. Building on this
progress, the Budget proposes a series of policies
that would save nearly $3.4 billion over the next
10 years by:

•	 Requiring prior authorization for power mobility devices and advanced imaging, which
could be expanded to other items and services at high risk of fraud and abuse;
•	 Supporting efforts to investigate and prosecute allegations of abuse or neglect of
Medicaid beneficiaries in non-institutional
health care settings;
•	 Strengthening the Federal Government’s
ability to identify and act on fraud, waste,
and abuse through investments in the
Medicaid Integrity Program;
•	 Providing the Secretary of HHS with greater
authority to reject claims for certain items
and services in areas of the United States
where there is evidence of fraud and abuse;
•	 Ensuring Federal and State governments
can confidentially share data algorithms
developed to detect waste, fraud, and abuse;
•	 Improving the Recovery Audit Contractor
(RAC) program by authorizing CMS to pay
RACs after the second-level of appeals, and
by requiring RACs to maintain a surety
bond or other form of protection to cover
overturned recovery auditor decisions; and
•	 Requiring States to suspend Medicaid payments when there is a significant risk of
fraud.
In order to decrease waste, fraud, and abuse
and strengthen program integrity in the
Medicare prescription drug program, the Budget
also provides the Secretary the authority to
suspend coverage and payment for questionable
Part D prescriptions and establishes a program
to reduce prescription drug abuse in Medicare.

Transforming the Nation’s
Health Care Delivery System
The Administration continues to support
an aggressive reform agenda to transform the
Nation’s health care delivery system into one
that better incentivizes quality and efficiency.
These reforms are designed to not only improve
Americans’ health, but also to help further slow

THE BUDGET FOR FISCAL YEAR 2017

growth in health care costs and increase quality
in Medicare and Medicaid.
Supporting Alternative Payment and
Delivery Models.
In January 2015, the
Administration announced the goals of tying 30
percent of Medicare payments to quality and value through alternative payment models by 2016
and 50 percent by 2018. The Administration is
on track to exceed the 2016 milestone by the end
of 2016. This was the first time in Medicare’s
history that the Administration set explicit goals
for alternative payment models and value-based
payments.
In addition, the Administration is supporting
more than 20 demonstration projects through
the Center for Medicare & Medicaid Innovation
(Innovation Center) to test new innovative
payment and service delivery models targeted
at reducing program expenditures while preserving or enhancing the quality of care. One
demonstration, the Pioneer Accountable Care
Organizations, generated over $300 million in
savings to Medicare over its first three years
while delivering high-quality patient care.
Beginning in April 2016, approximately 800
hospitals will be engaged in a mandatory demonstration to drive quality improvement and cost
reduction in hip and knee replacements.
The Budget builds on the ACA as well as the
Administration’s current demonstration projects
and other actions to further delivery system reform. It proposes bundled Medicare payments
for post-acute providers, such as nursing homes
and home health agencies. The Budget also
includes proposals that enhance the ability of
Accountable Care Organizations to increase
quality and reduce costs, and includes a proposal
to incentivize hospitals to engage with qualifying
alternative payment models. The Budget also
reduces incentives for physicians to inappropriately order services from which they would
financially benefit, establishes quality bonuses
for the highest rated Part D plans, and modifies
incentives in the Medicare prescription drug program to encourage patient engagement in health
care decisions.

63
In addition, the Administration also is working to implement the Medicare Access and CHIP
Reauthorization Act to accelerate physician participation in high-quality and efficient health
care delivery systems, align incentives, and improve care coordination.
To facilitate system-wide change, the
Administration launched the Health Care
Payment Learning and Action Network to bring
together private payers, providers, employers,
State partners, consumer groups, individual
consumers, and many others to accelerate the
transition to alternative payment models.
Improving Health IT and Transparency.
Health information exchange is essential for a
transformed delivery system. To support improvement in this area, the Administration
is promoting health IT interoperability and
increasing access to health care information,
including cost and quality information, so that
clinicians, patients and their family members,
and businesses can make informed health care
choices.
To improve transparency and distribution of
information, the Administration continues to improve access to Federal data through the Open
Data Initiative, release Medicare data on cost
and quality, and invest in innovative ways to
collect and share data, from the way we measure
the quality of care to the way health care is documented and communicated to consumers. For
example, in December 2015, the Administration
released an interactive tool that can be used to
examine spending and price trends for medications that are fiscally significant to Medicare.
The Budget increases support to advance interoperable health IT while protecting patient
privacy. The Budget includes new incentive payments for certain behavioral health providers to
adopt and meaningfully use certified electronic
health records, which would further enhance the
integration of physical and behavioral health
care. In addition, the Budget supports the
Office of the National Coordinator for Health
Information Technology in developing and

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MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

advancing policies that help consumers and providers access electronic health information when
and where they need it to make health care decisions, including development of interoperable
tools and implementation of efforts to deter and
remedy information blocking.

Investing in Public Health and Safety
and the Health Care Workforce
Combating Prescription Drug Abuse
and Heroin Use. More Americans now die
every year from drug overdoses than in vehicle
crashes, and the majority of these overdoses
involve opioids—a class of drugs that includes
prescription painkillers and heroin. Prescription
opioid-related overdoses alone cost tens of billions in medical and work-related costs each
year. The Administration has promoted and
expanded community-based efforts to prevent
drug use, improve opioid prescribing practices,
and increase access to opioid use disorder treatment services. However, too many Americans
are abusing opioids and too few are getting
treatment. Individuals who want to but do not
undergo treatment often report cost and lack of
access as reasons why they do not get treatment.
The Budget takes a two-pronged approach
to address this epidemic. First, it includes
approximately $500 million to continue and
expand current efforts across HHS and DOJ to
expand State-level prescription drug overdose
prevention strategies, increase the availability
of medication-assisted treatment programs, and
improve access to the overdose-reversal drug
naloxone. A portion of this funding is targeted
specifically to rural areas, where rates of overdose and opioid use are particularly high. 
Second, the Budget includes $1 billion in new
mandatory funding over the next two years to
boost efforts to help individuals seek treatment,
successfully complete treatment, and sustain
recovery. States would receive funds based on
the severity of the epidemic and on the strength
of their strategy to respond to it. States can
use these funds to expand treatment capacity and make services more affordable to those

who cannot afford it. This funding would also
help expand the addiction treatment workforce
through the National Health Service Corps and
support the evaluation of treatment services.
This investment, combined with other efforts
underway to reduce barriers to treatment for
substance use disorders, would help ensure that
every American who wants treatment can access
it and get the help they need.  
Expanding Access to Mental Health Care.
Too often mental health is thought of differently
than other forms of health, yet mental health is
essential to overall health and wellness. Recovery
from and management of mental health conditions is possible and those who receive treatment
can go on to lead happy, healthy, productive lives.
One in five American adults experience a mental health issue at some point in their life, yet
millions do not receive the care they need. The
Budget includes $500 million in new mandatory
funding over two years to help engage individuals with serious mental illness in care, improve
access to care by increasing service capacity and
the behavioral health workforce, and ensure
that behavioral health care systems work for
everyone. In addition to these funds, the Budget
expands the President’s Now is the Time initiative to improve access to mental health services
for young people; support communities in developing comprehensive systems to intervene when
an individual is experiencing a mental health
crisis; and funding new strategies to address the
increasing number of suicides by older adults.
Investing in Native American Health
Care. The Budget provides the Indian Health
Service (IHS) with $5.2 billion, a total increase
of more than $400 million over the 2016 enacted
level, to expand health care services and to make
progress toward the construction of health care
clinics in Indian Country. The Budget proposes
to fund contract support costs fully, through discretionary funds in 2017 and through mandatory
funds beginning in 2018.
Strengthening HIV and Hepatitis C
Services. The Budget expands access to HIV
prevention and treatment activities for millions

65

THE BUDGET FOR FISCAL YEAR 2017

of Americans through the continued implementation of the updated National HIV/AIDS
Strategy, with a focus on three key elements of
the Strategy. First, the updated Strategy calls
for providing more people with highly effective
prevention services such as pre-exposure prophylaxis (PrEP) to reduce new HIV infections.
PrEP has been shown to reduce the risk of HIV
infection by up to 92 percent in people who are at
high risk. The Budget also includes $20 million
for a new innovative pilot program to increase
access to PrEP and allow grantees to use a portion of funds to purchase treatment and other
health care services as the payer of last resort.
Second, the Strategy calls for improved screening
for Hepatitis C, which disproportionally affects
Americans living with HIV. The Budget includes
funding for a new initiative to increase screening and expands access to Hepatitis C care and
treatment among people living with HIV. Third,
the Strategy calls for prioritizing HIV/AIDS resources within high-burden communities and
among high-risk groups, including gay and
bisexual men, Blacks/African Americans, and
Latino Americans, which is reflected throughout
the Budget.
Combating Antibiotic Resistant Bacteria
(CARB). The Budget includes $1.1 billion across
the Federal Government to prevent, detect, and
control illness and death related to infections
caused by antibiotic-resistant bacteria and to
support research on innovative ways to reduce or
manage resistance. These resources would also
help support the advancement of rapid diagnostics and new types of therapies for the treatment
of bacterial infections, including managing the
patient’s microbiome and targeting bacterial virulence factors, as outlined in the CARB National
Strategy and National Action Plan. The Budget
also continues to support implementation of surveillance, prevention, and stewardship activities
as outlined in the Strategy and the Action Plan.
Improving Access to Primary Care
Health Care Providers. The Budget includes
increased investments to strengthen the primary
care workforce. The Budget expands the number of National Health Service Corps clinicians

who practice primary care in areas of the Nation
that need it most, to 15,000 providers between
2018 and 2020. In addition, the Budget supports
primary care residency training in medically
underserved areas. To continue encouraging
provider participation in Medicaid, the Budget
reestablishes increased payments for primary
care services delivered by certain physicians
through calendar year 2017, with modifications
to expand provider eligibility and better target
primary care services.

Addressing the High Cost of Drugs
The Administration is deeply concerned about
rapidly growing prescription drug prices, driven
in part by the shift to specialty therapeutics, the
slowdown in patent expirations, and challenges
in measuring drug value. To address this issue,
the Budget includes a package of proposals focused on Medicare, Medicaid, and drug price
transparency.
Improving Quality and Lowering Drug
Costs for the Medicare Program.
The
Budget includes proposals to lower drug costs
while improving transparency and evidence development in the Medicare Part D program. The
Budget proposes to increase data collection to
demonstrate the effectiveness of medications in
the Part D program in the Medicare population
and to inform real world clinical treatment. The
Budget continues to provide the Secretary of
HHS the authority to negotiate drug prices for
biologics and high-cost drugs in Medicare Part D
and includes a new proposal to incentivize Part
D plan sponsors to better manage care provided
to beneficiaries with high prescription drug costs.
To help ensure access and affordability of
treatments, the Budget proposes to accelerate
discounts for brand name drugs for seniors who
fall into Medicare’s coverage gap by increasing
manufacturer rebates from 50 percent to 75 percent in 2018. In addition, the Budget proposes to
require drug manufacturers to provide rebates
generally consistent with Medicaid rebate levels
for drugs provided to low-income Part D beneficiaries. Together, these proposals would save

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MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

Medicare approximately $140 billion over 10
years.
Lowering Medicaid Drug Costs for States
and the Federal Government. The Budget
includes targeted policies to lower drug costs in
Medicaid. It provides States with a new, voluntary tool to negotiate lower drug prices through
the creation of a Federal-State Medicaid negotiating pool for high-cost drugs. In addition,
the Budget continues to support and build on
previously proposed reforms to the Medicaid
drug rebate program. These reforms enhance
manufacturer compliance with rebate requirements, and improve access to medications. In
addition, the Budget corrects and improves the
ACA Medicaid rebate formula for new drug
formulations, such as by exempting abuse deterrent formulations. These proposals are projected
to save the Federal Government approximately
$11.4 billion over 10 years.

Increasing Transparency of Prescription
Drug Pricing and Ensuring Access to
Generic Medications. The Budget proposes to
provide the Secretary of HHS with the authority
to require drug manufacturers to publicly disclose certain information, including research and
development costs, discounts, and other data as
determined through regulation. It also includes
three previously proposed reforms designed to
increase access to generic drugs and biologics by
stopping companies from entering into anti-competitive deals intended to block consumer access
to safe and effective generics, by awarding brand
biologic manufacturers seven years of exclusivity,
rather than 12 years under current law, and by
prohibiting additional periods of exclusivity for
brand biologics due to minor changes in product
formulations. These proposals would save the
Federal Government $21 billion over 10 years.

ENSURING SAFETY, FAIRNESS, AND COMMUNITY
TRUST IN THE CRIMINAL JUSTICE SYSTEM
The President is committed to ensuring the
criminal justice system is fair and effective for all
Americans. Since the President took office, the
rate of violent crime has fallen to levels not seen
in decades. In 2014—for the first time in over
30 years—the Federal prisoner population decreased, following updates to Federal sentencing
guidelines and implementation of DOJ’s Smart
on Crime initiative. The Budget proposes to
accelerate criminal justice reform in the States,
improve post-incarceration outcomes, remove
barriers to reentry, support the enhancement of
community policing practices across the Nation,
support DOJ’s efforts to focus its resources on
the most serious threats to public safety, and
to strengthen trust between the brave men and
women of law enforcement and the communities
they serve.

unnecessary incarceration, and builds trust between the justice system and communities. The
Budget provides $500 million per year over 10
years—a $5 billion investment—for a new 21st
Century Justice Initiative. The program will
focus on achieving three objectives: reducing
violent crime; reversing practices that have led
to unnecessarily long sentences and unnecessary incarceration; and building community
trust. Specifically, States would focus on one
or more opportunities for reform in both the
adult and juvenile systems, including: examining and changing State laws and policies that
contribute to unnecessarily long sentences and
unnecessary incarceration, without sacrificing
public safety; promoting critical advancements
in community-oriented policing; and providing
comprehensive front-end and reentry services.

Incentivizing Justice Reform.
The
Administration continues to support criminal
justice reform that simultaneously enhances
public safety, avoids excessive punishment and

Reducing Gun Violence. The Administration
maintains its commitment to reduce gun violence by providing funding to hire 200 new
special agents and investigators for the Bureau

THE BUDGET FOR FISCAL YEAR 2017

of Alcohol, Tobacco, Firearms, and Explosives,
enhance the National Integrated Ballistics
Information Network, and improve the National
Instant Background Check System (NICS).
The NICS reforms by the Federal Bureau of
Investigation (FBI) and the U.S. Digital Service
include processing criminal background checks
24 hours a day, seven days a week and improving notification of local authorities when certain
prohibited persons unlawfully attempt to buy a
gun. The FBI will hire more than 230 additional
examiners and other staff to help process these
background checks. In addition, within the resources provided, the Departments of Defense,
Justice, and Homeland Security (DHS) will
conduct or sponsor research into gun safety
technology to reduce the frequency of harm from
accidental discharge or unauthorized use.
Community Policing Initiative.
The
President’s Community Policing Initiative aims
to build and sustain trust between law enforcement and communities. The Budget provides
$97 million to expand training and oversight for
local law enforcement, increase the use of bodyworn cameras, provide additional opportunities
for police department reform, and facilitate community and law enforcement engagement in 10
pilot sites, with additional technical assistance
and training for dozens of communities and police departments across the Nation.
Improving Post-Incarceration Outcomes.
The Administration continues working to address
the problem of unnecessary and harmful collateral consequences of criminal convictions, which
too often undermine the ability of the formerly
incarcerated to reenter society and earn their

67
second chance. For example, the Administration
has emphasized the importance of investing in
reentry programs and “banning the box” in employment applications, including taking steps to
delay inquiry into criminal history for hiring in
the Federal Government.
Reviewing and Reforming the Use of
Restrictive Housing. The Administration has
also sought to promote policies that provide inmates with programs and services that reduce
recidivism and improve outcomes, including an
ongoing DOJ review to study and reform the
use of restrictive housing, often called solitary
confinement, in prisons. The Budget invests $24
million to begin implementing the Department’s
proposals, which includes expanding mental
health programming in Federal facilities. DOJ
will also assist States and localities with implementing the recommendations.
Funding the New FBI Headquarters
Facility. The Administration seeks $1.4 billion
to support the full consolidation of the FBI headquarters operations in a new, modern, and secure
facility that brings together all of the existing
disparate headquarters locations and functions.
This funding would be a combination of $759
million in the General Services Administration’s
Federal Building Fund and $646 million in the
FBI Construction account for a total of $1.4 billion dedicated toward construction of the project
in 2017. This substantial funding commitment
illustrates the Administration’s recognition of
the importance of the FBI as a critical member
of the U.S. intelligence community, as well as its
role in national security and in enforcing the
Nation’s laws and protecting civil liberties.

FIXING OUR BROKEN IMMIGRATION SYSTEM AND SECURING OUR BORDERS

Immigration Executive Actions
In November of 2014, the President announced
a series of actions consistent with his authority
to fix what he can of our broken immigration system. These actions are improving accountability
in our immigration system, strengthening our

national security and our economy, and building
on our past efforts to enforce immigration laws
with common sense and compassion.
According to the Council of Economic
Advisors, the President’s executive actions, if
fully implemented, would boost the Nation’s

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MEETING OUR GREATEST CHALLENGES: OPPORTUNITY FOR ALL

economic output by up to $250 billion and raise
average annual wages for U.S.-born workers
by 0.4 percent, or $220 in today’s dollars, in 10
years. Though the new deferred action policies
announced in 2014 have been put on hold in litigation, the Administration will continue fighting
to implement them. The Supreme Court of the
United States has accepted DOJ’s petition to review these policies.
The President’s other immigration executive actions continue to move forward. DHS
implemented new enforcement priorities and
strengthened engagement with local law enforcement in order to better focus our limited resources
on those who are threats to our national security,
public safety, and border security. Over 98 percent
of individuals removed by U.S. Immigration and
Customs Enforcement (ICE) currently fall into
DHS’s enforcement priorities. DHS also ended
the Secure Communities Program and replaced
it with the Priority Enforcement Program (PEP).
PEP is a commonsense program that works
with local law enforcement and communities to
apprehend priority individuals in local custody.
It is tailored to the needs of each jurisdiction in
order to keep communities safe, while preserving community trust. Today, the vast majority of
local law enforcement agencies are working with
DHS to keep America’s communities safe. These
include 15 of the top 25 jurisdictions that had
previously declined to fully participate in ICE’s
efforts to apprehend individuals held in their
custody.
Through new regulations and policies, the
Administration is also modernizing the legal
immigration system for families, employers, students, entrepreneurs, and workers. For example,
DHS finalized a regulation that allows the
spouses of certain high-skilled workers on their
path to becoming lawful permanent residents to
apply for work authorization. As a result, over
30,000 of these spouses are now able to work and
contribute to their families and the economy.
In addition, the White House released a report
that announced further steps to modernize and
streamline the legal immigration system so that

we can transform the largely paper-based system into a 21st Century, electronic system.
Finally, as a part of the immigration executive actions, the President established the
White House Task Force on New Americans, a
Government-wide effort tasked with better integrating and welcoming immigrants and refugees
into American communities. Last April, the Task
Force released its strategic plan with 48 recommendations to advance these goals. In December,
the Task Force released its one-year progress report, highlighting the actions taken over the last
year. These included the launch of the Building
Welcoming Communities Campaign, which includes 48 communities to date and strives to
support municipalities seeking to build more inclusive welcoming communities, and the “Stand
Stronger” Citizenship Campaign, which works to
raise awareness about the rights and responsibilities of U.S. citizenship.
These actions, however, are only a first step toward fixing our system, and the Administration
continues to count on the Congress for the
commonsense comprehensive reform that only
legislation can provide and that the American
public strongly supports. The reform supported
by the President and passed by the Senate in
2013 would have fixed the Nation’s broken immigration system by continuing to strengthen
U.S. border security, cracking down on employers
who hire undocumented workers, modernizing
the Nation’s legal immigration system, and
providing a pathway to earned citizenship for
hardworking men and women who pay a penalty and taxes, learn English, pass background
checks, and go to the back of the line.
The Administration supports the bipartisan
Senate approach, and calls on the Congress to
act on comprehensive immigration reform this
year. Although the President’s executive actions
will provide temporary relief while demanding
accountability for those whose cases are not an
enforcement priority, the Administration urges the Congress to act to permanently fix the
Nation’s broken immigration system. In addition
to contributing to a safer and more just society,

THE BUDGET FOR FISCAL YEAR 2017

comprehensive immigration reform would also
boost economic growth, reduce deficits, and
strengthen Social Security. 

Improving Border Security
Our long-term investment in border security and immigration enforcement has produced
significant and positive results. Under this
Administration, the resources that the DHS dedicates to security at the Southwest border are at
an all-time high. Compared to 2008, today there
are 3,000 additional Border Patrol agents along
the Southwest border. Border technology, such
as unmanned aircraft surveillance systems and
ground surveillance systems, as well as border
fencing, has more than doubled since 2008. The
Administration’s approach toward border security focuses on a risk-based approach that pursues
heightened deterrence, enhanced enforcement,
stronger foreign cooperation, and greater capacity for Federal agencies to ensure that the U.S.
border remains secure. 
Even as overall unauthorized Southwest
border crossings remain near the lowest levels
in decades, there continue to be significant fluctuations in the level of unauthorized crossings
by both families and unaccompanied children.
The Administration is working to address the
increase in such crossings in recent months and
the Budget calls for flexible contingency funding
for both DHS and HHS so that adequate funding
is available if the number of such illegal crossings
continues to rise. The Administration supports
strengthening and improving due process for
all those in immigration proceedings, including unaccompanied children and families. We
need every element of the court process to work
effectively to accomplish the goal of both honoring humanitarian claims and processing those
who do not qualify for relief. That is why DOJ
is working to hire the 55 additional immigration judges funded in 2016, and is maintaining

69
funding in the Budget for several programs that
provide legal representation and help to ensure
that individuals know their rights and responsibilities in removal proceedings.
The Budget continues to invest in border security by supporting U.S. Customs and Border
Protection (CBP) front line operations, funding
additional border security technology, recapitalizing aging radios and vehicles for field personnel,
expanding and enhancing intelligence and targeting capabilities, and investing in initiatives
that support transparency and accountability
across CBP.
The Budget supports 21,070 Border Patrol
Agents and 25,891 CBP Officers, including 2,070
new Officers supported by proposed increases to
user fees. The Budget includes over $353 million
for the acquisition and sustainment of technology and tactical infrastructure along U.S. borders.
These technology investments provide CBP with
increased situational awareness on the border,
as well as the ability to effectively respond to
border incursions. The Budget also provides $55
million for recapitalization of aging non-intrusive inspection equipment at ports of entry, which
would help CBP more efficiently detect security
threats and facilitate lawful trade and travel.
The Budget includes an increase of $95 million
to support the purchase and deployment of mission-critical equipment, including radios and
vehicles. The Budget also funds a total of $529
million in CBP intelligence and targeting activities that provide cutting-edge analytic support
to Agents and Officers in the field. The Budget
also includes targeted investments in initiatives
that support transparency and accountability,
including funding a Spanish-language call center, hiring additional Internal Affairs criminal
investigators, funding the purchase of less-lethal
weapons, and supporting the testing, evaluation,
and deployment of body worn cameras.

MEETING OUR GREATEST CHALLENGES:
NATIONAL SECURITY AND GLOBAL LEADERSHIP
Since the start of the Administration, the
Nation has grown stronger and better prepared
to both address global threats and seize opportunities to demonstrate global leadership.
We have renewed our alliances from Europe
to Asia. Our rebalance to Asia and the Pacific
is yielding deeper ties with a more diverse set
of allies and partners. When complete, the
Trans-Pacific Partnership will generate trade
and investment opportunities—and create
high-quality jobs at home. These alliances lay
the groundwork for increasing U.S. economic
power and harnessing the power of collective
action to address problems of global concern,
such as preventing a nuclear-armed Iran,
stopping the threat of Ebola, and leading international efforts to pursue a lasting peace
in Syria.
Leadership means a wise application of
military power and rallying the world behind
causes that are right. The United States has
moved beyond the large ground wars in Iraq
and Afghanistan that defined much of U.S. foreign policy over the past decade, dramatically

reducing the number of troops deployed in both
countries and saving more than $100 billion
per year. At the same time, a strong military
remains the bedrock of national security. The
Nation must continue to reform and invest in
our military—the finest fighting force the world
has ever known—to ensure its dominance in
every domain, to remain ready to deter and defeat threats to the homeland, and to be postured
globally to protect our citizens and interests.
Investments in national defense and the
security of Federal networks and critical infrastructure must be sustained because we
continue to face serious challenges to our national security, including from violent extremism and
evolving terrorist networks that pose a direct
and persistent threat to America and our allies,
cyber-threats on our Nation’s critical infrastructure, Russian aggression, the accelerating
impacts of climate change, and the outbreak
of infectious diseases. The Administration is
clear-eyed about these and other challenges and
recognizes that the United States has the unique
capability to mobilize and lead the international
community to overcome them.

ADVANCING NATIONAL SECURITY PRIORITIES
In accordance with the Bipartisan Budget Act
of 2015, the President’s Budget includes $583
billion for the Department of Defense (DOD),
a $2 billion, or 0.4 percent, increase from the
2016 enacted level, to provide the military the
resources needed for the President’s national
security strategy. These resources will enable
our military to protect the homeland, including
by providing support for ongoing military oper-

ations to defeat terrorist threats; build security
globally; project power; and, should deterrence
fail, win decisively against any adversary.
DOD’s base budget is $524 billion, which
is $2 billion, or 0.4 percent, above the 2016
enacted level. These resources will support
our military’s readiness and posture to address current security challenges and arm our

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MEETING OUR GREATEST CHALLENGES:
NATIONAL SECURITY AND GLOBAL LEADERSHIP

military with the capabilities needed to deter
and, if necessary, respond to future threats.
These capabilities include investments in 4th
and 5th generation fighters, unmanned systems,
a new long-range bomber, lethality upgrades to
the Stryker combat vehicle, and technologies
such as advanced torpedoes, electromagnetic
railguns, high-speed long-range weapons, and
new systems for electronic, space, undersea, and
cyber warfare.
In addition to investments in advanced capabilities, the Budget promotes innovation to
prepare for the future, including by modernizing
personnel systems and introducing human capital best practices, funding cutting-edge research
and technology initiatives, and promoting more
agile warfighting strategies and concepts.
In an increasingly complex and competitive
security environment, and in anticipation of
major modernization and recapitalization costs
beginning in the 2020s, the Budget also proposes a number of critical defense reforms that
are needed to reduce spending on unnecessary
or outdated force structure, modernize military
health care, and reduce wasteful infrastructure
and overhead.
DOD’s Overseas Contingency Operations
(OCO) request is $59 billion, which is roughly
equal to the 2016 enacted level, and is the level set by the Bipartisan Budget Act of 2015. It
provides the funding needed to combat diverse
terrorist groups, such as the Islamic State of
Iraq and the Levant (ISIL), so that they do not
threaten Americans at home. It also supports
a responsible transition in Afghanistan, counters Russian aggression toward neighboring
countries, and reassures allies and partners in
Europe.
The Budget provides $52.7 billion for the
Department of State and Other International
Programs (State/OIP), including $37.8 billion
in base funding and $14.9 billion in OCO, which
is a $0.1 billion decrease from the 2016 enacted

level, excluding emergency funding. The Budget
supports strategic investments in instruments
of national security, diplomatic power, and development priorities. These include funding the
President’s signature initiatives in global health,
food security, and climate change; deepening our
cooperation with Allies and regional partners;
continuing America’s leadership in the United
Nations and other multilateral organizations;
supporting democratic societies and advocating
for human rights; and investing in and protecting
U.S. diplomatic personnel and facilities abroad.
At a time when the demand for U.S. leadership
and engagement has never been greater, the
Budget provides America’s diplomats and development professionals with the tools they need to
advance the Nation’s interests and build a safer
and more prosperous world.
The President’s Budget also recognizes that
protecting our security requires long-term
planning and stable resourcing, as well as investments in the economic security on which our
national security depends. Starting in 2018, the
President’s Budget once again proposes to end
sequestration for both defense and non-defense
spending, and replace the savings by closing tax
loopholes for the wealthy and cutting inefficient
spending. Accepting the return of sequestration
in 2018 and beyond would add risk to our national security by threatening the size, readiness,
posture, and capability of our military, as well
as critical national security activities at non-defense agencies such as the Departments of State
and Homeland Security. Instead, the Budget
builds on the bipartisan agreements that provided sequestration relief from 2014 through 2017,
and which have enabled us to recover military
readiness, advance badly-needed technological
modernization, and provide the support our men
and women in uniform deserve. Moreover, it provides the stable long-term base budget funding
that is critical to military planning. As Secretary
Carter has said, “we need to base our defense
budgeting on our long-term military strategy,
and that’s not a one-year project.”

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THE BUDGET FOR FISCAL YEAR 2017
ADDRESSING TODAY’S CHALLENGES

Destroying ISIL
The President’s highest priority is keeping the
American people safe. That is why the United
States is leading the global coalition that will destroy ISIL. Our comprehensive strategy draws
on every aspect of American power and enables
the United States and its partners to continue
delivering blows to ISIL’s leaders, attack plotters, infrastructure, and revenue sources. The
Budget provides robust funding for DOD and the
Department of State so that the United States
can continue to hunt down terrorists, provide
training and equipment to forces fighting ISIL
on the ground, help stabilize communities liberated from ISIL in Syria and Iraq, disrupt ISIL’s
financing and recruitment, counter ISIL’s expansion, and support a political solution to the
Syrian civil war. In Iraq, we will meet immediate and evolving stabilization needs, promote
inclusive and responsive governance to bridge
the sectarian divide, and provide for additional
credit support and an expanded package of technical assistance to support economic reforms
for greater fiscal stability, which is crucial to
sustained success against ISIL. Specifically, the
Budget provides $7.5 billion to DOD to continue our military campaign, Operation Inherent
Resolve, which is expelling ISIL from Syrian and
Iraqi territory and disrupting ISIL efforts to plan
external attacks through the use of precision airstrikes, Special Operations forces, intelligence
collection and exploitation, and the development
of capable local ground forces in Iraq and Syria.
The Budget provides $4.0 billion for State/OIP
to pursue this effort, strengthen U.S. regional
partners, provide humanitarian assistance to
those impacted by the conflict, address needs in
refugee host communities, and counter the ISIL
narrative.

Combatting Global Terrorism
The Budget provides robust funding to support
a sustainable and effective approach for combating global terrorism, with a focus on protecting
the homeland, U.S. persons and interests abroad,
and empowering partner nations facing these

terrorist threats. The Administration continues
to implement its strategy to address recent domestic terror incidents and the emergence and
ongoing efforts by groups—such as al Qaeda
and ISIL—that are attempting to recruit, radicalize, and mobilize Americans to commit
violence by empowering communities and their
local partners to prevent violent extremism. It
commits the Federal Government to improving
engagement with and support to communities,
including sharing more information about the
threat of radicalization, building government
and law enforcement expertise for prevention,
and challenging terrorist propaganda through
words and deeds while helping communities
protect themselves, especially online.
The Department of Justice’s Countering
Violent Extremism (CVE) initiative is an
Administration priority and directly aligns with
and bolsters United Nations’ efforts to address
the threat of foreign terrorist fighters. The
Budget provides additional resources to support
community led-efforts, including $4 million to
conduct research targeted toward developing a
better understanding of violent extremism and
advancing evidence-based strategies for effective
prevention and intervention, $6 million to support flexible, locally-developed CVE models, $2
million to develop training and provide technical
assistance, and $3 million for demonstration projects that enhance the ability of law enforcement
agencies nationwide to partner with local residents, business owners, community groups, and
other stakeholders to counter violent extremism. 
The Department of Homeland Security’s
(DHS) newly created Office of Community
Partnerships will formalize and continue efforts
to build relationships and promote trust with
communities, focusing on innovative, community-based approaches that seek to discourage
violent extremism and undercut terrorist narratives and propaganda. The Budget also includes
for DHS $50 million in Federal assistance specifically for efforts to respond to emergent threats
from violent extremism and prevent, prepare

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MEETING OUR GREATEST CHALLENGES:
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for, and respond to complex, coordinated attacks.
In addition, CVE programs and activities are
considered generally eligible to receive Federal
assistance funding through other DHS grant
programs, such as the Urban Area Security
Initiative and the State Homeland Security
Grant Program.
As part of the Administration’s global efforts,
the Budget provides DOD and State/OIP funding to expand and deepen the global coalition
to combat terrorism and counter the spread of
extremist narratives. The Budget requests resources to enhance DOD’s counterterrorism
activities and support ongoing engagements for
partner capacity building through such mechanisms as institutional reform and training and
equipping programs. Within State/OIP, the
Budget supports programs that engage governmental and non-governmental organizations to
build community-based partnerships against
violent extremism, disrupt the flow of foreign
terrorist fighters to conflict zones, and weaken the legitimacy and resonance of extremist
messaging. 

21st Century Cybersecurity: Securing
the Digital Economy for All Americans
The President has made clear that cybersecurity is one of the most important challenges we
face as a Nation. Like so many of the world’s
evolving technologies, the internet was not initially designed to be used, and consumed, by
everyone. In 1985, about 2,000 people used
the internet, and almost all of them had a deep
understanding of how the technology worked.
Today, 3.2 billion people use the internet. What
started out as a useful tool for a few is now a
necessity for all of us—as essential for connecting people, goods, and services as the airplane or
automobile. The U.S. economy, national security,
educational systems, and social lives have all
become deeply reliant on this connectivity.
Yet while these advancements have created great opportunities, the risks have also
increased. As more and more sensitive data are
stored online, as critical functions increasingly

rely on networked technologies, as the economy
becomes ever more digital in nature, the consequences of malicious cyber activity grow more
dire each year. Our adversaries know this, as
evidenced in the steady stream of reports about
cyber incidents. Cyber threats to critical infrastructure are growing in scope, sophistication,
and persistence. Cyber-enabled theft of innovators’ intellectual property persists and identity
theft is the fastest growing crime in America.
The Federal Government is also vulnerable.
Many Federal departments and agencies are reliant on aging applications running on outdated
hardware and infrastructure that is difficult and
costly to defend against modern cyber threats.
Fragmented governance, insufficient policy, and
a shortage of skilled cybersecurity professionals
add to the challenges the Federal Government
must address. Innovators and entrepreneurs
have reinforced U.S. global technology leadership and grown the economy, but with each
revelation of a Government database infiltrated,
a high-profile company hacked, or a neighbor
defrauded, more Americans are left to wonder
whether technology’s benefits may someday be
outpaced by its costs.
That is why, since 2009, the President has executed a comprehensive strategy to defend the
Nation against cyber threats. The strategy brings
all elements of government together with private industry, academia, international partners,
and the public to raise the level of cybersecurity in both the public and private sectors; deter
and disrupt adversary activities in cyberspace;
improve capabilities for incident response and
resilience; and enact legislation to remove legal
barriers to and incentivize cybersecurity threat
information-sharing among private entities and
between the private sector and the Government.
The Budget builds on these achievements by
enhancing ongoing work, investing resources,
and focusing leadership attention on new broader reforms—including fundamental changes to
the way the Federal Government manages cyber
risks. The Budget invests over $19 billion, or a
roughly 35 percent increase from 2016, in overall

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THE BUDGET FOR FISCAL YEAR 2017

Federal resources for cybersecurity to support a
broad-based cybersecurity strategy for securing
the Government, enhancing the security of critical infrastructure and important technologies,
investing in next-generation tools and workforce, and empowering Americans to take better
control of their digital security. In particular,
this funding would support the Cybersecurity
National Action Plan, which aims to dramatically increase the level of cybersecurity in both
the Federal Government and the Nation’s digital ecosystem as a whole. Key initiatives that
are part of this investment package include the
creation of a Federal Chief Information Security
Officer, better securing high-value Federal
assets, retiring or upgrading Federal legacy information technology (IT) systems that cannot be
appropriately secured, rationalizing how Federal
IT and cybersecurity are delivered, educating
Americans so that they are more empowered
to keep their information secure, upgrading the
skills of the Nation’s cybersecurity workforce by
expanding cyber education at academic institutions, and securing commonly used software,
protocols, and standards that the internet relies
upon. These initiatives would also continue to
develop partnerships with industry to share
actionable information more effectively and
rapidly, and increase the cyber defenses of our
critical infrastructure.
With this Budget, a pivotal moment is reached
in the approach to the cybersecurity challenges
facing the Nation. The investments in the Budget
would allow America to better defend against cyber threats, but just as cyber threats evolve at a
relentless pace, so must the Nation’s approach to
the challenge. This problem will not be solved
in one year or by one Administration. These
challenges require that we take bold, aggressive
steps, sustain those efforts over time, and fundamentally change the way we as a Nation think
about issues of security, privacy, and digital identity in the online age. Yet, no single company
or government agency has all the answers for
what these steps should be or how to implement
them. Therefore, to gather the best ideas from
across industry, academia, and government, the
President is also establishing a Commission to

identify recommendations for the President, future Administrations, and the Nation to enhance
cybersecurity within the Government and across
the private sector, and to empower Americans to
take better control of their digital security.

Strengthening Federal Cybersecurity
The Federal Government is responsible for
issuing, handling, and storing much of America’s
most important data—including Social Security
numbers, tax returns, medical benefits, student
loans, and top secret documents. The Government
also operates critical functions, from satellites
to financial payment systems, which rely upon
networked technologies to function. It is critical
that the Government take responsible actions
for securing data and systems from those who
would do us harm.
In 2015, the Office of Management and Budget
(OMB), in coordination with the National
Security Council, DHS, the Department of
Commerce, and other departments and agencies, led a comprehensive review of the Federal
Government’s cybersecurity policies, procedures,
and practices. The review found that many
Federal IT systems are antiquated, making
them difficult to secure, update, and defend, enabling adversaries to gain and maintain access.
The review also revealed that current Federal
Government budgeting and management structures do not allow for the consistent application
of effective cybersecurity. In addition, the review found that the Federal Government does
not have enough cybersecurity or privacy professionals, as shown by the difficulty agencies have
in recruiting and retaining these personnel.
These challenges are relics of systems, policies,
and practices that were put in place before the
onset of modern cyber risks and which have been
updated only incrementally since then.
To begin to address these challenges, OMB directed a series of actions to further secure Federal
information systems through the Cybersecurity
Strategy and Implementation Plan for Federal
civilian agencies. These actions and others
have improved cybersecurity across the Federal

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MEETING OUR GREATEST CHALLENGES:
NATIONAL SECURITY AND GLOBAL LEADERSHIP

landscape. Examples of such action include:
Federal civilian agencies urgently patching
critical vulnerabilities; identifying high-value
assets; tightly limiting the number of privileged
users with access to authorized systems; and
dramatically accelerating the use of Personal
Identity Verification cards or an alternative form
of strong authentication for accessing networks
and systems. Since the Cybersecurity Sprint, an
intensive effort conducted in July 2015 to assess
and improve the health of all Federal assets and
networks, Federal civilian agencies have nearly
doubled their use of strong authentication for all
users from 42 percent to 81 percent.
However, given the magnitude of the challenge, we will continue to build on these actions.
That is why the Budget includes substantial
funding for the Federal Government-focused portions of the Cybersecurity National Action Plan.
Immediate steps are being taken to improve
the Federal Government’s cybersecurity while
laying the foundation for more strategic structural transformation in the future. To address
legacy technology problems, the Budget creates
a $3.1 billion revolving fund to retire antiquated
IT systems and transition to new, more secure,
efficient, modern IT systems, while also ensuring that Federal agencies maintain the security
posture of their critical systems through reliable lifecycle management and keeping abreast
of new technologies and security capabilities.
Ultimately, retiring or modernizing vulnerable
legacy systems will not only make us more secure, it will also save money. Agencies will also
invest resources in identifying and better securing their high-value information assets.
The Budget also funds initiatives to expand
the availability of cybersecurity services and
tools across the Government. For example, the
Budget invests $275 million for the DHS to
accelerate implementation of the Continuous
Diagnostic and Mitigation program, with the
long-term goal of increasing common cybersecurity platforms and services that protect
the Federal civilian Government as a holistic
enterprise. This program would assist agencies in managing cybersecurity risks on a near

real-time basis. The Budget also invests $471
million to continue deployment of the National
Cybersecurity Protection System (better known
as EINSTEIN) across the Federal civilian
Government. EINSTEIN detects and blocks
cybersecurity threats before they can impact
Federal agencies.

Securing the Digital Ecosystem
The Federal Government also has a responsibility to protect the Nation from threats in
cyberspace. Citizens and businesses should have
the tools they need to protect themselves. Just
as one does not have to be an expert mechanic
and professional driver to safely operate one’s
car, one should not have to be a technology expert to safely go online. Accordingly, the Budget
sustains and expands on the Administration’s
previous work in this area as part of the Digital
Ecosystem portion of the Cybersecurity National
Action Plan.
Individuals increasingly rely upon online identities for essential services and for their social
lives, but most current approaches to establishing and authenticating those online identities
are easy to compromise and challenging to use.
The Budget supports efforts to develop effective
identity proofing and multi-factor authentication
methods for users trying to obtain certain online
Federal Government services by funding the
General Services Administration’s development
of enhanced identify proofing and authentication
services. These services would be more secure
than systems relying on user names and passwords and would allow individuals to use the
same credential with multiple Federal agencies,
thereby making it easier to use as well.
Software is too often produced without sufficient consideration and design for security. This
is especially true for much of the core software,
standards, and protocols upon which users of
the internet rely. These core technologies are
often developed and maintained through an
open source model, and often do not have sufficient funding to ensure security and reliability.
To help secure widely used software, standards,

THE BUDGET FOR FISCAL YEAR 2017

and protocols, the Budget proposes $24.2 million to support the DHS Science and Technology
Directorate’s software assurance efforts.
The Nation’s critical infrastructure is also
increasingly under threat from disruption by
cyber means. Such disruption could have severe
adverse impacts on U.S. national security, economic security, and public health and safety. The
Budget funds DHS and Sector-Specific Agency
efforts to secure critical infrastructure, such as
programs designed to increase the security and
resilience of the electric grid. It also supports
efforts to promote greater usage of the National
Institutes of Standards and Technology’s
Cybersecurity Framework and best practices by
industry and on-going efforts to deepen our partnership with critical infrastructure owners and
operators. In addition, the Budget proposes up to
$4 million within the Department of Health and
Human Services to increase the agency’s ability
to utilize auditing and investigation authorities
with respect to cybersecurity, as well as to increase cyber threat information sharing within
the health care sector, and improve awareness
of cybersecurity by patients, practitioners, and
medical companies.

77
versaries. The Budget includes $318 million in
R&D investments at Federal civilian agencies
to address these ongoing challenges and continue investment in innovative cybersecurity
technologies.
Disrupting and Deterring Malicious
Cyber Activity. Even as we pursue initiatives
to enhance U.S. cyber defenses, we must also
invest in the capabilities needed to disrupt our
adversaries’ malicious activities, deter them
from taking action in the future, and hold them
accountable for their actions. The Budget includes funding to support the use of all the tools
of U.S. national power to achieve this goal—including diplomatic, economic, law enforcement,
intelligence, and military activities.

For example, the Budget includes funding to
further enhance or establish programs across
the civilian and defense agencies that would augment existing capabilities to defend the Nation
against cyber threats and provide the President
options in crisis or contingency. In support of
this effort, DOD has established a trained and
ready cyber operations workforce—including
the Cyber Mission Forces (CMF)—with all the
technical capabilities necessary to complete
The Budget also supports key initiatives for missions and support full-spectrum operations.
the larger national digital ecosystem by invest- The Budget fully supports this multiyear effort
ing $62 million to address the cyber workforce to improve defensive and offensive cyberspace
shortages and skill gaps that we face by creating operations capabilities and capacity, building on
a cybersecurity reservist program and expanding prior investments in tools, training, skills, and
cybersecurity educational programs at academic technology. The Budget also focuses on develinstitutions across the Nation. Current software oping cyber tools to deter state and non-state
engineering practices do not always produce soft- actors from conducting malicious cyber acts,
ware that is sufficiently secure and reliable, and producing new capabilities and tools, including
training for developers on how to design software systems to support CMF missions, integration
securely is uneven. These educational programs and improvements to the CMF platforms, and
would strengthen training for software devel- launching improved and consistent training for
opers to improve the security and reliability of cyber forces. These investments are guided by
software that individuals and businesses rely on.  the 2016 Federal Cybersecurity Research and
Development Strategic Plan that was recently
In addition, investments in cybersecurity delivered to the Congress and will provide the
research and development (R&D) provide the Nation with science and technology elements
science and technology foundation needed to to deter adversaries, protect cyberspace, deprovide more effective and efficient security, tect malicious activities, and adapt to threats,
secure fast-emerging information technologies, vulnerabilities, and attacks.
and thwart ever evolving cyber threats and ad-

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NATIONAL SECURITY AND GLOBAL LEADERSHIP

The Budget expands law enforcement capabilities with the Federal Bureau of Investigation
and other relevant agencies. It sustains the
Department of State and the Department of the
Treasury’s ability to use their respective diplomatic and economic tools to impose costs on
our adversaries. While we will use these tools
judiciously and with restraint, the President has
made clear that we will take action to defend
U.S. citizens and our interests. 
Improving the Response to Cyber
Incidents. Despite the best efforts to raise our
defenses and more effectively disrupt malicious
activity, cyber incidents—intrusions, thefts, and
even destructive events—will still occur. The
Federal Government must be ready to respond
effectively and rapidly when such events occur.
Therefore, the Budget continues to invest in
improvements to the Federal Government’s incident response capabilities. In particular, the
Budget enables the Cyber Threat Intelligence
Integration Center to assume its role as a cornerstone of the Government’s cybersecurity
capabilities by fusing intelligence and “connecting the dots” regarding malicious foreign cyber
threats to the Nation. We will also invest the
resources required to be ready to work with the
private sector to respond to incidents and, if necessary, to take action to protect U.S. interests,
both domestically and abroad. 
The digital age has already changed our lives
in countless remarkable ways, and perhaps most
remarkable of all, its potential still remains
largely untapped. Ultimately, our vision is for
an internet, cyberspace, and digital life that is
inherently secure. If we modernize our approach
to security, and prioritize keeping Americans
safe, we will unlock more of that potential,
and continue to deliver on the promise of this
incredible age.

Supporting the Transition
in Afghanistan
The Budget continues to support long-term
national security and economic interests in
Afghanistan and helps sustain political, eco-

nomic, and security gains in the country as the
United States draws down its forces and assistance levels gradually decline. It also includes
resources to reinforce Afghanistan’s security and
development by supporting military training and
assistance as well as health, education, justice,
economic growth, governance, and other civilian
assistance programs necessary to promote stability and strengthen diplomatic ties with the
international community. The Budget also supports the U.S. military mission to train, advise,
and assist the Afghan National Security Forces
and maintain a counterterrorism capability.

Countering Russian Aggression
and Supporting European Allies
In response to increasing attempts by the
Russian Federation to constrain the foreign and
domestic policy choices of neighboring countries,
the Budget includes over $4.3 billion for political,
economic, public diplomacy, and military support
to build resilience and reduce vulnerabilities
to Russian aggression among NATO allies and
partner states in Europe, Eurasia, and Central
Asia. To increase resilience within the governments and economies most targeted by Russian
aggression, foreign assistance will support efforts to improve democracy and good governance,
increase defense capabilities, strengthen rule of
law and anti-corruption measures, and promote
European integration, trade diversification, and
energy security. This includes bolstering capabilities across the region to counter Russian
aggression, with a particular focus on Ukraine,
Georgia, and Moldova. In addition, through continued investments in U.S. public diplomacy and
international media activities, the United States
will seek to engage vulnerable populations in
periphery countries, expand U.S. support for
freedom of the press and independent journalism in the region, and advance America’s foreign
policy interests.
To increase security and reassure our NATO
allies and partner states in Europe, the Budget
provides over $3.4 billion for DOD’s European
Reassurance Initiative (ERI). ERI funding would
enable the United States to increase military

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THE BUDGET FOR FISCAL YEAR 2017

exercises and training, sustain a larger continuous rotational presence in Europe, enhance U.S.
preparedness to reinforce NATO allies through
the prepositioning of equipment, and build the
capacity of partner states in Europe to enhance
interoperability with the United States and
NATO to strengthen regional security.

Providing Further Support for the
Central American Regional Strategy
The Budget supports the U.S. Strategy for
Engagement in Central America by investing
in a long-term, comprehensive approach designed to address the root causes of migration
of unaccompanied children and families from
the region. The Budget builds on the funding
the Congress enacted in 2016 by providing $1
billion to further support the Strategy, including
financing support, to continue progress toward
advancing security, prosperity, and economic
growth in the region. This effort is designed to
promote economic opportunities for the Central
American people; build democratic, accountable,
transparent and effective public institutions, and
provide a safer and more secure environment
for its citizens. The Budget request anticipates
increased public and private investments in the
region, which would increase economic growth
and provide the necessary stability to counter
illicit activities undermining Central American
security. The Budget assumes continued coordination with international financial institutions,
the private sector, civil society, and other international partners to promote prosperity through
well-coordinated plans to address economic
growth challenges. Executing the Strategy is inextricably linked to the readiness of the Central
America governments and their ability to demonstrate continued will to undertake substantial
political and economic commitments to bring
about positive change in the region. Accordingly,
the Strategy would continue to complement the
“Alliance for Prosperity” plan jointly developed by
the El Salvador, Honduras, and Guatemala governments to accelerate longer-term reforms and
improvements in the lives of ordinary citizens.

Advancing the Rebalance
to Asia and the Pacific
The Budget supports the Administration’s
commitment to a comprehensive regional strategy in Asia and the Pacific that reinforces a
rules-based order and advances security, prosperity, and human dignity across the region, as
described in the highlights below. Recognizing
that security in the Asia-Pacific region underpins regional and global prosperity, the Budget
aligns resources and activities to strengthen
U.S. alliances and partnerships with emerging
powers, promote regional economic cooperation,
and build a constructive relationship with China
that simultaneously supports expanding practical cooperation on global issues while candidly
addressing differences. It also provides the necessary resources to implement the Trans-Pacific
Partnership (TPP), a historic, high-standard
trade agreement with 11 countries of the region
that levels the playing field for American workers and American businesses. Through TPP, the
United States will lead the way in revitalizing
the open, rules-based economic system that will
boost American exports while creating jobs at
home by promoting strong labor, environmental,
and intellectual property protections.
To promote universal and democratic values,
the Budget provides support for educational
and cultural exchanges and strengthens regional cooperation with organizations, such as the
Asia-Pacific Economic Cooperation forum and
the Association of Southeast Asian Nations. The
Budget also provides resources and advances
regional cooperation in counterterrorism, countering violent extremism, and nonproliferation.
In pursuit of security cooperation, the Budget
enhances and modernizes U.S. defense relationships, posture, and capabilities with a focus
on maritime security. DOD funding remains
consistent with the priorities identified in the
2012 Defense Strategic Guidance and the 2014
Quadrennial Defense Review. DOD’s most significant efforts to support the rebalance include
implementing the Southeast Asia Maritime
Security Initiative; increasing the number of
ships assigned to the Pacific Fleet outside of U.S.

MEETING OUR GREATEST CHALLENGES:
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80

territory by approximately 30 percent, which
improves the Navy’s ability to maintain a more
regular and persistent maritime presence in
the Pacific; rotating four Littoral Combat ships
through the region through 2017; and deploying
the first P-8 Poseidon maritime patrol aircraft off
Singapore. DOD continues to develop its defense
relationship with India through the Defense
Technology and Trade Initiative, the Joint
Working Group on Aircraft Carrier Technology
Cooperation, and the Jet Engine Technology
Joint Working Group.

Growing Partnerships in Africa
The Budget supports the Administration’s
commitment to a broad partnership with countries in Africa that spans security, economic,
and democracy and development priorities.

The Budget provides funding to ensure the U.S.
will uphold the commitments it made during
the U.S.-Africa Leaders Summit in 2014, including with respect to Power Africa, Trade
Africa, the Security Governance Initiative, the
Young African Leaders Initiative, the African
Peacekeeping Rapid Response Partnership, and
the Early Warning and Response Partnership.
It also provides resources for implementing the
peace agreement in South Sudan and helping
the transitional government build the institutions it needs for a sustainable peace; supporting
regional efforts to end the threat posed by the
Lord’s Resistance Army; delivering expanded
security assistance to Nigeria and its regional partners to counter Boko Haram; securing
governance and security gains in Somalia; and
supporting preparations for peaceful and credible
democratic elections on the continent.

PREPARING FOR THE FUTURE
In addition to addressing today’s changing
security environment, the Budget makes significant investments to maintain our military’s
superiority and ensure the United States always
has an operational advantage over any potential
adversary. DOD does this by driving smart and
essential innovation: pursuing new research
and technology development; updating and
refining operational concepts and warfighting
strategies; identifying and supporting capacity building among local partners; building the
Force of the Future; and pursuing additional
enterprise reform.

Building the Force of the Future
The United States has the world’s finest
fighting force, and our people are our most enduring advantage. The Budget invests in the
health of today’s force, maintaining the current
end strength ramps for our military services,
continuing to recover readiness, and providing
competitive compensation for our service men
and women. It continues efforts to care for our
military families, veterans transitioning to other employment, and our wounded warriors and

families of the fallen. The Budget also invests
in the Force of the Future to ensure our people
remain the best. These investments include attracting a new generation to service, integrating
data into our human capital processes, creating
dynamic links among the active force, the private
sector, and reserve component, and investing
in the health and well-being of our military
personnel and their families.

Maintaining Technological Superiority
For generations the United States has relied
on technological superiority to remain dominant across the domains of air, land, sea, and
space as well as the cyber arena. In recent
years, potential adversaries have accelerated
their investments in military modernization
and advanced technologies, narrowing the U.S.
technological advantage. In the 2016 Budget,
the Administration prioritized research, development, test, and evaluation (RDT&E) spending
at a nine percent increase over the 2015 enacted
level. The Budget continues that trend, raising
the RDT&E budget levels to $71.8 billion while
remaining focused on innovation across DOD.

THE BUDGET FOR FISCAL YEAR 2017

Unprecedented collaboration among the military services and with other agencies, especially
the intelligence community, are creating new
concepts and applications of current, first-rate
weapon systems operated by trusted, agile, expert
operators that will expand technological superiority. The Budget also continues to prioritize the
necessary long-term investments in early-stage
science and technology at $12.5 billion to fund
future technologies to reshape the battlespace,
such as hypersonics, unmanned, and autonomous systems. New and innovative efforts in
technology transfer are set to take advantage
of early-stage basic research investments made
throughout the Government. Cooperative efforts
with both industry and academia are creating game-changing opportunities for national
security in areas ranging from advanced manufacturing to new technologies for training. The
combination of simultaneous investments in future defense system technologies and programs
that deploy new technologies faster, leverage
adapted commercial off-the shelf technologies,
and develop strategic capabilities that bend the
cost curve will change the calculus of warfare for
our potential opponents both today and into the
foreseeable future.

Strengthening Space Security
Space capabilities are vital to U.S. national
security and the ability to understand emerging threats, project power globally, support
diplomatic efforts, and enable global economic
prosperity. It is the shared interest of all nations
to act responsibly in space to help prevent mishaps, misperceptions, and mistrust. The Budget
supports a variety of measures to help assure the
use of space in the face of increasing threats to
U.S. national security space systems. In addition, it supports the development of capabilities
to defend and enhance the resilience of these
space systems. These capabilities help deter and
defeat interference with, and attacks on, U.S.
space systems.

81
Making the Military More Effective and
Efficient through Defense Reforms
Successfully executing the defense strategy
requires prioritizing every dollar and spending
it effectively. The Budget supports this goal by
adjusting force structure, modernizing DOD’s
health care system, and further reducing wasteful overhead and infrastructure. The 2017
reform proposals build on the success of recent
initiatives, such as the effort with the Congress
to slow growth in compensation costs and enact
a modern, military retirement system featuring
both defined benefit and defined contribution
plans. The Department of Defense’s annual
acquisition performance reports also strongly indicate that Better Buying Power initiatives are
reducing cost growth and significantly lowering
prices paid for major weapons systems.
Yet the need for reform remains urgent.
Savings from reform can take years to fully
achieve, and current reform proposals will be
especially critical as they reach their full effect
in the 2020s, when several major defense costs
will converge. By then, the Department will
be simultaneously recapitalizing the tactical
air fleet and the nuclear triad, as well as other
weapons systems. These recapitalization efforts
form only one part of a broader investment strategy required to confront the threats posed by the
accelerating military modernization programs
of advanced competitors, and the rapid evolution of asymmetric technology, such as missile
threats. If reforms do not begin now, the security
and fiscal choices of the next administration will
be much more challenging, with consequences
for taxpayers, servicemembers, and national
security.
The Department of Defense is responsible for
implementing the Nation’s defense strategy, but
depends on congressional authority to execute
force structure shifts that match capability with
strategy. The Budget re-proposes retiring, restructuring, and modernizing a range of systems,
to ensure that the military has the most capable,
versatile, and survivable systems to perform
its missions. Examples of critical force structure shifts that better match capability with

82

MEETING OUR GREATEST CHALLENGES:
NATIONAL SECURITY AND GLOBAL LEADERSHIP

current and emerging threats include the Army’s
Aviation Restructure Initiative and the Navy’s
phased approach to cruiser modernization—both
of which require congressional support.
In modernizing its health care system, the
Department will simplify TRICARE—the
health care program of the Military Health
System—while adding choices for beneficiaries
and encouraging the use of existing military
treatment options.
The Budget reduces overhead and waste,
such as through continued reductions to DOD’s

major headquarters and the establishment of
Service Requirements Review Boards across
the Department to identify further efficiencies
and cost-savings. The Budget also requests that
the Congress authorize another round of Base
Realignment and Closure (BRAC), which is critically important to re-align resources currently
consumed by main­aining unneeded facilities.
t
The need to reduce excess facilities is so critical
that, in the ab­ence of authorization of a new
s
round of BRAC, the Administration will pursue
new options to reduce wasteful spending on surplus infrastructure within existing authorities.

SUSTAINING THE PRESIDENT’S DEVELOPMENT AND DEMOCRACY AGENDA
The successful pursuit of sustainable global
development and democracy is a central pillar of
U.S. foreign policy and national security and is
essential to building a more stable and prosperous world. The Budget continues to advance the
Administration’s development and democracy
initiatives and activities as it seeks to reduce extreme poverty, encourage broad-based economic
growth, and support democratic governance
and human rights, and to drive progress toward
meeting the global development vision and priorities adopted in the 2030 Agenda for Sustainable
Development. 
The Budget provides $1.0 billion for Feed the
Future, the President’s food security initiative,
which uses development programs to reduce
hunger sustainably, address the root causes of
food insecurity, improve economic resilience,
nutrition, and agricultural productivity, and develop regional markets and trade. The Budget
also supports greater climate resilience and
low-emission economic growth in partner countries, especially the poorest and most vulnerable,
through $1.3 billion in funding for the Global
Climate Change Initiative (GCCI). (See additional discussion of the GCCI in Chapter 2.) It
also includes $300 million for Power Africa, which
aims to expand electricity access in sub-Saharan
Africa to more than 60 million new households
and businesses by helping to catalyze private

investment in new and cleaner power generation projects and increasing the capacity of
African governments and utilities to develop and
manage their domestic energy sectors. 
More generally, the Budget provides $9.0
billion for the Development Assistance and
Economic Support Fund accounts, $2.3 billion for
the Department of the Treasury’s international
programs, and $1.0 billion for the Millennium
Challenge Corporation, which continues to provide a powerful example of an evidence-based
approach to development. Together, this funding supports activities across numerous sectors
of development—including agriculture and
nutrition, environmental sustainability and biodiversity, effective and accountable democratic
governance and institutions, infrastructure,
education, addressing corruption and financial
mismanagement in countries working toward
reform, promoting the rights of women and girls
around the world, and enabling sustained and
inclusive economic growth.

Mobilizing the Private Sector to
Advance Sustainable Development
To ensure that investments in global development have long-term and transformative
impacts, the United States has increasingly
focused these investments to achieve sustain-

83

THE BUDGET FOR FISCAL YEAR 2017

able development outcomes, mobilize increased
private capital flows, diversify the range of private sector and nongovernmental partners with
whom we work, and enable developing countries
to better mobilize and use their own domestic
resources. The Administration has championed
a new model for development assistance that
aims to catalyze private sector and third party investment, understanding that the sheer
cost of investments needed to achieve the next
generation of development goals is unattainable by Official Development Assistance alone.
Development programs that mobilize the private
sector advance U.S. interests, deliver tangible
results within the realm of complex development
finance, and in some cases also support U.S.
economic growth. 
The Budget includes roughly $200 million for
the Overseas Private Investment Corporation,
the Trade and Development Agency, and the
U.S. Agency for International Development’s
(USAID’s) Development Credit Authority, and
supports efforts to catalyze private sector funding
through other avenues such as the Millennium
Challenge Corporation, in order to mobilize billions of dollars to support the Administration’s
priority development projects. These efforts
build on the models of the Administration’s flagship development initiatives like Power Africa
and the New Alliance for Food Security and
Nutrition, which have successfully showcased
how U.S. taxpayer dollars can mobilize greater
investments from the private sector, other donors, and foreign governments. The Budget also
supports efforts to build developing countries’
capacity to mobilize and effectively use domestic
resources—including through improved revenue
and fiscal management—and to attract domestic
and foreign private investment to finance their
own development and reduce their dependence
on foreign aid. For example, the “Doing Business
in Africa” initiative facilitates access and exports
for American companies on a continent that has
six of the top 10 fastest growing countries in the
world.

Addressing Humanitarian Needs
The Budget maintains strong support for food
aid and other humanitarian assistance, providing about $6.2 billion to help internally displaced
persons, refugees, and others affected by natural or man-made humanitarian disasters. The
United States has provided over $6 billion annually in humanitarian assistance for the past
several years and continues to be the largest single humanitarian donor. Current trends show
a greater number of people in need throughout
the world due to more protracted crises and
more extreme weather events. Meeting urgent
humanitarian needs saves millions of lives and
is integral to advancing the Administration’s
long-term goals of assisting people in crisis and
reducing extreme poverty.
For the Syrian crisis alone, the United States
provided over $4.5 billion in humanitarian assistance through 2015 to address the impacts
of conflict and mitigate the need for affected
populations in Syria and in countries of first
asylum. Refugee resettlement is an important
component in our multifaceted response to the
global refugee crisis and the Budget supports
the admission of at least 100,000 refugees to the
United States. In maintaining our long-standing tradition of providing refuge to some of the
world’s most vulnerable people, we will continue
to strengthen our robust screening protocols, as
we have no higher priority than safeguarding
the American public.

Advancing Global Health
The Budget maintains support for effective global health programs, including for the
President’s Malaria Initiative and the President’s
Emergency Plan for AIDS Relief (PEPFAR). To
support the President’s call to end the scourge of
malaria, the Budget includes an increase of $71
million for the President’s Malaria Initiative, for
a total of $745 million. Also, the Budget proposes to use an additional $129 million out of the
remaining Ebola emergency funding to combat
malaria. The Budget includes $1.35 billion for
the Global Fund to Fight AIDS, Tuberculosis
and Malaria. When combined with $243 mil-

MEETING OUR GREATEST CHALLENGES:
NATIONAL SECURITY AND GLOBAL LEADERSHIP

84

lion in 2016 enacted funds above the President’s
matching pledge to the Global Fund’s Fourth
Replenishment, the United States will be able to
contribute nearly $1.6 billion by 2017 toward a
Fifth Replenishment contribution. Building on
the President’s September 2015 announcement
of U.S. HIV/AIDS prevention, care, and treatment
targets through 2017, the Budget includes $4.65
billion for U.S. bilateral PEPFAR efforts, including enduring support for PEPFAR’s Impact Fund
to focus on reducing HIV infections in high-burden populations and areas. The Budget also
increases support for Gavi, the Vaccine Alliance
as part of the $1 billion, four-year U.S. pledge,
and continues strong support for other programs
to end preventable child and maternal deaths.

Corporation, as well as other agencies and
programs like PEPFAR, to address the range
of challenges preventing adolescent girls from
enrolling, completing, and succeeding in school.
Over the past year, the initiative has launched
a $25 million Challenge Fund, supported Peace
Corps Volunteers in 13 countries, and forged adolescent girls’ education partnerships with several
countries. The Budget provides more than $100
million in new funds for Let Girls Learn, which
will augment ongoing investments that support
adolescent girls. Let Girls Learn will continue to
leverage public-private partnerships, and challenge organizations, governments, and private
sector partners to commit resources to improve
the lives of adolescent girls worldwide.

The Administration continues to be vigilant
on Ebola and to prepare to respond to future
outbreaks. The Ebola epidemic in West Africa
spotlighted the need to urgently strengthen
global health security in vulnerable countries
around the world that have poor infrastructure,
limited capacity, high population density, and
major transport hubs. The Budget increases support for programs to advance the Global Health
Security Agenda (GHSA) at USAID and the
Centers for Disease Control and Prevention, and
continues support for DOD to improve disease
surveillance, laboratory capacity, and biosecurity
in support of the GHSA.

Building Strong Democratic
Institutions

Supporting Let Girls Learn
In March 2015, the President and First
Lady launched Let Girls Learn, which brings
together the Department of State, USAID, the
Peace Corps, and the Millennium Challenge

The Budget continues to provide robust support for democracy, human rights and governance
programs, recognizing that promoting democracy and good governance reflects American values
and is essential to achieving our broader global
development and national security objectives.
U.S. democracy programs foster good governance, promote access to justice, strengthen civil
society and reinforce effective and accountable
institutions at all stages of countries’ democratic transitions. The Budget includes funding for
programs in the areas of rule of law and human
rights, good governance, political competition
and consensus-building, and civil society capacity-building. It also supports key Administration
initiatives, including the Open Government
Partnership and Stand With Civil Society
initiative.

HONORING OUR COMMITMENT TO VETERANS
The Budget includes $75.1 billion in discretionary 2017 resources for the Department of
Veterans Affairs (VA), a 4.9-percent increase
over 2016. The Budget also includes an advance appropriation request of $66.4 billion for
2018 medical care, a 2.2-percent increase over
the revised 2017 request. This funding would

ensure continued investment in the five pillars
the President has outlined for supporting the
Nation’s veterans: providing the resources and
funding they deserve; ensuring high-quality and
timely health care; getting veterans their earned
benefits quickly and efficiently; ending veteran
homelessness (which has dropped 36 percent

85

THE BUDGET FOR FISCAL YEAR 2017

since 2010, as measured by the yearly Pointin-Time count); and helping veterans and their
families get good jobs, an education, and access
to affordable housing.

Improving Veteran Access
to Quality Health Care
The Budget provides $65.1 billion for health
care and continues to support the Administration’s
goal of providing timely, high-quality health
care for the Nation’s veterans. Building on the
increased access made possible by the Veterans
Access, Choice, and Accountability Act of 2014,
the Budget proposes resources and legislative
changes to further improve veterans’ ability to access care, as described in the “Plan to Consolidate
Programs of the Department of Veterans Affairs
to Improve Access to Care,” which was submitted to the Congress on November 1, 2015. These
administrative improvements will increase efficiency when veterans are best served by seeing
non-VA medical providers. Further, following
the anticipated release of recommendations
from the Commission on Care in mid-2016, the

Administration will determine how to best meet
veterans’ current and future needs using VA and
community resources.

Speeding the Processing of Disability
Compensation Claims and Appeals
The VA continues to make tremendous progress reducing the veteran disability claims
backlog, which is down from a high of over
611,000 in March of 2013 to approximately
75,000. However, with approximately 11 percent of all initial claims decisions appealed by
veterans, the increased completion of initial
claims has created a corresponding increase in
the number of appeals. The Budget includes
legislative proposals to streamline the appeals
process and provides additional funding to support technological improvements and the hiring
of additional employees to continue to reduce
both initial claim and appeal backlogs. Further,
the Budget funds continued efforts to ensure
consistent, personalized, and accurate information about services and benefits, especially in
compensation and pension claims processing.

A GOVERNMENT OF THE FUTURE
“In this democracy, we the people recognize that this government belongs to us, and
it’s up to each of us and every one of us to make it work better… We all have a stake in
government success—because the government is us.”
—President Barack Obama

The President is committed to driving lasting change in how Government works—change
that makes a significant, tangible, and positive
difference in the economy and the lives of the
American people. Over the past seven years,
this Administration has launched successful
efforts to modernize and improve citizen-facing
services, eliminate wasteful spending, reduce the
Federal real property footprint, and spur innovation in the private sector by opening to the public
tens of thousands of Federal data sets and innovation assets at the national labs. Yet, despite
this progress, there is more work to be done. The
President’s Management Agenda is addressing
this by improving the way Government works
and delivers for citizens.
The President’s Management Agenda has
four pillars:
1) Effectiveness—delivering a
Government that works for citizens and businesses; 2) Efficiency—increasing quality and
value in core operations; 3) Economic Growth—

opening Government-funded data and research
to the public to spur innovation, entrepreneurship, and job opportunities; and 4) People and
Culture—unlocking the full potential of today’s
Federal workforce and building the workforce
we need for tomorrow. The Administration is
executing the President’s Management Agenda
through Cross-Agency Priority (CAP) Goals,
which were introduced by this Administration to
improve coordination across multiple agencies to
help drive performance on key priorities and issues. Performance for each CAP goal is regularly
tracked throughout the year and goal teams are
held accountable for results, which are updated
quarterly on Performance.gov. In addition to the
Management Agenda, the Budget also supports
the President’s commitment to using evidence to
drive policy decisions and his plan to reorganize
the Federal Government so that it does more for
less, and is best positioned to assist businesses
and entrepreneurs in the global economy.

EFFECTIVENESS: A GOVERNMENT THAT WORKS
FOR CITIZENS AND BUSINESSES
A more effective Government will not only
better deliver services for citizens, but will also
use taxpayer dollars more efficiently. Ultimately,
the Federal Government must be able to deliv-

er the user experience and engagement that
the American people and businesses expect
and deserve. The Budget provides resources to
continue the progress toward implementing the

88
President’s Management Agenda, focusing on
four key areas: delivering smarter information
technology (IT); strengthening Federal cybersecurity; delivering world-class customer service;
and reshaping engagement with communities
and citizens.

Delivering Smarter IT
The Administration has embarked on a comprehensive effort to fundamentally improve
the way that the Government delivers technology services to the public, called the Smarter
IT Delivery Agenda. The Agenda is focused on
recruiting top technologists and entrepreneurs
to work within agencies on the highest priority
projects, leveraging the best processes to increase
oversight and accountability for IT spending,
and ramping up Government contracting with
innovative companies. To date, these and other
efforts have saved over $3.5 billion.
Recruiting the Best Talent. A key component of the Smarter IT delivery strategy is
recruiting the best talent to work as part of,
and with, the Federal Government. In 2014,
the Administration piloted the U.S. Digital
Service (USDS)—a group of select private-sector innovators, entrepreneurs, and engineers
recruited to Government service to improve and
simplify the digital experience between individuals, businesses, and the Government. Digital
Service experts have worked in collaboration
with Federal agencies to implement streamlined
and effective digital technology practices on the
Nation’s highest priority programs. The team
has also worked to disseminate best practices
such as the U.S. Web Design Standards, an open
source visual style guide to create consistent
and superb user experiences across U.S. Federal
Government websites.
USDS teams have also reimagined how
Government services should be provided to the
public. The USDS supported the United States
Citizenship and Immigration Services (USCIS)
transition to electronic filing and processing of
Form I-90 to renew, or replace, a green card and
the Immigrant Visa Fee payment. Closing down

A GOVERNMENT OF THE FUTURE

the old Electronic Immigration System will
save the agency millions of dollars per year in
ongoing operations, maintenance, and licensing
costs, and the newly launched myUSCIS makes
it easier for users to access information about
the immigration process and immigration services. USDS supported HealthCare.gov during
the 2015 open enrollment season, and worked
between open enrollment seasons to dramatically improve site performance and save millions of
dollars per year in operating expenses. In addition, USDS launched the new College Scorecard
with the Department of Education to give students, parents, and their advisors the clearest,
most accessible, and most reliable national data
on college cost, graduation, debt, and post-college
earnings. This new College Scorecard provides
students and families with information on college
performance that can help them identify colleges
that are serving students of all backgrounds well
and providing a quality and affordable education.
It empowers Americans to search for colleges
based on what matters most to them and allows
them to compare the value offered by different
colleges to help improve their decision. Within
the first month, the College Scorecard had over
one million users, more than 10 times the users
its predecessor had in a year. Over a dozen other organizations have used the Scorecard data
to launch new tools to support students in their
college search and application processes.
To facilitate requests for short-term support,
USDS created a new Rapid Response team in
2015. This team’s work included restoring service for the Department of State’s Consolidated
Consular Database, after an outage led to a twoweek suspension of visa issuances worldwide. In
2016, the USDS is partnering with the Internal
Revenue Service (IRS) to bolster electronic authentication procedures, laying the groundwork
for unified and secure taxpayer access to all IRS
digital services.
To institutionalize the dramatic improvements that this approach has demonstrated, the
Budget funds the development of digital services
teams at 25 agencies. These small, high-impact
teams will drive the quality and effectiveness

THE BUDGET FOR FISCAL YEAR 2017

of the agencies’ most important digital services.
The Budget also funds the USDS headquarters to maintain and expand the team that
can coordinate these efforts across the Federal
Government. As an example, USDS will work
closely with agencies to provide the new agency
teams with hiring, training, and procurement
support.
To dramatically improve customer satisfaction with Federal technology services, there
is a critical need for IT specialists to serve on
digital services teams. To that end, the Budget
supports the Administration’s aggressive goal
of hiring and placing 500 top technology and
design experts to serve in the Government by
January 2017. In addition, USDS worked with
the Office of Personnel Management (OPM) to
create a term-appointment hiring authority for
Digital Services Experts to more quickly get
talent into Government service. Working with
OPM to expand these flexible hiring options and
spread proven hiring practices across the Federal
Government will remain a priority in 2016 and
2017.

89
Technology Acquisition Reform Act (FITARA)
in December 2014, gave the Administration’s
ongoing work under Smarter IT Delivery an
added boost. To aid in Government-wide implementation, OMB released guidance to agencies
on FITARA implementation—Management and
Oversight of Information Technology Resources.
This guidance empowers Federal executives to
help ensure that IT resources and tools are used
effectively and strategically to help programs
better meet their missions. It also places an
emphasis on the IT workforce by focusing on the
relationship between bureau and departmental CIOs, requiring agencies to have a robust
IT workforce planning process, and positioning
CIOs so that they can reasonably be held accountable for how effectively their agencies use
modern digital approaches.

Finally, the Administration has been expanding opportunities for the current Federal IT
workforce to rise to the challenge and sharpen
their skills by increasing training opportunities
for these professionals. For example, this past
year the Chief Information Officer (CIO) Council,
Chief Acquisition Officer Council and the Office
of Management and Budget (OMB) launched the
IT Solutions Challenge. Throughout the course
of several months, over 40 IT and acquisition professionals worked in teams to develop innovative
solutions for some of the Federal Government’s
most challenging IT problems. These types of
training programs work in tandem with an enhanced focus on expanding the Government’s
digital acquisition expertise. In the past year,
30 Federal acquisition professionals piloted an
innovative approach to digital IT acquisition
training.

The Administration has also encouraged
data-driven
processes
to
provide
effective oversight of Government IT. For example, the Administration’s PortfolioStat process—a
data-based review of agency IT assets—has
not only strengthened Federal IT, but made it
significantly more cost effective. PortfolioStat
and other IT reform efforts have helped the
Government achieve more than $3.5 billion in
savings over the past four years while ensuring
agencies are efficiently using taxpayer dollars to
deliver effective and innovative solutions to the
public. PortfolioStat promotes the adoption of
new technologies, such as cloud computing and
agile development practices. As a result of these
continuing efforts, the Federal Government now
spends approximately 8.2 percent of its IT budget
on provisioned services, such as cloud computing.
In addition, agile development—an incremental,
fast-paced style of software development that
reduces the risk of failure—is now used for half
of new software projects compared to just 35
percent in 2012 and IT hardware spending has
declined 25 percent from 2010 levels. In 2017,
the use of PortfolioStat to increase efficiency in
the Federal IT portfolio will continue.

Leveraging the Best Processes. The passage of the first major IT reform legislation
in almost 20 years, the Federal Information

Contracting with Innovative Companies.
The Federal Government must work with
private-sector innovators to ensure the best

90
use of proven and emerging technologies and
practices, which requires rethinking procurement rules, processes, and practices to reduce
barriers to entry. The President has taken
bold steps to create an environment that opens
more Federal contracting opportunities to new
companies—especially to help solve IT challenges—and these efforts are paying off with almost
200 new small businesses winning Federal contracts for IT software development investments
in 2015. In 2017, these efforts to increase digital acquisition capability within agencies, train
agency personnel in digital IT acquisitions, and
test innovative contracting models will expand.

Strengthening Federal Cybersecurity
Strengthening the cybersecurity of Federal
networks, systems, and data is one of the most
important challenges the Nation faces. As cyber
risks have grown in severity over recent years,
the Administration has executed a comprehensive strategy to address cybersecurity across
the Nation, as outlined in the National Security
Chapter. Building upon the Administration’s
broader efforts for 21st Century Cybersecurity,
in 2015 OMB, in coordination with the National
Security Council (NSC), the Department of
Homeland Security (DHS), the Department of
Commerce, as well as other departments and
agencies, executed a series of actions to bolster
Federal cybersecurity and secure Federal information systems through the Cybersecurity
Strategy and Implementation Plan (CSIP).
In 2015, these actions and others led to areas of significant progress across the Federal
Government. Federal civilian agencies took
action to patch critical vulnerabilities, identify
high-value assets, tightly limit the number of
privileged users with access to authorized systems, and dramatically accelerate the use of
Personal Identity Verification cards or alternative forms of strong authentication for accessing
networks and systems. Since the Cybersecurity
Sprint, an intensive effort conducted in July 2015
to assess and improve the health of all Federal
assets and networks, both civilian and military,
Federal civilian agencies have nearly doubled

A GOVERNMENT OF THE FUTURE

their use of strong authentication for all users
from 42 percent to 81 percent.
Still, as outlined in the CSIP, challenges remain. The Federal Government has identified
three primary challenges:
•	 Outdated Technology.
The Federal
Government relies significantly on hardto-defend legacy hardware, software,
applications, and infrastructure, which
make it particularly vulnerable to malicious
cyber activity, as well as costly to defend
and protect.
•	 Fragmented Governance.
Governance
and management structures are unable to
consistently provide effective, well-coordinated cybersecurity across the Federal
Government.
•	 Workforce Gaps. Workforce shortages and
skill gaps, including training, education, and
recruitment and retention of cybersecurity
and privacy professionals, are significant.
To address these challenges and continue moving the needle on cybersecurity for the Federal
Government, the Budget invests over $19 billion,
or a roughly 35 percent increase from 2016, in
overall Federal resources for cybersecurity.
Enhancing Federal IT to Secure Federal
Information and Assets. The technology, architectures, and processes underpinning Federal
Government operations need to be modernized
to improve cybersecurity. Of the $52 billion in
Federal civilian IT spending planned for 2017,
approximately 71 percent ($37 billion) is dedicated to maintaining legacy IT investments.
Improving Federal cybersecurity will require an
accelerated push to strengthen the Government’s
most high-value IT and information assets and
to retire, replace, or upgrade hard-to-defend legacy IT. This will require not just modernizing
hardware and software, but also improving how
we manage the lifecycle of IT investments so
that security gains can be sustained over time.
This approach will improve the Government’s
risk management capability, improve the cyber-defense landscape, and enhance the ability

THE BUDGET FOR FISCAL YEAR 2017

to respond to changing threats. Therefore, the
Administration is proposing a revolving fund at
the General Services Administration (GSA), seeded with an initial capital injection of $3.1 billion,
to transition to new, more secure, efficient, modern IT systems, while also establishing long-term
mechanisms for Federal agencies to regularly
refresh their networks and systems based on upto-date technologies and best practices.
A project review board, comprised of experts
in IT acquisition, cybersecurity, and agile development, will review agency business cases and
select projects for funding to ensure prioritization of projects with the greatest risk profile,
Government-wide impact, and probability of
success. The board would identify opportunities
to replace multiple legacy systems with a smaller number of common platforms—something
that is difficult for agencies to do when acting
on their own with limited insight into other
agencies’ operations. As a result, the central
fund would achieve a far greater and more rapid
impact than if the funds were allocated directly
to agencies. In addition, a team of systems architects and developers would provide additional
oversight and development capabilities to make
these major changes. The revolving fund would
be self-sustaining by requiring agencies to repay the initial investments through efficiencies
gained from modernization, ensuring the fund
can continue to support projects well beyond the
initial infusion of capital. Seed funding of $3.1
billion would address an estimated $12 billion
worth of modernization projects over 10 years.
Finally, the Budget includes $275 million in
funding to accelerate implementation of the DHS
continuous diagnostics and monitoring program.
Streamlining Governance and Ensuring
Effective Oversight. Over the long term, the
Federal Government will need to move away
from a model of IT and cybersecurity governance
where individual departments and agencies
build, provision, and manage nearly all aspects
of their IT and cybersecurity, from infrastructure
to platforms to applications. Instead, IT systems
and cybersecurity capabilities will need to be

91
built, acquired, and managed in a more holistic
way, one that treats the Federal Government as
an enterprise and that relies more on shared
platforms and common services. This Budget
lays the foundation for shifting to this more
effective approach to Federal cybersecurity by
supporting investments in common IT solutions
for small agencies, more secure, enterprise-wide
e-mail systems, and common cybersecurity tools
and services. Further, the Federal Government
needs to improve not only its hardware and software, but how it acquires technology, so that it
can keep up to date with industry best practices
and emerging technologies in the future.
Today’s sophisticated cyber incidents have also
demonstrated the need for more coordinated and
nimble Government efforts when they occur. In
such instances, the Government may need to play
an important coordinating role. Moving forward,
the Budget supports the Federal Government’s
efforts to continue developing policy and plans
that establish a foundation for a scalable, flexible, and cooperative approach to significant cyber
incident coordination involving both public- and
private-sector stakeholders, and anchors it within the broader National Preparedness System.
In 2016 and 2017, the Administration, including OMB and NSC staff, will also coordinate with
DHS to continue working with agencies to identify and remediate weaknesses in cybersecurity
programs while ensuring agency progress toward
the Cybersecurity CAP Goal through CyberStat
reviews. These reviews provide the opportunity
for agencies to identify the cybersecurity areas
where they may be facing implementation and
organizational challenges.
Strengthening the Cybersecurity Workforce. There is a shortage of skilled cybersecurity
experts and privacy professionals throughout
the IT industry as a whole, and that shortage is
more acute within the Federal Government. The
Budget includes $62 million for three initiatives
to address this recruitment challenge by:
•	 Expanding the National Science Foundation’s
(NSF) CyberCorps® Scholarship for Service
program to establish a sustainable cadre

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A GOVERNMENT OF THE FUTURE
of cyber reservists and enhance opportunities for career cybersecurity experts across
departments and agencies that can serve
the Federal Government to help rapidly respond to cybersecurity challenges across the
Government;

•	 Developing a foundational cybersecurity
curriculum for academic institutions to consult and adopt; and
•	 Providing grants to academic institutions to
develop or expand cyber education programs
as part of the National Centers of Academic
Excellence in Cybersecurity Program.
In addition to funding these foundational
workforce initiatives, this Budget also invests
over $37 million to expand standing teams of
cybersecurity experts within DHS to provide
readily-available cybersecurity capabilities to
departments and agencies.
As malicious cyber activity becomes increasingly sophisticated and persistent in
the digital age, so must actions to tackle
them. Cyber threats cannot be eliminated
entirely, but they can be managed much more
effectively. Through these investments, the
Administration continues to lead a broad,
strategic effort to combat cyber threats, update and modernize Federal cybersecurity
policies and procedures, and strengthen the
Federal Government’s overall cybersecurity
infrastructure through modernization efforts.
To complement these steps and focus on longterm challenges in cybersecurity, the Budget also
supports the creation of the first Federal Chief
Information Security Officer, and the establishment of a blue ribbon commission consisting of
leaders in the fields of cybersecurity, technology,
privacy, national security, and Government that
will identify recommendations for the President,
future Administrations, and the Nation to enhance cybersecurity awareness and protections
inside and outside of Government and to empower Americans to take better control of their
digital security.

Delivering World-Class
Customer Service
The Administration is continuing its efforts to
improve the quality, timeliness, and effectiveness
of Federal services through three major customer service initiatives. First, the customer service
Community of Practice (COP) established in
2014 is developing standards, practices, and
self-assessment tools for agencies to use on
how to better serve the American people. For
example, the COP has developed a draft assessment framework for programs to use to identify
strengths and weaknesses in their existing customer service that will be piloted in 2016.
Second, the Federal Customer Service Awards
program recognizes individuals and teams who
provide outstanding customer service directly
to the American people and identifies effective
practices that can be replicated within and
across agencies. The inaugural awards, announced in December 2014 by the President and
awarded in December 2015, exemplify how the
Federal Government delivers excellent service
to its customers—the public. For example, the
BusinessUSA Veteran Entrepreneur Initiative
streamlined a complicated process to provide
veterans with easier access to resources on how
to start a new business. Since its launch, the
Veteran Entrepreneur Initiative has served over
250,000 veterans and increased the number of
first-time veteran users to the BusinessUSA
website from 558 to 53,993 users. A second
awardee, the Department of State consular team
serving in Dhahran, Saudi Arabia, used social
media, technology, and innovative strategies to
deliver a range of consular services to U.S. citizens without requiring a visit to the Consulate.
This saved time and money for American citizens
leading to high customer service ratings for the
consular team.
Through a third customer service initiative,
the Administration increased opportunities for
the collection and use of customer feedback data,
which are critical to helping the Government better respond to the needs of the public and improve
overall service delivery. In August of 2015, GSA
launched the pilot of FeedbackUSA, a simple tool

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THE BUDGET FOR FISCAL YEAR 2017

that uses kiosks located in local Federal offices—such as passport offices and Social Security
Administration (SSA) card centers—to allow
customers to rate their experience. Customers
can also provide more detailed feedback using
the FeedbackUSA web portal. Federal agencies
can use FeedbackUSA to solicit, aggregate, and
analyze customer service transactional feedback
in real time so that they can resolve issues and
improve their services to the public. The pilot
was launched in 27 Department of State passport
processing centers and at 14 SSA card centers.
The Transportation Security Administration is
set to join in the spring of 2016.
FeedbackUSA has achieved high initial response rates and levels of satisfaction, and
agencies are able to use the data collected to conduct meaningful analysis and take immediate
action. Going forward, the Administration will
continue to build and expand on this progress
by improving the collection and use of customer
feedback data across Government programs that
provide services to the public in order to make
tangible improvements in customer interactions.
The Budget supports continued investments in improving the quality of service the
public receives when they interact with their
Government. For example, the Budget includes
an increase of more than $100 million, or eight
percent, for IRS services to taxpayers, including
for critical activities to improve and modernize
its public-facing IT infrastructure. Although the
2016 Consolidated Appropriations Act reversed
a five-year trend of irresponsible cuts to the IRS
budget—which threatened the integrity of the
tax system and resulted in unacceptable levels
of taxpayer services—the IRS operating budget is still almost $1 billion below 2010 levels,
even before accounting for inflation, and more
resources are needed to achieve satisfactory levels of customer service. The 2017 investments
in the Budget would enable the IRS to provide
taxpayers with the same level of online service
as they have come to expect from their financial
institutions, and would return IRS telephone
service levels to acceptable levels, reducing the
average wait time for taxpayers who call the IRS

by half compared with 2015, and nearly doubling
the share of callers that reach a live assister. The
Budget also supports the SSA’s field operations
and provides the funding necessary to reduce
the disability hearing backlog, as well as ensure
timely assistance to the public who call the SSA
help line. SSA is continuing to improve on-line
customer service with the addition of new services to the “my Social Security” portal including
click-to-chat, secure messaging, and online Social
Security replacement cards. Each year, more
than six million customers sign up for eServices
and SSA conducts 87 million transactions online.
At the same time, the Budget provides funding
to ensure that SSA can provide high-quality
face-to-face and phone services to individuals
who need or prefer them. SSA serves over 40
million customers in person at 1,200 field offices
nationwide each year. According to the Foresee
e-Government 2015 Report Card, five of the top
10 ranked Federal websites were SSA online
customer service products.

Reshaping the Way Government
Engages with Citizens
and Communities
Too often in the past, the Federal Government
has taken a “one-size-fits-all” approach to
working with local communities, ignoring the
unique challenges and resources of each place.
Such an approach fails to fully leverage local
knowledge and leadership in maximizing the
impact of Federal resources and Federal-local
collaboration. Addressing entrenched poverty
or improving resilience in the face of climate
change requires cross-sector solutions that bring
together different agencies and different assets
from local, State, Federal, public and private
stakeholders.
From day one, the President called on the
Federal Government to disrupt this outdated, top-down approach, and to think creatively
about how to make our efforts more user-friendly and responsive to the ideas and concerns of
local citizens. This new approach is simple.
First, we partner with communities by seeking
out their plans or vision. Second, we take a

94
one-government approach that crosses agency
and program silos to support communities in implementing their plans for improvement. Lastly,
we focus on what works, relying on evidence and
using data to measure success and monitor progress, fostering communities of practice to share
and build on local innovations.
As a result, the collaborative initiatives
launched in the last six years have led to progress on numerous challenges facing America’s
communities. From sparking economic growth,
to building ladders of opportunity, to combating climate change, initiatives such as Promise
Zones, Investing in Manufacturing Communities
Partnership, Partnership for Sustainable
Communities, and Performance Partnership
Pilots for Disconnected Youth (P3) have supported holistic responses to pressing issues. Today
over 1,800 communities nationwide—including cities, towns, counties, and regions—are
implementing place-based initiatives that support their integrated goals by busting through
Federal silos to promote outcomes that draw on
resources across agencies and rely on close coordination with local businesses, philanthropy, and
Government.
The place-based approach also improves support for the innovative work happening in State
and local government. For example, P3 gives
State, local, and tribal governments an opportunity to test innovative new strategies to improve
outcomes for disconnected youth ages 14 to
24, including youth who are low-income and
in foster care, homeless, young parents, those
involved in the justice system, unemployed, or
who have dropped out, or are at risk of dropping
out of school. A first round of nine pilots was
launched in fall 2015. In 2016, P3 will expand
to allow communities to take existing dollars
that they already receive from seven different
Federal agencies, propose better ways to improve
outcomes for disconnected youth, and obtain
flexibility from existing rules to move forward.
In exchange for this flexibility, pilot communities
agree to be accountable for concrete outcomes
related to education, employment, and other
key areas. The Budget supports a fourth round

A GOVERNMENT OF THE FUTURE

of Performance Partnership Pilots that allows
communities to draw on existing resources from
across the Departments of Education, Labor,
Health and Human Services (HHS), Justice, and
Housing and Urban Development (HUD), as well
as the Corporation for National and Community
Service and the Institute for Museum and
Library Services.
Many place-based initiatives add capacity for
and deepen community engagement. These initiatives draw on new tools and methods through
partnerships with local civic technology groups,
as well as technology and data resources provided by the Federal Government. They recognize
that building local capacity is more effective
when we use all the tools available to us and that
open, high-value data help communities make
data-driven decisions, engage residents in new
ways, and build trust. For example, after the New
Orleans Police Department released 911 calls for
service as its first open data set, the Department
stepped forward in 2015 as a founding member of the White House Police Data Initiative,
committing to opening even more data on policing. Inspired by the White House TechHire
initiative, a multi-sector, community-based effort to increase access to high-paying tech jobs
by empowering Americans with the skills they
need, New Orleans partnered with a local code
academy to teach software development skills
to youth from low-opportunity neighborhoods.
At an event with the New Orleans Police Chief,
participating youth built prototype software on
open policing data. The success of this initiative
has inspired other cities from Indianapolis to
Orlando to follow suit with their own local institutions, advocacy groups, and tech communities.
The 2017 Budget continues to institutionalize
the Administration’s place-based approach to
coordinating programs that help create jobs and
opportunity, promote resilience and sustainability, and implement local visions in communities
across the Nation. At the Federal level, the success of this approach relies on both the staff with
the skills and mandate to directly partner with
communities as well as programs that provide
direct funding and support to communities. In

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THE BUDGET FOR FISCAL YEAR 2017

addition to investments in Federal staffing and
training, the Budget supports key programs such
as Choice Neighborhoods at HUD and Promise
Neighborhoods at the Department of Education,
providing increased funding for distressed communities to plan and implement comprehensive
and community-driven approaches. As another
example, the Budget helps communities adapt to
the changing energy landscape and build a bet-

ter future through the POWER Plus (POWER+)
Plan. The POWER+ Plan invests in workers and
jobs, addresses important legacy costs in coal
country, and drives development of coal Carbon
Capture and Storage (CCS) technology. Together,
these investments and others equip the Federal
Government to partner with communities and
empower them to meet local needs in an efficient,
effective, and integrated manner.

EFFICIENCY: INCREASING QUALITY AND VALUE IN CORE OPERATIONS
Over the years, duplicative administrative
functions and back-office services have made the
Government less effective and wasted taxpayer
dollars. To address this issue, the President has
focused on improving Government efficiency to
maximize the value of Federal spending. For
example, over a two-year period the Federal
Government has reduced its domestic office and
warehouse inventory by 21.4 million square
feet. In an effort to reduce duplication of core
administrative services, such as payroll, across
Government agencies, large departments are
also moving toward the use of shared services.
For example, HUD has transitioned many of
its core financial management functions to the
Department of the Treasury (Treasury). In addition, in 2015, the Administration announced the
launch of Category Management Governmentwide, which enables the Government to save
money by making purchases for common sets of
goods and services as a single buyer.

mon administrative functions that all agencies
need, but some agencies are better equipped to
effectively manage them. By creating Shared
Service Providers (SSPs), and concentrating
the delivery of administrative services within a
smaller number of agencies, we can reduce duplicative efforts. Further, by giving this task to
agencies with the right expertise, we can unlock
competition between agencies, free up resources for mission critical activities, and deliver
cost-effective support to agencies.

Expanding Shared Services to
Increase Quality and Savings

The use of shared services has grown in recent
years, with smaller agencies leading the charge.
For example, the Securities and Exchange
Commission and the Consumer Product Safety
Commission both utilize shared service providers
for multiple administrative functions. In 2015,
cabinet-level agencies took steps to realize the
benefit of shared service agreements. As noted
above, HUD successfully transitioned many of its
core financial management functions, as well as
select administrative and human-resource functions, to Treasury—the Federal Government’s
largest financial management shared service
arrangement to date. This transition will enable HUD to focus its workforce on serving the
Nation’s housing and community development
needs. Other cabinet-level agencies, including
the Department of Labor (DOL) and DHS, will
soon follow, resulting in increased economies of
scale for shared service providers.

Most Federal agencies have similar administrative functions. Human resources, financial
management, and payroll, for example, are com-

With this increasing shift toward using SSPs,
the Administration is taking steps to better manage this emerging practice. In the past, shared

The Budget invests in concentrating the delivery of administrative functions through shared
services, simplifying Federal contracting, continued benchmarking to drive data-driven Federal
management, implementing new transparency
efforts, and shrinking the Federal real property
footprint.

96
services were managed independently by various
lines-of-business, such as financial management
or human resources, resulting in inconsistent
implementation across agencies. While each
function operates in a unique environment with
specific requirements and challenges, all lines of
business would benefit from closer coordination
and collaboration, supported by a more robust
cross-functional governance model. To support
an enterprise-wide approach to shared services,
in October 2015 the Administration established a
cross-function management and oversight structure comprised of an interagency Shared Services
Governance Board (SSGB) and a Unified Shared
Services Management (USSM) office within
GSA. Led by the SSGB and USSM, stakeholders
from across the Government will work together
to manage and oversee mission-support shared
services with an initial scope of acquisitions, financial management, human resources, travel
and information technology. The Budget proposes $5 million to staff the USSM office to oversee
SSPs and facilitate agency transitions to these
more cost-effective services.

Buying as One through
Category Management
The Federal Government is the single largest buyer in the world with annual spending
on goods and services close to $450 billion.
However, because agencies often purchase
goods and services individually, the Federal
Government is not able to fully leverage its size
as a customer to save money. For this reason, in
2015, the Administration announced the launch
of Category Management Government-wide.
Category Management, an approach used extensively by the industry and other governments,
enables the Federal Government to act more
like the single enterprise it is. For example, just
one month after OMB issued a new Category
Management policy on laptops and desktops
that prohibits contract duplication and drives
agencies to standardize configurations, several
vendors dropped their prices for these configurations by 50 percent. With the Federal Government
spending $1.1 billion each year on these products

A GOVERNMENT OF THE FUTURE

alone, the potential savings from this policy are
large. To further support Category Management
and the FITARA, GSA recently negotiated better
prices, terms, and conditions for common geospatial software, and awarded a Government-wide
agreement for common application development
services. This agreement will allow agencies to
share and reuse developed applications, code,
and best practices, which could save between 50
and 80 percent on application development costs.
Through reinforcement of this management
best practice, the Budget better leverages buying
power, which leads to increased savings, more
consistent practices across agencies, reduced
duplication, and improved performance for the
American taxpayers. The Administration is
driving the adoption of Category Management
through the implementation of a Category
Management CAP Goal, which focuses on five
areas: hardware; software; telecommunications; IT security; and IT professional services.
The Federal Government spends over $50
billion per year on purchases in these areas
alone. Implementation of this CAP Goal will
save the Federal Government money, reduce
duplication, increase the use of best-in-class
solutions, and adopt Category Management
principles. Specifically, by the end of 2019, the
Administration aims to save at least $10.5 billion
on IT in the areas of hardware, software, telecommunications, and outsourcing; and half of all
IT spending should be under Government-wide
management where agencies utilize best-inclass Government-wide solutions and adopt
Category Management principles. Furthermore,
through the implementation of the Category
Management policy, described above, that prohibits the award of new contracts, mandates
use of standard configurations, and implements
demand management strategies for laptop and
desktop purchases, the Administration aims to
reduce the number of new and renewed contracts
and cut administrative costs by 30 percent by the
end of 2019. In the $1 billion laptop and desktop
Federal market, 75 percent of spending should
move through best-in-class acquisition solutions
by 2019, an increase from 39 percent today.

THE BUDGET FOR FISCAL YEAR 2017

The supporting backbone of Category
Management is the Acquisition Gateway, a new
online tool for the Federal acquisition workforce
that contains key contract information and tools
by categories of purchasing. Using this tool, over
5,000 Federal project managers, contracting
specialists, and program officials are now able to
search and compare existing contracts and prices paid under those contracts across hundreds of
contracts and products. Sharing this information leverages Government purchasing power,
reduces contract duplication, and streamlines
delivery of goods and services in support of mission needs. Furthermore, businesses will spend
less time responding to duplicate procurements
and Federal program officials will have more
time to concentrate on managing results.

Shrinking the Federal Real
Property Footprint
The Federal Government is the largest property owner in the United States. The domestic
building inventory contains almost 300,000
buildings requiring approximately $21 billion
of annual operation and maintenance expenditures, including approximately $6.8 billion of
annual lease costs. As a result, there are numerous opportunities to save by using Federal space
more efficiently and disposing of unneeded buildings, land, and structures. The Administration
has made significant progress on real property.
In 2012, the Administration issued a “Freeze
the Footprint” policy, which directed agencies
to freeze the growth in their office and warehouse real estate inventory. While it only called
for zero footprint growth, Freeze the Footprint
policy actually led to a 10.2 million square foot
reduction by the end of 2013. Also, by the end
of 2014 the cumulative reduction reached 21.4
million square feet.
In March 2015, the Administration issued the
National Strategy for the Efficient Use of Real
Property (National Strategy) and its companion
policy—the Reduce the Footprint (RTF) policy.
Building on the Freeze the Footprint policy and
agencies’ successes in beginning to reduce their
real property holdings, the five-year National

97
Strategy’s primary objective is to formally adopt
Government-wide requirements to reduce the
size of the Government’s domestic real property portfolio through efficiency improvement
and property disposal. The RTF policy requires
agencies to set annual reduction targets for office
and warehouse space and annual disposal targets for all building types to improve efficiency
and reduce costs. For the first time, the RTF
policy requires that agencies reduce the size of
their real property portfolios to improve program
efficiency, and agencies have developed and finalized their first ever five-year RTF reduction
plans to implement the policy. The agencies’ RTF
plans target an aggregate reduction of 60 million
square feet between 2016 and 2020. Agencies
will update their RTF plans and annual reduction targets annually with the goal of increasing
the magnitude of targeted reductions over time.
The Budget supports further efficiency improvement by providing funds for real property
consolidation projects.
To support more ambitious reduction targets,
GSA and OMB have developed a new management tool within the Federal Real Property
Profile (FRPP) database that enables agencies
to fully analyze their portfolios. The new management tool uses the real property performance
metrics developed through the President’s
Management Agenda to measure the performance of agencies’ portfolios and thereby identify
and prioritize efficiency opportunities. The management tool, combined with FRPP’s data quality
improvements, will enhance agencies’ ability to
implement data-driven decision making to develop their annual RTF reduction targets. Focusing
policy on reducing the portfolio, improving the
quality of FRPP data through mandatory data
validation and verification procedures, and the
broad use of the new FRPP management tool
will support higher RTF square foot reduction
targets and efficiency gains in future years.
The Administration has fully deployed its
administrative authority to reform real property management as evidenced by the National
Strategy, its real property policies, and funding requests for the Consolidation Activities

98
program. Achieving further progress on real
property reform requires additional legislative
authority, which should embody the core principles that framed the Administration’s Civilian
Property Realignment Act legislative proposal.
These core principles include the creation of an
independent Board to make real property disposition recommendations in the best interest
of the Government, a Government-wide sale
proceeds retention and reinvestment account,
agency proceeds retention, and legislative relief from current program requirements. The
Administration’s proposal of another round of
DOD Base Realignment and Closure (BRAC)
to reduce unneeded facilities demonstrates its
commitment to working with the Congress to
develop authorities using these core principles
that both improve the efficiency of Governmentwide real property portfolio and reduce costs.
(See Chapter 4 for more on the Budget’s BRAC
proposal.)

Benchmarking Agencies
Over the course of this Administration, we
have used regular data-driven reviews—such as
PortfolioStat and AqStat—to advance management priorities. Building on these efforts, in 2014
the Administration launched the Benchmarking
initiative by establishing cost and quality benchmarks for core administrative operations across
agencies to measure performance in key mission-support areas, including human resources,
financial management, acquisition, IT, and real
property. This initiative allows agencies to see
how their bureaus compare against each other, how they perform peer-to-peer, and their
individual agency impacts on Government-wide
averages.
In 2015, OMB, in conjunction with GSA,
launched the “FedStat” review with major agencies to have a holistic, data-driven discussion
across all mission-support and mission-delivery areas. As part of this initiative, OMB met
with agencies to identify potential areas for improvement, discuss shared challenges across the
Government, and explore opportunities to pur-

A GOVERNMENT OF THE FUTURE

sue cross-agency solutions—including policies,
processes, and leading practices of excellence
for broader application across program administration and management. These data-driven
reviews led to a number of tangible improvements—such as how agencies may benefit from
shared services or strategies for addressing common hiring and recruitment challenges—that
can improve the effectiveness and efficiency of
individual agencies and the Government as a
whole.

Reforming Federal Background
Investigations
The Federal Government is responsible for
issuing, handling, and storing much of America’s
most important data. The Government also
performs key functions with these data, such
as conducting background investigations to assess whether individuals may serve as Federal
employees, members of the Armed Forces, or
contractors, be granted access to its facilities and
information systems, and be trusted with classified and other sensitive information. As the
world’s technologies continue to evolve and the
economy becomes ever more digitally connected,
the Federal Government’s tools, systems, and
processes for managing such sensitive information and conducting background investigations
must keep pace with these advancements. This
is necessary in order to better anticipate, detect, and counter malicious activities, as well
as threats posed by trusted insiders, who may
seek to do harm to the Government’s personnel,
property, and information systems.
Last year, in light of increasing cybersecurity threats, including the compromise of
information housed at OPM, the Administration
initiated a 90-Day Suitability and Security
review to re-examine reforms to the Federal
background investigations process, assess
additional enhancements to further secure information networks and systems, and determine
improvements that could be made to the way the
Government conducts background investigations
for suitability, security, and credentialing.

THE BUDGET FOR FISCAL YEAR 2017

This review was conducted by the interagency
Performance Accountability Council (PAC),
which is chaired by OMB and comprised of the
Director of National Intelligence, the Director
of OPM, in their respective roles as Security
and Suitability Executive Agents of the PAC,
and the Departments of Defense, the Treasury,
Homeland Security, State, Justice, Energy, the
Federal Bureau of Investigation, and others. It
also included consultation with outside experts.
The review resulted in a series of actions to
modernize and strengthen the way the Federal
Government conducts background investigations
for Federal employees, members of the Armed
services, and contractors, and protects sensitive
data. These changes include the establishment of
the National Background Investigations Bureau
(NBIB), which will absorb OPM’s existing Federal
Investigative Services, and be headquartered in
Washington, D.C. This new Government-wide
service provider for background investigations
will be housed within OPM. Its mission will be to
provide effective, efficient, and secure background
investigations for the Federal Government. Unlike
the previous structure, DOD will assume the responsibility for the design, development, security,
and operation of the background investigations IT
systems for the NBIB. To support this work, the
Budget includes $95 million in additional resources
that will be dedicated to the development of these
IT capabilities.
While these changes will take time to fully
implement, the Administration has taken and
will continue to take immediate action to move
forward with strengthening the background investigations process. These include building on
the security measures implemented in response
to the calendar year 2015 OPM cyber incidents,
the establishment of a NBIB transition team,
and a focus on driving continuous performance
improvements to address evolving threats.
These changes build upon the Administration’s
efforts to improve how the Federal Government
performs security clearance determinations, and
protect the safety of American citizens and of our
Nation’s most sensitive information and facilities.

99
Modernizing Infrastructure Permitting
Building a 21st Century infrastructure in a way
that safeguards communities and the environment is a key component of the President’s efforts
to strengthen the economy and create new jobs.
Over the last several years, the Administration
has taken action to cut project review timelines
for major infrastructure projects, while improving environmental and community outcomes.
In 2016, the Administration will work aggressively to implement the permitting provisions
included in the recently enacted Fixing America’s
Surface Transportation Act, many of which align
with ongoing Administration efforts. Among other things, the law establishes a new interagency
governance structure to oversee the timely processing of permits and reviews; enables agencies
to recover reasonable costs for such activities;
and standardizes processes for resolving disputes. Implemented effectively, these reforms
will facilitate more efficient, effective, and timely
Federal permitting decisions.
Consistent with guidance issued from OMB
and the Council for Environmental Quality in
2015, the law requires expanded use of an online
dashboard to track major infrastructure projects
under Federal review. Use of the Dashboard will
improve agencies’ communication with project
sponsors, enhance interagency coordination, and
increase the transparency and accountability of
the permitting process.
Furthermore, the law outlines a comprehensive set of procedures that standardize
Federal permitting and review processes for
major infrastructure projects, such as requiring development of coordinated project plans
to include a discussion of potential avoidance,
minimization, and mitigation strategies. To this
end, in November 2015, the President issued a
memorandum to ensure that Federal mitigation
policies are clear, work similarly across agencies,
and are implemented consistently. By encouraging agencies to share and adopt a common set
of best practices to mitigate harmful impacts to
natural resources, the Federal Government can
create a regulatory environment that allows us

100
to build the economy faster and better while protecting healthy ecosystems that benefit this and
future generations.

Increasing Federal Spending
Transparency
On May 9, 2014, the President signed the
Digital Accountability and Transparency Act
(DATA Act), setting forth a new commitment to
expand Federal spending transparency. When
fully implemented, taxpayers will be able to
access, search, and download Federal spending
data on a publicly available website. This data
includes obligations, outlays, unobligated balances, and other budgetary resources for each
appropriations account. Taxpayers will also
have access to more information about Federal
awards as they will be linked with financial data
for the first time. With increased access to this
data, the public will see where, how, and on what
their Government spends their tax dollars.
This level of Federal spending transparency is
unprecedented and requires collaboration among
the Federal and public stakeholders. OMB and
Treasury are the lead agencies for Governmentwide implementation of the DATA Act. During
the first year of implementation, OMB and
Treasury met the statutory deadline for finalizing financial data standards, in addition to
data definition standards specific to procurement, and financial assistance award reporting
under the Federal Funding Accountability and
Transparency Act. Policy guidance was also
issued to direct agencies on implementing the
DATA Act and, in particular, the data standards
by Federal agencies. Complementing these efforts, Treasury also re-launched USAspending.
gov on a more stable and user-friendly platform. To drive these improvements and provide
greater transparency in Federal spending, OMB
and Treasury have leveraged real-time tools to
gather feedback from the public, such as using
GitHub in the development of the recent data
standards. In 2017, OMB and Treasury will
continue their work with Federal agencies to implement the USAspending.gov data standards.
Further, Treasury will complete its efforts to not

A GOVERNMENT OF THE FUTURE

only redesign the current USAspending.gov to
meet DATA Act publication needs, but ensure
that reported financial and award data is publicly available and accurately represented on
USAspending.gov (or its successor site) by May
2017.
The Budget invests in the ongoing work to implement the DATA Act’s data standards across
Federal agencies by the statutory deadline of
May 2017. In particular, the Budget includes
$15 million to support Treasury’s Governmentwide implementation efforts, including building
a DATA Act-compliant USAspending.gov, and
$9 million to fund the work of Federal SSPs
to streamline implementation among several
large and small agencies. With this funding,
the Government will sustain its momentum on
increasing Federal spending transparency.

Reducing the Administrative
Reporting Burden for Federal
Contractors and Grantees
In addition to expanding transparency, the
DATA Act required a two-year pilot program on
reducing the administrative reporting burden
on grant recipients and contractors. OMB began the pilot in May 2015 with the release of a
National Dialogue to solicit ideas from the public
on their reporting burden and is collaborating
with agencies and the grants and procurement
communities to identify ways to reduce duplication, redundancy, and unnecessary costs in
Federal reporting requirements. The dialogue
is generating ideas that can be further explored
for streamlined reporting and recommendations
for Federal contractors and Federal grantees.
OMB will complete its DATA Act pilot work in
May 2017 and present its recommendations by
August 2017.
While Federal awarding and reporting processes have similarities, there are unique burdens
that could possibly be reduced. To accommodate
those award-specific areas, two tracks are underway for Federal procurement and Federal grants.
OMB has engaged HHS to be the executing agent
of the grants-specific portion of the pilot. As the

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THE BUDGET FOR FISCAL YEAR 2017

largest grant-issuing agency and owner of Grants.
gov and the Payment Management System, HHS
is uniquely positioned to provide tactical leadership and execution of grants-specific pilot efforts.
OMB is leading the procurement-specific areas
of the pilot with collaboration from GSA and the
Chief Acquisition Officers Council.

In support of these pilot activities, the Budget
provides necessary funding to complete testing of
potential solutions to reduce grant and procurement related reporting burden, and supports the
Administration’s broad goals to maximize the
impact of every taxpayer dollar.

ECONOMIC GROWTH: OPENING GOVERNMENT-FUNDED DATA AND RESEARCH
TO THE PUBLIC TO SPUR INNOVATION, ENTREPRENEURSHIP, AND JOB GROWTH
The Budget continues to invest in efforts to
open up Government-generated assets, including
data and the results of federally funded research
and development (R&D)—such as intellectual property and scientific knowledge—to the
public. Through these efforts, the Government
empowers citizens and businesses to increase
the return on our investment with innovation,
job creation, and economic prosperity gained
through their use of open Government data and
research results. The use of this data and scientific knowledge has impacted the private sector,
including fueling innovative start-up companies
and creating American jobs, increasing the transparency of retirement plans, helping consumers
uncover fraudulent charges on their credit card
bills, assisting potential homebuyers in making
informed housing decisions, and creating new
life-changing technologies, such as leading-edge
vaccines.

facility accessibility scores, helping local leaders
and entrepreneurs find free meeting spaces, and
aiding food truck vendors find urban areas with
the highest social media activity. By the close
of calendar year 2015, Data.gov featured over
188,000 datasets on topics such as education,
public safety, health care, energy, and agriculture.
To help assist agencies in their open data efforts
and to support the Federal open data ecosystem,
the Administration has built additional resources such as Project Open Data, which provides
agencies with tools and best practices to make
their data publicly available, and the Project
Open Data Dashboard, which is used to provide
the public a quarterly evaluation of agency open
data progress. Eight Federal agencies co-hosted
open data roundtables that connected agencies
with the organizations that use their data to
help identify high-value datasets and establish
open data priorities.

Opening Data to Spark Innovation

Fueling the Economy by Bridging
the Barriers from Lab-to-Market

The Administration continues to make progress toward its open data commitment and data
governance. The data the Government collects
has proven valuable well beyond the original
purposes for which it was collected. For example, the U.S. Census Bureau, which collects data
from citizens and businesses through surveys
and other voluntary means, continues to encourage community innovators to create web tools
and mobile applications by connecting local and
national public data in one location and hosting
challenges for their use. These challenges have
led to a host of civic solutions including an application that helps people with disabilities find

The Budget invests $152 billion in R&D across
Government in 2017, as discussed in Chapter 2.
The Federal Government’s investment in R&D
has produced extraordinary long-term economic
impact over the decades, through the creation of
new knowledge, new jobs, and new industries.
The Federal R&D enterprise will continue to
support fundamental research that is motivated
primarily by the interest in expanding the frontiers of human knowledge, and will continue to
diffuse this knowledge through open data and
publications. At the same time, there remains
significant potential to increase the public’s

102

A GOVERNMENT OF THE FUTURE

return on this investment through effective
partnerships with academia, industry, and regional innovation networks. For example, the
National Aeronautics and Space Administration
has partnered with companies to make experimentation on the International Space Station
more accessible to researchers, an approach that
has played a significant role in jump-starting
a new industry in very small satellites. In the
case of the Department of Energy, industry partnerships can help broadly develop and deploy
important next generation energy technologies
and high-performance computers.
The Budget reflects the Administration’s commitment to accelerating the transfer of the results
of federally funded research to the commercial
marketplace by prioritizing funding for Lab-toMarket programs at the National Institute of
Standards and Technology ($8 million) and for
NSF’s public-private Innovation Corps (I-Corps)
program ($30 million). Both of these programs
are developing tools and best practices that
are invigorating efforts to commercialize the

results of federally funded R&D. For example,
the I-Corps program at NSF has 10 agreements
with other Federal agencies that are using its
experiential entrepreneurial curriculum to train
research scientists, graduate students, and other
entrepreneurs in how to identify and mature discoveries ripe for commercialization. In addition,
I-Corps has a growing number of partnerships
with non-Federal entities, such as with the State
of Ohio. The Budget also provides $50 million
in mandatory funding for a new competitive
grant program, building on the success of prior Economic Development Administration-led
activities, to incentivize partnerships between
Federal labs, academia, and regional economic
development organizations to enable the transfer of knowledge and technologies from labs to
private industry for commercialization. In addition, the Department of Energy is making the
technologies and tools developed by its national labs more available to small businesses and
entrepreneurs through innovative approaches
designed to unlock new business or productive
opportunities.

PEOPLE AND CULTURE: UNLOCKING THE FULL POTENTIAL
OF TODAY’S FEDERAL WORKFORCE AND BUILDING THE
WORKFORCE WE NEED FOR TOMORROW
In his December 2014 address to Federal Senior
Executives, President Obama said,“[W]e need
the best and brightest of the coming generations
to serve. [T]hose of us who believe government
can and must be a force for good…we’ve got
to work hard to make sure that government
works.” Through the Management Agenda’s focus on People and Culture, the Administration
is committed to undertaking executive actions to
attract and retain the best talent for the Federal
workforce and foster a culture of excellence. The
Budget supports efforts to strengthen the Senior
Executive Service (SES) and improve employee
engagement in order to fully capitalize on the
talents in today’s Federal workforce at all levels,
and recruit and develop the talent needed to continue moving the Federal Government forward
in the 21st Century.

White House Advisory Group
The White House Advisory Group on Senior
Executive Service Reform, comprised of 24 leaders from across the Federal Government, was
announced in December 2014 and charged with
making recommendations for improving the way
the Federal Government recruits, hires, develops, retains, manages, and holds accountable,
top senior career leaders. The final reforms focus
on three key areas: 1) hiring the best talent; 2)
strengthening SES development; and 3) improving SES accountability, recognition, and rewards.
On December 15, 2015, the President signed
an Executive Order titled “Strengthening the
Senior Executive Service” that included reforms
to improve the hiring and selection processes
and increase rotations to broaden experience and
succession planning. In addition, the President’s
Management Council formed a subcommittee to

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THE BUDGET FOR FISCAL YEAR 2017

oversee the implementation, and OPM and OMB
will undertake a set of additional administrative
actions.

The White House Leadership
Development Fellows
Announced by the President in December
2014, the Administration launched the White
House Leadership Development Program.
Through this program, GS-15 (and equivalent)
emerging leaders participate in rotational assignments to drive progress on CAP Goals and
lead change across Departments and programs.
Agencies nominated dozens of their top-performing employees, who then were assessed by
panels comprised of existing executives across
Government. The initial class of 17 Fellows
entered the program in October 2015, and are
now working on cross-agency priorities such as
shared service centers, climate change, and human capital. Participants in the program will
gain valuable experience by playing a key role
in addressing critical management challenges
facing the Federal Government and will build
networks and best practices to bring back to their
agencies. Many of the Fellows will be prepared
to join the SES upon completing the program.

Hiring Excellence
The Hiring Excellence Initiative of the People
and Culture CAP Goal is designed to enable
agencies to hire the best talent from all backgrounds. In 2015, the Administration worked
with agencies to understand their hiring challenges through the annual FedStat process while
deploying OPM policy experts to provide sessions to identify and solve agency-based policy

barriers to successful Federal hiring. An interagency team consisting of OMB, the Presidential
Personnel Office, and OPM also developed the
Hiring Excellence Campaign, which will launch
in calendar year 2016 as an educational outreach vehicle to enable agencies to attract highly
qualified and diverse talent through engaged
and empowered hiring managers, supported by
highly skilled human resources staff. The team
will also partner with the Office of the Federal
CIO, DHS, and others on specific Cybersecurity
Workforce initiatives as outlined in the 2015
Cybersecurity Implementation Plan.

Employee Engagement
In both the private and public sector, an
employee’s investment in the mission of their organization is closely related to the organization’s
overall performance. Engaged employees display greater dedication, persistence, and effort
in their work, and better serve their customers—whether they are consumers or taxpayers.
This makes employee engagement a critical
performance measurement for Federal agencies.
Starting in 2014, the Administration embarked
on a campaign to improve employee engagement.
Each agency named a senior level official to be
accountable for determining the best method for
improving employee engagement within their
specific organizational culture. A team from
OMB and OPM met with all 24 Chief Human
Capital Officers Act agencies and hosted four
conferences at the White House. As a result
of these efforts, after years of steady declines,
for the first time in the history of the survey
the 2015 Federal Employee Viewpoint Survey
showed either improvement or holding steady on
all questions.

MEASURING RESULTS: SETTING GOALS AND TRACKING PERFORMANCE

Improving Performance
and Accountability
Too often, multiple agencies work in isolation from one another to tackle a challenge,
rather than delivering an integrated response

that better addresses the problem.
The
Administration uses CAP Goals to overcome
this mismatch, helping break down organizational barriers to achieve better performance
and results than one agency can achieve on its
own.

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A GOVERNMENT OF THE FUTURE

For example, DOD and the Department of
Veterans Affairs (VA) have partnered to improve
veterans mental health. Through this collaboration, last year over 11,000 individuals participated
in 144 VA medical center-hosted Mental Health
Summits across the Nation in order to identify
unmet needs and increase awareness of community-based programs and services for organizations
supporting veterans and their families. Newly
available data also shows that, for those servicemembers completing a Post-Deployment Health
Reassessment in 2013, who screened positive for
posttraumatic stress disorder (PTSD), depression,
or alcohol abuse and received a referral to mental
health specialty, or behavioral health in primary
care, 55 percent received care at VAs or DOD (2013),
up from 46 percent in 2011, and nearing the target
of 56 percent by 2016.

While there has been impressive progress
made on CAP Goal priorities, from improving citizen interactions with Federal agencies—through
the launch of the Feedback USA customer experience initiative within the Customer Service
CAP Goal, to the establishment of the first-ever
Government-wide shared services management
and oversight operation model by the Shared
Services CAP Goal team—overall performance
delivery across agency boundaries remains a
challenge, and in many cases significant management improvements require investments that
cut across agencies and budget accounts. The
Budget continues the enacted 2016 authority for
the OMB Director, with prior notification to the
Congress, to transfer up to $15 million to support
these crosscutting management initiatives rather than handling them on a case-by-case basis.

Agencies have also used the Priority Goal process to drive performance improvements. For
example, HUD and VA have reduced the total
number of homeless veterans; the Department of
Justice has improved the protection of the most
vulnerable within society, including victims and
survivors of human trafficking, and the Small
Business Administration has helped increase
small business access to capital by adding new
lenders to its flagship lending program.

More details about the Federal Government’s
specific performance framework can be found
on Performance.gov and in the Analytical
Perspectives volume of the Budget.
The
Government can, and should, be more effective
and efficient, and this authority provides a powerful tool to turn management reform ideas into
real and lasting results for the American people.

USING EVIDENCE AND EVALUATION TO DRIVE INNOVATION AND OUTCOMES
The President has made clear that policy decisions should be driven by evidence—evidence
about what works and what does not, and evidence that identifies the greatest needs and
opportunities to solve great challenges. Over
the past seven years there has been growing
momentum for evidence-based approaches at
all levels of government, as well as among nonprofits, foundations, faith-based institutions,
and community-based organizations. In addition, Members of Congress from both parties,
visionary governors and State legislatures,
action-oriented mayors, and the non-profit and
research communities are promoting greater
use of data and research in policymaking and
program management.

As discussed in prior chapters, the
Administration’s embrace of this approach has
resulted in important gains in areas ranging
from reducing veteran homelessness, to improving educational outcomes, to enhancing
the effectiveness of international development programs. In addition to continuing and
expanding these effective strategies, the
Budget proposes to invest in a broad variety
of additional evidence-based approaches to
tackle important challenges. For example,
the Budget provides substantially more very
low-income families with rental subsidies
to move to higher-opportunity areas, which
research has demonstrated can have large
positive effects on children’s—especially

105

THE BUDGET FOR FISCAL YEAR 2017

young children’s—educational attainment and
long-term earnings; proposes evidence-based
strategies to end chronic and family homelessness; establishes an Apprenticeship Training
Fund that would help meet the President’s goal
to double the number of apprentices across the
United States to give more workers the opportunity to develop job-relevant skills while they
are earning a paycheck; incentivizes States to
adopt evidence-informed approaches to criminal justice reform; and encourages States to
adopt evidence-based psychosocial interventions to address the behavioral and mental
health needs of children in foster care and reduce reliance on psychotropic medications and
improve overall health outcomes.
To enable future administrations and the
Congress—as well as State and local leaders—
to drive even more resources to policies backed
by strong evidence, the Budget proposes a series of legislative changes and investments
to accelerate learning about what programs
work and why.
The Budget also expands the use of innovative, outcome-focused grant designs that
focus Federal dollars on effective practices
while also encouraging innovation in service
delivery. The proposed Emergency Assistance
and Service Connection Grants (discussed
in Chapter 3), the Upward Mobility project
(also discussed in Chapter 3), the expansion
of Performance Partnership Pilots (discussed
earlier in this chapter), funding for Education
Innovation and Research, a new program
that replaces and builds on the successes of
Investing in Innovation (discussed in Chapter
3), First in the World, and the continued proposals to invest in Pay for Success are all
examples of how the Administration is proposing to partner with States, communities, and
consortia across the Nation to make it easier
to test and validate promising evidence-based
approaches. All of these models include strong
validation and evaluation requirements and
hold grantees accountable for achieving outcomes, while also granting flexibility on how

to best achieve those outcomes within their
community.

Improving Capacity to Build
and Use Evidence
Federal agencies, States, communities, and
the nonprofit community have made notable
progress in developing and implementing evidence-based practices and in learning which
practices are more effective. As discussed in the
Analytic Perspectives volume chapter, Building
the Capacity to Produce and Use Evidence, the
Administration is making progress in developing the Federal capacity to more routinely and
reliably develop high-quality evidence to inform
important policies. However, significant challenges remain, and in order to continue making
progress, evidence-building must be cheaper and
easier to do. One way to do this is by making better use of data the Government already collects
through administering programs—also known
as “administrative data”—to answer important
questions about the effectiveness of Federal
programs and policies.
Employment and earnings data are among the
most valuable Federal administrative information. Because many Federal (as well as State and
local) programs are intended, in whole or in part,
to increase employment and earnings, accurate
employment and earnings data are needed to
measure performance or conduct rigorous evaluations across a range of programs. The National
Directory of New Hires (NDNH) is a database
of employment and Unemployment Insurance
(UI) information administered by the Office of
Child Support Enforcement within HHS. Access
to this data is tightly controlled by statute, and
HHS implements strong privacy, confidentiality,
and security protections to safeguard the data
from unauthorized use or disclosure—there
has never been a breach of the national NDNH
data. Currently several programs are successfully using this data for program integrity,
implementation, and research purposes.
The Budget proposes to build on this strong
history of data stewardship and protection

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A GOVERNMENT OF THE FUTURE

to allow additional programs and agencies to
access this valuable data to learn what works
and improve program implementation, while
continuing to protect the privacy, security, and
confidentiality of that data. Specifically, the
Budget supports a package of proposals designed to clearly specify the purpose for which
the data may be used, require that the minimum
data necessary be used to achieve the purpose,
and include strong penalties for the unauthorized access, use, disclosure, or re-disclosure of
the data. In order to streamline access to the
data by authorized agencies for program integ-

rity purposes, the package includes a proposal
which would allow the authorized agencies access to the NDNH data through the Do Not Pay
Business Center at Treasury. In addition, each
component of the package is designed to satisfy
the Administration’s criteria for when authority to access NDNH data should be considered.
The package also requires HHS to review each
agency’s data security before allowing that
agency to access the data, prohibits HHS from
granting access to the data for any purpose
not authorized in statute, and requires HHS to
publicly report on the use of NDNH data.

NDNH Access Proposals
Agency

Proposal
Privacy and confidentiality protections

HHS/ACF

The Package would: 1) require the Administration for Children and
Families (ACF) to review an entity’s data security prior to granting
access to NDNH data; 2) prohibit ACF from granting access to
NDNH data for any reason not authorized in statute; and 3) require
ACF to generate public reporting on the use of records.
Program integrity proposals

Assist with income and employer verification and improve the
HHS/Centers for Medicare
Affordable Care Act advance premium tax credit payment accuracy
& Medicaid Services
to reduce improper payments.
Department of
Verify eligibility and validate the income source information
Agriculture/Rural Housing provided by means-tested single family housing loan applicants and
Service
multifamily housing project-based tenants.
Railroad Retirement
Establish eligibility for processing disability benefits in a more
Board
efficient manner.
Require (rather than permit) states to cross-match with NDNH to
Department of Labor/UI
identify improper payments.
Evaluation/statistical/program administration proposals
Access to NDNH for Federal statistical agencies, units, and
evaluation offices or their designees for statistical, research,
Multi/Statistical and
evaluation, and performance measurement purposes associated with
Evaluation Access
assessing positive labor market outcomes. Would reduce cost of the
2020 Census by several hundred million dollars.
Workforce Programs at
Provide access for program administration, including Federal
Departments of Labor and oversight and evaluation, and authorize data exchanges between
Education
State child support and workforce agencies.

THE BUDGET FOR FISCAL YEAR 2017

Reorganizing Government: Reforming
to Win in the Global Economy
The Administration will also continue efforts
to drive lasting change in how Government works
through reorganizing or consolidating Federal
programs to reduce duplication, and identify cost
savings to allow the Government to invest more
in productive activities. The President is again
asking the Congress to revive an authority that
Presidents had for almost the entire period from
1932 through 1984—the ability to submit proposals to reorganize the Executive Branch through

107
a fast-track procedure. In effect, the President is
asking that the next President have the same authority that any business owner has to reorganize
or streamline operations to meet changing circumstances and customer demand. For example,
consolidating business and trade promotion into
a single department would enhance Government
productivity and effectiveness. Bringing together the core tools to expand trade and investment,
grow small businesses, and support innovation,
would help American businesses compete in the
global economy, expand exports, and create more
jobs at home.

CUTS, CONSOLIDATIONS, AND SAVINGS
As part of the President’s Management Agenda,
the Administration has focused on improving
Government efficiency to maximize the value
of Federal spending. The Budget invests in
concentrating the delivery of administrative
functions through shared services, simplifying
Federal contracting, continuing the use of
benchmarking to inform data-driven Federal
management, implementing new transparency
efforts, and shrinking the Federal real property
footprint. Further detail on all of these initiatives
is provided in the chapter titled A Government of
the Future.
The Budget continues efforts to reorganize or consolidate Federal programs to reduce duplication and
identify cost savings to allow the Government to invest more in productive activities. The President is
again asking the Congress to restore fast-track authority to the President to submit proposals to reorganize the Executive Branch. Previous Presidents
have been granted this authority for almost the entire period from 1932 through 1984. In effect, the
President is asking that the next President have the
same authority that any business owner has to reorganize or streamline operations to meet changing
circumstances and customer demand.
The Budget also continues to target unnecessary
or lower priority programs for reduction or elimination. In the President’s first seven Budgets,

109

the Administration identified, on average, more
than 140 cuts, consolidations, and savings averaging more than $22 billion each year. Many of
these proposals have now been implemented, and
the Budget builds on this success. It includes
117 cuts, consolidations, and savings proposals,
which are projected to save over $14 billion in
2017. Savings from discretionary proposals total
$5.9 billion in 2017, reflecting the trade-offs and
choices the Administration is making to adhere to
the funding levels established in the Bipartisan
Budget Act of 2015. Savings from mandatory
and program integrity proposals total $8.2 billion
in 2017 and $670 billion over 10 years; about 75
percent of these savings are from health reform
proposals. The Budget shows that investments
in growth and opportunity are compatible with
putting the Nation’s finances on a strong and
sustainable path. Overall, the Budget achieves
about $2.9 trillion in deficit reduction, primarily
from reforms in health programs, the tax code,
and immigration.
Discretionary and mandatory cuts, consolidations, and savings proposals in this year’s Budget
are detailed on the following tables. Savings from
the Administration’s program integrity proposals,
totaling $119 billion through 2026, are detailed
in the Budget Process chapter of the Analytical
Perspectives volume.

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CUTS, CONSOLIDATIONS, AND SAVINGS

DISCRETIONARY CUTS, CONSOLIDATIONS, AND SAVINGS
(Budget authority in millions of dollars)

2016

2017 Change
from 2016

2017

Cuts
21 Century Community Learning Centers, Department of Education �����������������������������������������������������������������������������������������������
317 Immunization Program, Department of Health and Human Services �������������������������������������������������������������������������������������������
Area Health Education Centers, Department of Health and Human Services ������������������������������������������������������������������������������������
Beaches Grants Program, Environmental Protection Agency �������������������������������������������������������������������������������������������������������������
Broadband Loans, Department of Agriculture 1 �����������������������������������������������������������������������������������������������������������������������������������
Centers for Disease Control and Prevention Direct Healthcare Screenings, Department of Health and Human Services �����������������
Clean Water and Drinking Water State Revolving Loan Funds, Environmental Protection Agency ����������������������������������������������������
Community Development Block Grant (Formula Funds), Department of Housing and Urban Development ��������������������������������������
Community Economic Development, Department of Health and Human Services 1 ���������������������������������������������������������������������������
Community Services Block Grant, Department of Health and Human Services ���������������������������������������������������������������������������������
Delta Regional Authority Grants, Department of Agriculture 1 �������������������������������������������������������������������������������������������������������������
Diesel Emissions Reduction Grant Program, Environmental Protection Agency 1 ������������������������������������������������������������������������������
Economic Impact Grants, Department of Agriculture 1 ������������������������������������������������������������������������������������������������������������������������
Education Research Centers and Agricultural Research, Department of Health and Human Services 1 ��������������������������������������������
Environmental Health Outcome Tracking Network, Department of Health and Human Services ������������������������������������������������������
FEMA Education, Training, and Exercises, Department of Homeland Security ����������������������������������������������������������������������������������
FEMA Pre-Disaster Mitigation Grants, Department of Homeland Security �����������������������������������������������������������������������������������������
FEMA Preparedness Grants, Department of Homeland Security �������������������������������������������������������������������������������������������������������
Foreign Military Financing, Department of State ���������������������������������������������������������������������������������������������������������������������������������
Global Agriculture and Food Security Program, Department of the Treasury �������������������������������������������������������������������������������������
Grants for Abstinence-Only Programs, Department of Health and Human Services ��������������������������������������������������������������������������
Grants-In-Aid for Airports, Department of Transportation 1 ������������������������������������������������������������������������������������������������������������������
Great Lakes Restoration Initiative, Environmental Protection Agency ������������������������������������������������������������������������������������������������
Harry S. Truman Scholarship Foundation �������������������������������������������������������������������������������������������������������������������������������������������
Health Care Services Grant Program, Department of Agriculture 1 �����������������������������������������������������������������������������������������������������
High Energy Cost Grants, Department of Agriculture 1 ������������������������������������������������������������������������������������������������������������������������
High Intensity Drug Trafficking Areas, Office of National Drug Control Policy 1 �����������������������������������������������������������������������������������
ICE Immigration Detention Beds, Department of Homeland Security �������������������������������������������������������������������������������������������������
Impact Aid - Payments for Federal Property, Department of Education 1 ��������������������������������������������������������������������������������������������
Integrated NSF Support Promoting Interdisciplinary Research and Education (INSPIRE), National Science Foundation 1 ���������������
International Education (Overseas Programs), Department of Education 1 �����������������������������������������������������������������������������������������
International Narcotics Control and Law Enforcement, Department of State ��������������������������������������������������������������������������������������
LIHEAP, Department of Health and Human Services ��������������������������������������������������������������������������������������������������������������������������
Littoral Combat Ships, Department of Defense �����������������������������������������������������������������������������������������������������������������������������������
Low Priority Studies and Construction, Corps of Engineers ����������������������������������������������������������������������������������������������������������������
McGovern-Dole Food for Education Program, Department of Agriculture ������������������������������������������������������������������������������������������
Mexico Border Targeted Water Infrastructure Grants, Environmental Protection Agency �������������������������������������������������������������������
Mutual Self-Help Housing Grants, Department of Agriculture �������������������������������������������������������������������������������������������������������������
National Heritage Areas, Department of the Interior 1 �������������������������������������������������������������������������������������������������������������������������
National Priorities Research, Environmental Protection Agency 1 �������������������������������������������������������������������������������������������������������
National Solar Observatory, National Science Foundation 1 ����������������������������������������������������������������������������������������������������������������
National Wildlife Refuge Fund, Department of the Interior 1 ����������������������������������������������������������������������������������������������������������������
Operation and Maintenance Work, Corps of Engineers ����������������������������������������������������������������������������������������������������������������������
Preventive Health and Health Services Block Grant, Department of Health and Human Services 1 ���������������������������������������������������
PRIME Technical Assistance, Small Business Administration 1 �����������������������������������������������������������������������������������������������������������
REACH, Department of Health and Human Services �������������������������������������������������������������������������������������������������������������������������
Research, Education and Extension Grants, Department of Agriculture:

1,167
611
30
10
5
266
2,257
3,000
30
715
3
50
6
54
34
233
100
1,317
6,026
43
10
3,350
300
1
3
10
250
1,649
67
25
7
1,266
3,390
1,332
1,983
202
10
28
20
14
10
13
3,137
160
5
51

1,000
561
.........
.........
.........
209
2,000
2,800
.........
674
.........
10
.........
.........
24
157
54
857
5,714
23
.........
2,900
250
.........
.........
.........
196
1,330
.........
.........
2
1,138
3,000
1,126
1,175
182
5
18
9
.........
6
.........
2,705
.........
.........
30

–167
–50
–30
–10
–5
–57
–257
–200
–30
–41
–3
–40
–6
–54
–10
–76
–46
–460
–312
–20
–10
–450
–50
–1
–3
–10
–54
–319
–67
–25
–5
–128
–390
–206
–808
–20
–5
–9
–11
–14
–4
–13
–432
–160
–5
–21

Animal Health (Sec. 1433) 1 �����������������������������������������������������������������������������������������������������������������������������������������������������������

4

.........

–4

st

111

THE BUDGET FOR FISCAL YEAR 2017

DISCRETIONARY CUTS, CONSOLIDATIONS, AND SAVINGS—Continued
(Budget authority in millions of dollars)

2016

2017 Change
from 2016

2017

Alfalfa Forage 1 �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

2

.........

–2

Aquaculture Centers 1 ��������������������������������������������������������������������������������������������������������������������������������������������������������������������

4

.........

–4

Aquaculture Research 1 �����������������������������������������������������������������������������������������������������������������������������������������������������������������

1

.........

–1

Capacity Building: Non-Land Grant Colleges 1 ������������������������������������������������������������������������������������������������������������������������������

5

.........

–5

Farm Business Management and Benchmarking 1 ������������������������������������������������������������������������������������������������������������������������

1

.........

–1

Food Animal Residue Avoidance Database 1 ���������������������������������������������������������������������������������������������������������������������������������

1

.........

–1

Methyl Bromide Transition Program 1 ���������������������������������������������������������������������������������������������������������������������������������������������

2

.........

–2

New Technologies for Extension 1 ��������������������������������������������������������������������������������������������������������������������������������������������������

2

1

–1

Potato Breeding Research (Competitive) 1 �������������������������������������������������������������������������������������������������������������������������������������

2

.........

–2

Rural Health and Safety 1 ���������������������������������������������������������������������������������������������������������������������������������������������������������������

2

.........

–2

Sungrants 1 �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������

3

.........

–3

Supplemental and Alternative Crops 1 �������������������������������������������������������������������������������������������������������������������������������������������

1

.........

–1

Veterinary Services Grant Program 1 ���������������������������������������������������������������������������������������������������������������������������������������������
Rural Community Facilities, Department of Health and Human Services 1 �����������������������������������������������������������������������������������������
Rural Energy Savings Program, Department of Agriculture 1 ��������������������������������������������������������������������������������������������������������������
Rural Hospital Flexibility Grant Programs, Department of Health and Human Services ���������������������������������������������������������������������
Rural Multifamily Housing Preservation Grants, Department of Agriculture 1 ��������������������������������������������������������������������������������������
State Criminal Alien Assistance Program, Department of Justice �������������������������������������������������������������������������������������������������������
State Indoor Radon Grant Program, Environmental Protection Agency ���������������������������������������������������������������������������������������������
Sustainable and Healthy Communities Research, Environmental Protection Agency ������������������������������������������������������������������������
Targeted Airshed Grants, Environmental Protection Agency ���������������������������������������������������������������������������������������������������������������
Urban and Community Forestry, Department of Agriculture ����������������������������������������������������������������������������������������������������������������
Water and Wastewater and Community Facilities Loan Guarantees, Department of Agriculture 1 ������������������������������������������������������
Water and Wastewater Grants and Direct Loans, Department of Agriculture �������������������������������������������������������������������������������������
Water Quality Research and Support Grants, Environmental Protection Agency 1 ����������������������������������������������������������������������������
Women in Apprenticeship and Nontraditional Occupations, Department of Labor 1 ���������������������������������������������������������������������������

3
7
8
42
4
210
8
155
20
28
4
512
13
1

.........
.........
.........
26
.........
.........
.........
147
.........
24
.........
462
.........
.........

–3
–7
–8
–16
–4
–210
–8
–8
–20
–4
–4
–50
–13
–1

Total, Discretionary Cuts ������������������������������������������������������������������������������������������������������������������������������������������������������������������

34,290

28,815

–5,477

Chemical, Biological, Radiological, Nuclear, and Explosives Office, Department of Homeland Security ������������������������������������������
Management Headquarters Reductions, Department of Defense ������������������������������������������������������������������������������������������������������
Section 4 and Rural Capacity Building, Department of Housing and Urban Development �����������������������������������������������������������������
Self-Help Homeownership Opportunity Program, Department of Housing and Urban Development �������������������������������������������������

505
.........
40
10

501
–154
35
10

–4
–154
–5
.........

Total, Discretionary Consolidations ������������������������������������������������������������������������������������������������������������������������������������������������

555

392

–163

Change in Plutonium Disposition Approach, Department of Energy ���������������������������������������������������������������������������������������������������
Information Technology Consolidation, Business Process Improvements, and Other Efficiencies, Department of Defense �������������
Senate Campaign Finance Reports Electronic Submission, Federal Election Commission ��������������������������������������������������������������

340
.........
.........

285
–243
.........

–55
–243
.........

Total, Discretionary Savings �������������������������������������������������������������������������������������������������������������������������������������������������������������

340

42

–298

Total, Discretionary Cuts, Consolidations, and Savings ���������������������������������������������������������������������������������������������������������������

35,187

29,249

–5,938

Consolidations

Savings

1

This cut has been identified as a lower priority program activity for purposes of the GPRA Modernization Act, at 31 U.S.C. 1115(b)(10). Additional information regarding
this proposed cut is included in the respective agency’s Congressional Justification submission, where applicable.

112

CUTS, CONSOLIDATIONS, AND SAVINGS

MANDATORY CUTS, CONSOLIDATIONS, AND SAVINGS
(Outlays and receipts in millions of dollars)
2017

2018

2019

2020

20172021

2021

20172026

Cuts
Abstinence Education Program, Department of Health and Human Services 1 ��������������������������������
Coal Tax Preferences, Department of Energy

–1

–50

–23

–1

.........

–75

–75

Domestic Manufacturing Deduction for Hard Mineral Fossil Fuels 1 ���������������������������������������������

–11

–20

–21

–22

–23

–97

–227

Expensing of Exploration and Development Costs  ���������������������������������������������������������������������

–20

–35

–35

–33

–32

–155

–285

Percent Depletion for Hard Mineral Fossil Fuels 1 �������������������������������������������������������������������������

–113

–183

–177

–145

–114

–732

–1,121

Royalty Taxation 1 ��������������������������������������������������������������������������������������������������������������������������

–26
–1,259
–4
.........

–52
–1,575
–4
–286

–52
–1,794
–4
–310

–52
–1,843
–4
–339

–52
–1,878
–4
–376

–234
–8,351
–20
–1,311

–494
–18,013
–41
–3,254

1

Crop Insurance Program, Department of Agriculture ������������������������������������������������������������������������
Geothermal Payments to Counties, Department of the Interior 2 �������������������������������������������������������
Gulf of Mexico Energy Security Act (GOMESA) Payments to States, Department of the Interior 2 ���
Oil and Gas Company Tax Preferences, Department of Energy
Increase Geological and Geophysical Amortization Period for Independent Producers to Seven
Years 1 ��������������������������������������������������������������������������������������������������������������������������������������

–54

–197

–307

–296

–235

–1,089

–1,515

Repeal Credit for Oil and Gas Produced from Marginal Wells 1 ����������������������������������������������������

.........

.........

.........

.........

.........

.........

.........

Repeal Deduction for Tertiary Injectants  �������������������������������������������������������������������������������������

–5

–8

–8

–8

–8

–37

–77

Repeal Domestic Manufacturing Tax Deduction for Oil and Natural Gas Companies1 ����������������

–470

–836

–869

–901

–932

–4,008

–9,149

Repeal Enhanced Oil Recovery Credit 1 ���������������������������������������������������������������������������������������

–235

–559

–792

–979

–1,070

–3,635

–8,803

Repeal Exception to Passive Loss Limitations for Working Interests in Oil and Natural Gas
Properties 1 ������������������������������������������������������������������������������������������������������������������������������

–9

–12

–12

–12

–11

–56

–103

Repeal Expensing of Intangible Drilling Costs  ����������������������������������������������������������������������������

–966

–1,541

–1,439

–1,645

–1,526

–7,117

–10,050

Repeal Percentage Depletion for Oil and Natural Gas Wells 1 ������������������������������������������������������
Unrestricted Abandoned Mine Lands Payments, Department of the Interior 2 ����������������������������������

–483
–6

–770
–31

–725
–63

–666
–82

–589
–90

–3,233
–272

–4,990
–520

Total, Mandatory Cuts ���������������������������������������������������������������������������������������������������������������������

–3,661

–6,109

–6,608

–7,027

–6,940

–30,347

–58,642

Reform Teacher Loan Forgiveness Benefits, Department of Education ��������������������������������������������

.........

.........

.........

.........

.........

.........

.........

Total, Mandatory Consolidations ���������������������������������������������������������������������������������������������������

.........

.........

.........

.........

.........

.........

.........

Federal Employee Health Benefits Program Reforms, Office of Personnel Management �����������������
Health Care (Medicaid Proposals), Department of Health and Human Services ������������������������������
Health Care (Pharmaceuticals), Department of Health and Human Services 3 ���������������������������������
Medicare Provider Payment Modifications, Department of Health and Human Services 3, 4 ��������������

.........
–65
–777 –1,037
–920 –1,010
–3,431 –10,236

–141
–1,427
–1,330
–20,292

–193
–3,443
–1,800
–30,312

–239
–638
–2,889
–4,263 –10,947 –43,102
–2,070
–7,130 –20,590
–38,429 –102,698 –425,572

Total, Mandatory Savings ���������������������������������������������������������������������������������������������������������������

–5,128

–12,347

–23,190

–35,748

–45,000 –121,413 –492,153

Total, Mandatory Cuts, Consolidations, and Savings ������������������������������������������������������������������

–8,789

–18,457

–29,798

–42,775

–51,941 –151,760 –550,795

1

1

Consolidations

Savings

This cut has been identified as a lower priority program activity for purposes of the GPRA Modernization Act, at 31 U.S.C. 1115(b)(10). Additional information regarding
this proposed cut is included in the Governmental Receipts chapter of the Analytical Perspectives volume.
2
This cut has been identified as a lower priority program activity for purposes of the GPRA Modernization Act, at 31 U.S.C. 1115(b)(10). Additional information regarding
this proposed cut is included in the respective agency’s Congressional Justification submission, where applicable.
3
Medicare savings estimates do not include interactions.
4
In addition to the savings reported on this table, the Budget includes an additional $56.4 billion in 10-year savings for Medicare Structural Reforms, as detailed on table S-9.
1

Summary Tables

113

3,250
3,688
438
13,117
11,882
17,803

18.3%
20.7%
2.5%
73.7%
66.7%

Budget Totals in Billions of Dollars:
Receipts �������������������������������������������������������
Outlays ��������������������������������������������������������

Deficit �������������������������������������������������������

Debt held by the public �������������������������������
Debt net of financial assets ������������������������

Gross domestic product (GDP) �����������������������

Budget Totals as a Percent of GDP:
Receipts �������������������������������������������������������
Outlays ��������������������������������������������������������

Deficit �������������������������������������������������������

Debt held by the public �������������������������������
Debt net of financial assets ������������������������

2015

76.5%
67.7%

3.3%

18.1%
21.4%

18,472

14,129
12,498

616

3,336
3,951

2016

Table S–1.  Budget Totals

76.5%
67.4%

2.6%

18.9%
21.5%

19,303

14,763
13,001

503

3,644
4,147

2017

76.1%
66.8%

2.3%

19.4%
21.6%

20,130

15,324
13,454

454

3,899
4,352

2018

76.1%
66.6%

2.6%

19.5%
22.1%

21,013

15,982
14,003

549

4,095
4,644

2019

75.8%
66.3%

2.4%

19.8%
22.3%

21,921

16,615
14,537

534

4,346
4,880

2020

75.5%
66.0%

2.4%

20.0%
22.4%

22,875

17,264
15,089

552

4,572
5,124

2021

(In billions of dollars and as a percent of GDP)

75.5%
66.0%

2.8%

19.9%
22.7%

23,872

18,016
15,748

660

4,756
5,415

2022

75.4%
65.9%

2.7%

19.9%
22.6%

24,912

18,793
16,424

677

4,949
5,626

2023

75.2%
65.7%

2.5%

19.9%
22.4%

25,995

19,548
17,074

650

5,177
5,827

2024

75.2%
65.7%

2.7%

20.0%
22.7%

27,123

20,396
17,814

741

5,411
6,152

2025

75.3%
65.7%

2.8%

20.0%
22.8%

28,301

21,302
18,607

793

5,669
6,462

2026

2.5%

19.5%
22.0%

2,593

20,555
23,148

2017–
2021

2.6%

19.7%
22.3%

6,113

46,517
52,630

2017–
2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

115

3
–15
–2
–6

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
–1

Middle-class and pro-work tax reforms ����������������������������������
Fund America’s College Promise 5 ������������������������������������������
Child care for all low-and moderate-income families with
young children ����������������������������������������������������������������������
Capital gains tax reform ����������������������������������������������������������
Focus retirement tax incentives on working and middleclass families ������������������������������������������������������������������������
Financial fee �����������������������������������������������������������������������������

Investments in early education and children’s health 6 ��������
Tobacco tax financing ���������������������������������������������������������������

Replacement of mandatory sequestration ������������������������������

Additional discretionary proposals, including investments in
education, infrastructure, innovation, and security ����������
Additional mandatory and tax proposals �������������������������������

–56
4
–*
–46

.........
.........
.........
.........
–1

Subtotal, tax reforms, investments, and additional
deficit reduction ���������������������������������������������������������������

–108

6

–62

–1

.........

–1

–*

18
4

10

*
–10

–33

Additional deficit reduction from health, tax, and immigration reform:
Health savings ������������������������������������������������������������������������
Curbing inefficient tax breaks for the wealthy and closing
loopholes 7 ����������������������������������������������������������������������������
Immigration reform ����������������������������������������������������������������
Debt service �����������������������������������������������������������������������������
Total, additional deficit reduction ��������������������������������������

Debt service and indirect interest effects ������������������������������
Total, tax reforms and investments in innovation, opportunity, and economic growth ��������������������������������������������

6
*

*

Elements of business tax reform 4 ������������������������������������������

7
–7
–36

.........
.........
.........

Investments in a 21st Century infrastructure 3 ����������������������
Impose an oil fee ����������������������������������������������������������������������
Transition to a reformed business tax system ����������������������

.........

612
3.2%

.........

616
3.3%

2017

Mission Innovation ������������������������������������������������������������������

Proposals in the 2017 Budget: 2
Tax reforms and investments in innovation,
opportunity, and economic growth:

Projected deficits in the adjusted baseline 1 ���������������������������
Percent of GDP �����������������������������������������������������������������������������

2016

–165

–74
3
–2
–71

1

–93

–3

44
–15

18

1
–13

–2
–11

4
–25

25
1

–61

18
–14
–60

*

655
3.3%

2018

–179

–81
–5
–5
–97

–6

–82

–6

52
–20

19

3
–13

–2
–11

5
–21

24
2

–60

27
–22
–60

1

785
3.7%

2019

–213

–89
–10
–10
–132

–24

–81

–10

49
–25

20

6
–13

–3
–11

6
–22

25
3

–56

36
–28
–60

2

814
3.7%

2020

–254

–95
–20
–15
–164

–33

–91

–13

41
–31

21

8
–12

–3
–11

7
–23

26
4

–55

43
–35
–60

3

881
3.9%

2021

(Deficit increases (+) or decreases (–) in billions of dollars)

–309

–101
–20
–21
–185

–43

–124

–17

–19
–38

23

10
–12

–3
–12

8
–23

26
5

–55

44
–41
–24

4

1,055
4.4%

2022

–349

–106
–25
–28
–213

–54

–135

–21

–48
–41

24

11
–11

–3
–12

9
–25

27
6

–56

42
–42
.........

4

1,120
4.5%

2023

–392

–112
–29
–36
–241

–64

–151

–26

–62
–40

25

12
–11

–4
–12

11
–26

28
9

–56

38
–43
.........

5

1,143
4.4%

2024

Table S–2.  Effect of Budget Proposals on Projected Deficits

–427

–118
–34
–44
–268

–71

–160

–31

–72
–42

35

12
–10

–4
–13

12
–27

29
14

–58

32
–43
.........

5

1,273
4.7%

2025

–511

–124
–34
–54
–301

–90

–209

–37

–80
–45

7

11
–10

–4
–13

14
–29

30
17

–59

26
–43
.........

5

1,415
5.0%

2026

–920

–394
–28
–33
–510

–56

–409

–32

204
–86

88

19
–61

–12
–50

24
–105

105
9

–265

130
–107
–275

6

3,748
3.5%

–2,908

–955
–170
–216
–1,719

–378

–1,189

–164

–77
–292

202

76
–115

–30
–111

78
–235

246
61

–549

312
–319
–299

29

9,753
4.1%

20172026

Totals
20172021

116
SUMMARY TABLES

–1
616
3.3%

Total proposals in the 2017 Budget ���������������������������������

Resulting deficits in 2017 Budget ���������������������������������������������
Percent of GDP �����������������������������������������������������������������������������

503
2.6%

–109

–*
–*
–*

2017

454
2.3%

–202

–37
–*
–37

2018

549
2.6%

–236

–55
–2
–57

2019

534
2.4%

–280

–63
–4
–67

2020

552
2.4%

–329

–67
–7
–74

2021

660
2.8%

–395

–76
–10
–86

2022

677
2.7%

–443

–81
–13
–94

2023

650
2.5%

–492

–84
–16
–100

2024

741
2.7%

–533

–86
–20
–105

2025

793
2.8%

–622

–88
–23
–111

2026

2,593
2.5%

–1,155

–221
–14
–235

20172021

6,113
2.6%

–3,640

–636
–96
–732

20172026

Totals

Memorandum:
Debt held by the public in the adjusted baseline ���������������������� 14,129 14,869 15,620 16,502 17,399 18,360 19,490 20,690 21,917 23,278 24,788
Percent of GDP ������������������������������������������������������������������������ 76.5% 77.0% 77.6% 78.5% 79.4% 80.3% 81.6% 83.1% 84.3% 85.8% 87.6%
Debt held by the public in the 2017 Budget ������������������������������ 14,129 14,763 15,324 15,982 16,615 17,264 18,016 18,793 19,548 20,396 21,302
Percent of GDP ������������������������������������������������������������������������ 76.5% 76.5% 76.1% 76.1% 75.8% 75.5% 75.5% 75.4% 75.2% 75.2% 75.3%
* $500 million or less.
1
See Tables S-4 and S-8 for information on the adjusted baseline.
2
For cumulative deficit reduction since January 2011, see Table S-3.
3
Investments in a 21st Century infrastructure include $385 billion in new resources over 10 years for investments in a more innovative, cleaner, and safer transportation
system through the 21st Century Clean Transportation Plan and assistance to families with burdensome energy costs. These investments, and an existing $110 billion
Highway Trust Fund solvency gap, are fully paid for, including outlays outside the 10-year budget window, with $319 billion in net revenues from a new oil fee and $176
billion in transition revenues from business tax reform. The remaining $123 billion of transition revenues would be available for deficit reduction.
4
The cost of business-related tax provisions enacted in December 2015 is projected to be nearly $500 billion over the 2016 to 2026 period.
5
Including grants to Historically Black Colleges and Universities, Hispanic-Serving Institutions, and other Minority-Serving Institutions.
6
Includes proposals to expand home visiting and enact Preschool for All.
7
Includes proposals to implement the Buffett Rule by imposing a new “Fair Share Tax,” rationalize Net Investment Income and Self-Employment Contributions Act (SECA)
taxes, and reduce the value of certain tax expenditures.

.........
.........
.........

Other changes to deficits:
Reductions in Overseas Contingency Operations ������������������
Debt service �����������������������������������������������������������������������������
Total, other changes to deficits �������������������������������������������

2016

(Deficit increases (+) or decreases (–) in billions of dollars)

Table S–2.  Effect of Budget Proposals on Projected Deficits—Continued

THE BUDGET FOR FISCAL YEAR 2017

117

–354
–202
–125
–680
–4,470

–1,758
–157
–814
–1,061
–3,790

2017–
2026

Additional deficit reduction from health, tax, and immigration reform: 5
Health savings ����������������������������������������������������������������������������������������������������������������������������������
–378
Curbing inefficient tax breaks for the wealthy and closing loopholes �������������������������������������������
–955
Immigration reform ��������������������������������������������������������������������������������������������������������������������������
–170
Debt service ���������������������������������������������������������������������������������������������������������������������������������������
–216
Total, additional deficit reduction ������������������������������������������������������������������������������������������������ –1,719

Tax reforms and investments in innovation, opportunity, and economic growth: 3
Mission Innovation ���������������������������������������������������������������������������������������������������������������������������
29
Investments in a 21st Century infrastructure ��������������������������������������������������������������������������������
312
Impose an oil fee �������������������������������������������������������������������������������������������������������������������������������
–319
Transition to a reformed business tax system ��������������������������������������������������������������������������������
–299
Elements of business tax reform 4 ���������������������������������������������������������������������������������������������������
–549
Middle-class and pro-work tax reforms �������������������������������������������������������������������������������������������
246
Fund America’s College Promise ������������������������������������������������������������������������������������������������������
61
Child care for all low-and moderate-income families with young children �����������������������������������
78
Capital gains tax reform �������������������������������������������������������������������������������������������������������������������
–235
Focus retirement tax incentives on working and middle-class families ����������������������������������������
–30
Financial fee ��������������������������������������������������������������������������������������������������������������������������������������
–111
Investments in early education and children’s health ��������������������������������������������������������������������
76
Tobacco tax financing ������������������������������������������������������������������������������������������������������������������������
–115
Replacement of mandatory sequestration ���������������������������������������������������������������������������������������
202
Additional discretionary proposals, including investments in education, infrastructure,
innovation, and security ��������������������������������������������������������������������������������������������������������������
–77
Additional mandatory and tax proposals ����������������������������������������������������������������������������������������
–292
Debt service and indirect interest effects ����������������������������������������������������������������������������������������
–164
Total, tax reforms and investments in innovation, opportunity, and economic growth ������������ –1,189

Deficit reduction achieved through January 2016, excluding Overseas Contingency
Operations (OCO):
Enacted deficit reduction excluding pending Joint Committee enforcement:
Discretionary savings 1 ����������������������������������������������������������������������������������������������������������������
Mandatory savings ������������������������������������������������������������������������������������������������������������������������
Revenues ���������������������������������������������������������������������������������������������������������������������������������������
Debt service ����������������������������������������������������������������������������������������������������������������������������������
Subtotal, enacted deficit reduction excluding pending Joint Committee enforcement ��������
Pending Joint Committee enforcement: 2
Discretionary cap reductions ��������������������������������������������������������������������������������������������������������
Mandatory sequestration �������������������������������������������������������������������������������������������������������������
Debt service ����������������������������������������������������������������������������������������������������������������������������������
Subtotal, pending Joint Committee enforcement �������������������������������������������������������������������
Total, deficit reduction achieved, excluding OCO ������������������������������������������������������������������������

(Deficit reduction (–) or increase (+) in billions of dollars)

Table S–3.  Cumulative Deficit Reduction Since 2011

118
SUMMARY TABLES

2017–
2026

5

4

3

2

1

Excludes savings from reductions in OCO.
Consists of mandatory sequestration for 2017–2025 and discretionary cap reductions for 2018–2021.
See Table S–2 for details on tax reform and investment proposals.
The cost of business-related tax provisions enacted in December 2015 is projected to be nearly $500
billion over the 2016 to 2026 period.
See Table S–2 for details on additional deficit reduction proposals.

Savings in Overseas Contingency Operations (OCO):
Enacted reduction in OCO funding ��������������������������������������������������������������������������������������������� –1,050
Proposed reductions in OCO ��������������������������������������������������������������������������������������������������������
–636
Debt service �����������������������������������������������������������������������������������������������������������������������������������
–401
Total, savings in overseas contingency operations (OCO) ����������������������������������������������������� –2,087

Revenue and outlay effects of achieved and proposed deficit reduction:
Enacted outlay reductions and 2017 Budget spending proposals ��������������������������������������������� –3,760
Enacted receipt increases and 2017 Budget tax proposals �������������������������������������������������������� –3,448
Immigration reform ����������������������������������������������������������������������������������������������������������������������
–170

Memoranda:

Grand total, achieved and proposed deficit reduction excluding OCO ������������������������������� –7,378

Subtotal, tax reforms, investments, and additional deficit reduction ���������������������������������� –2,908

(Deficit reduction (–) or increase (+) in billions of dollars)

Table S–3.  Cumulative Deficit Reduction
Since 2011—Continued

THE BUDGET FOR FISCAL YEAR 2017

119

583
581

1,541

770

19
35
96
51
3,250
438
223
215

Estate and gift taxes ����������������������������������������������������������������������

Customs duties �������������������������������������������������������������������������������

Deposits of earnings, Federal Reserve System �����������������������������
Other miscellaneous receipts ��������������������������������������������������������

Total receipts ������������������������������������������������������������������������������

Deficit ������������������������������������������������������������������������������������������������

Net interest ������������������������������������������������������������������������������������

Primary deficit ����������������������������������������������������������������������������

10
98

Other retirement ������������������������������������������������������������������������

51

Unemployment insurance ���������������������������������������������������������

Excise taxes ������������������������������������������������������������������������������������

234

Social Security payroll taxes �����������������������������������������������������

Medicare payroll taxes ���������������������������������������������������������������

Social insurance and retirement receipts:

344

Individual income taxes �����������������������������������������������������������������

Corporation income taxes ��������������������������������������������������������������

Receipts:

3,688

Total outlays �������������������������������������������������������������������������������

240

223
.........
.........

Net interest ������������������������������������������������������������������������������������

2,301

Subtotal, mandatory programs ���������������������������������������������

Adjustments for disaster costs 2�����������������������������������������������������
Joint Committee enforcement 3������������������������������������������������������

2,487

350
529

Medicaid �������������������������������������������������������������������������������������
Other mandatory programs �������������������������������������������������������

376

240

616

3,336

116
43

37

21

97

10

50

244

798

293

1,628

3,952

2
.........

367
608

589

540

Social Security ����������������������������������������������������������������������������

Medicare �������������������������������������������������������������������������������������

924

1,223

595
627

2016

882

Subtotal, appropriated programs ������������������������������������������

Mandatory programs:

1,165

Defense ���������������������������������������������������������������������������������������
Non-defense ��������������������������������������������������������������������������������

Appropriated (“discretionary”) programs:

Outlays:

2015

308

304

265

390

655

3,615

3,477
612

44
57

42

24

105

11

46

264

864

364

1,793

4,270

8
–73

390

2,681

398
647

611

1,025

1,265

638
626

2018

65
58

40

22

86

10

49

253

827

343

1,724

4,089

6
–9

304

2,574

377
629

602

967

1,215

601
614

2017

(In billions of dollars)

312

473

785

3,783

38
59

44

25

106

11

46

276

899

401

1,878

4,568

8
–96

473

2,879

424
692

674

1,089

1,304

666
638

2019

267

547

814

4,006

42
62

46

26

108

12

47

287

934

454

1,988

4,820

9
–104

547

3,038

444
712

725

1,157

1,330

683
648

2020

272

609

881

4,204

48
65

48

28

114

12

48

302

983

461

2,095

5,085

9
–107

609

3,217

469
742

781

1,224

1,356

696
660

2021

386

669

1,055

4,400

55
68

49

30

117

13

48

317

1,031

467

2,205

5,455

10
–56

669

3,457

496
786

879

1,297

1,376

702
674

2022

Table S–4.  Adjusted Baseline by Category 1

390

729

1,120

4,593

60
71

51

31

120

13

49

331

1,075

471

2,319

5,713

10
–36

729

3,601

525
791

912

1,373

1,408

719
689

2023

359

783

1,143

4,801

65
74

53

33

124

14

50

347

1,127

478

2,437

5,943

10
–29

783

3,738

555
794

936

1,454

1,441

736
705

2024

435

838

1,273

5,012

69
75

54

36

128

15

51

362

1,176

486

2,559

6,286

10
–36

838

4,000

589
828

1,046

1,538

1,474

753
721

2025

6,954
6,713

2,112
3,422

3,393

4,908
7,497

8,281

5,463 12,750

6,461 13,667

3,275
3,186

2017– 2017–
2021 2026

40
–390

2,323

90
–554

6,243

237
302

219

126

520

56

235

1,383

560
667

483

294

1,142

127

486

3,122

4,507 10,152

4,419

9,478 21,686
2,023

514

901

1,415

1,425

2,323

3,748

3,510

6,243

9,753

5,247 19,084 43,137

74
78

56

38

134

16

52

381

1,236

495

2,688

6,662 22,832 52,890

10
–7

901

4,250 14,389 33,436

632
878

1,114

1,626

1,509

771
738

2026

Totals

120
SUMMARY TABLES

607
556

–7

623

2016

611
531

4

608

2017

664
566

21

634

2018

678
579

45

741

2019

693
591

77

737

2020

709
603

93

788

2021

726
618

116

939

2022

743
633

148

972

2023

761
649

176

966

2024

780
665

210

1,064

2025

798
681

236

1,179

2026

3,346
2,871

239

3,508

2017–
2021

7,154
6,116

1,125

8,628

2017–
2026

Totals

1

Total, appropriated funding ������������������������������������������������������� 1,113 1,163 1,142 1,230 1,257 1,285 1,312 1,344 1,376 1,410 1,444 1,479 6,216 13,270
See Table S–8 for information on adjustments to the Balanced Budget and Emergency Deficit Control Act (BBEDCA) baseline.
2
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form of
discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.
3
Consists of mandatory sequestration for 2017–2025 and discretionary cap reductions for 2018–2021.
4
Excludes discretionary cap reductions for Joint Committee enforcement.

Defense �������������������������������������������������������������������������������������������
Non-defense ������������������������������������������������������������������������������������

586
527

–27

Off-budget deficit / surplus (–) �������������������������������������������������������

Memorandum, budget authority for appropriated programs: 4

466

On-budget deficit ����������������������������������������������������������������������������

2015

(In billions of dollars)

Table S–4.  Adjusted Baseline by Category 1—Continued

THE BUDGET FOR FISCAL YEAR 2017

121

924
589
367
607
.........

882
540
350
529
.........
2,301
223
.........
3,688

Subtotal, mandatory programs ���������������������������������������������
Net interest ������������������������������������������������������������������������������������
Adjustments for disaster costs 1 �����������������������������������������������������

Total outlays �������������������������������������������������������������������������������

798
244
50
10
97
21
37
116
43
.........
3,336

770
234
51
10
98
19
35
96
51
.........
3,250
438
223
215
466
–27

Deficit ������������������������������������������������������������������������������������������������
Net interest ������������������������������������������������������������������������������������
Primary deficit / surplus (–) �����������������������������������������������������
On-budget deficit ����������������������������������������������������������������������������
Off-budget deficit / surplus (–) �������������������������������������������������������

616
240
376
624
–8

1,628
293

1,541
344

Receipts:
Individual income taxes �����������������������������������������������������������������
Corporation income taxes ��������������������������������������������������������������
Social insurance and retirement receipts:
Social Security payroll taxes ����������������������������������������������������
Medicare payroll taxes ��������������������������������������������������������������
Unemployment insurance ���������������������������������������������������������
Other retirement ������������������������������������������������������������������������
Excise taxes ������������������������������������������������������������������������������������
Estate and gift taxes ����������������������������������������������������������������������
Customs duties �������������������������������������������������������������������������������
Deposits of earnings, Federal Reserve System �����������������������������
Other miscellaneous receipts ��������������������������������������������������������
Allowance for immigration reform ������������������������������������������������
Total receipts ������������������������������������������������������������������������������

3,951

2,487
240
2

1,223

595
627

1,165

583
581

Subtotal, appropriated programs ������������������������������������������
Mandatory programs:
Social Security ����������������������������������������������������������������������������
Medicare �������������������������������������������������������������������������������������
Medicaid �������������������������������������������������������������������������������������
Other mandatory programs �������������������������������������������������������
Allowance for immigration reform ��������������������������������������������

Outlays:
Appropriated (“discretionary”) programs:
Defense ���������������������������������������������������������������������������������������
Non-defense ��������������������������������������������������������������������������������

503
303
201
502
2

827
254
50
10
110
22
40
65
58
1
3,644

1,788
419

4,147

2,606
303
6

967
598
386
651
5

1,233

608
625

454
385
69
433
21

863
265
52
11
143
32
40
44
58
7
3,899

1,891
493

4,352

2,741
385
8

1,025
601
405
700
10

1,219

589
629

549
460
90
506
44

898
278
53
11
153
34
41
38
60
20
4,095

1,985
525

4,644

2,950
460
8

1,089
656
426
764
15

1,226

591
635

534
523
11
458
76

932
289
54
12
165
37
42
42
63
30
4,346

2,106
575

4,880

3,112
523
9

1,156
695
450
790
20

1,236

597
639

552
574
–22
460
92

980
304
56
12
178
40
44
48
66
40
4,572

2,222
582

5,124

3,292
574
9

1,223
744
474
831
20

1,249

603
646

660
621
39
544
115

1,028
319
57
13
189
43
45
55
69
45
4,756

2,339
554

5,415

3,532
621
10

1,295
833
501
878
25

1,253

602
651

677
668
9
529
147

1,072
333
60
13
193
47
47
60
71
55
4,949

2,461
537

5,626

3,675
668
10

1,375
857
528
887
30

1,274

614
660

650
706
–56
475
175

1,124
349
60
14
196
51
48
65
74
64
5,177

2,586
546

5,827

3,813
706
10

1,452
870
559
897
35

1,297

626
671

741
744
–3
532
209

1,173
364
61
15
201
55
49
69
76
74
5,411

2,716
556

6,152

4,077
744
10

1,536
974
593
934
40

1,322

638
684

Totals

6,117
6,538

5,461 12,740
3,294 7,858
2,140 4,952
3,737 8,315
70
250

6,162 12,655

2,987
3,175

2017– 2017–
2021 2026

9,992 22,948
2,594 5,355

793
787
6
558
235

2,593
2,244
349
2,358
235

6,113
5,769
344
4,997
1,116

1,232 4,500 10,129
383 1,389 3,137
64
265
568
16
56
127
206
748 1,734
60
164
421
50
207
445
74
237
560
78
304
673
84
98
420
5,669 20,555 46,517

2,853
568

6,462 23,148 52,630

4,318 14,702 34,116
787 2,244 5,769
10
40
90

1,624
1,030
631
983
50

1,348

650
698

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

(In billions of dollars)

Table S–5.  Proposed Budget by Category

122
SUMMARY TABLES

2017– 2017–
2021 2026

Totals

Memorandum, budget authority for appropriated programs:
Defense ���������������������������������������������������������������������������������������
586
607
610
584
593
599
614
624
636
648
661
674 3,000 6,243
Non-defense ��������������������������������������������������������������������������������
527
556
540
561
570
575
590
589
601
613
626
639 2,836 5,904
Total, appropriated funding ��������������������������������������������������� 1,113 1,163 1,149 1,145 1,163 1,174 1,205 1,213 1,237 1,261 1,287 1,313 5,836 12,147
1
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form of
discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

(In billions of dollars)

Table S–5.  Proposed Budget by Category—Continued

THE BUDGET FOR FISCAL YEAR 2017

123

5.0
3.2
2.0
3.3
.........

5.0
3.0
2.0
3.0
.........
12.9
1.3
.........
20.7

Subtotal, mandatory programs ���������������������������������������������
Net interest ������������������������������������������������������������������������������������
Adjustments for disaster costs 1 �����������������������������������������������������

Total outlays �������������������������������������������������������������������������������

4.3
1.3
0.3
0.1
0.5
0.1
0.2
0.6
0.2
.........
18.1

4.3
1.3
0.3
0.1
0.6
0.1
0.2
0.5
0.3
.........
18.3
2.5
1.3
1.2
2.6
–0.2

Deficit ������������������������������������������������������������������������������������������������
Net interest ������������������������������������������������������������������������������������
Primary deficit / surplus (–) �����������������������������������������������������
On-budget deficit ����������������������������������������������������������������������������
Off-budget deficit / surplus (–) �������������������������������������������������������

3.3
1.3
2.0
3.4
–*

8.8
1.6

8.7
1.9

Receipts:
Individual income taxes �����������������������������������������������������������������
Corporation income taxes ��������������������������������������������������������������
Social insurance and retirement receipts:
Social Security payroll taxes ����������������������������������������������������
Medicare payroll taxes ��������������������������������������������������������������
Unemployment insurance ���������������������������������������������������������
Other retirement ������������������������������������������������������������������������
Excise taxes ������������������������������������������������������������������������������������
Estate and gift taxes ����������������������������������������������������������������������
Customs duties �������������������������������������������������������������������������������
Deposits of earnings, Federal Reserve System �����������������������������
Other miscellaneous receipts ��������������������������������������������������������
Allowance for immigration reform ������������������������������������������������
Total receipts ������������������������������������������������������������������������������

21.4

13.5
1.3
*

6.6

3.2
3.4

6.5

3.3
3.3

2016

Subtotal, appropriated programs ������������������������������������������
Mandatory programs:
Social Security ����������������������������������������������������������������������������
Medicare �������������������������������������������������������������������������������������
Medicaid �������������������������������������������������������������������������������������
Other mandatory programs �������������������������������������������������������
Allowance for immigration reform ��������������������������������������������

Outlays:
Appropriated (“discretionary”) programs:
Defense ���������������������������������������������������������������������������������������
Non-defense ��������������������������������������������������������������������������������

2015

2.6
1.6
1.0
2.6
*

4.3
1.3
0.3
0.1
0.6
0.1
0.2
0.3
0.3
*
18.9

9.3
2.2

21.5

13.5
1.6
*

5.0
3.1
2.0
3.4
*

6.4

3.1
3.2

2017

2.3
1.9
0.3
2.1
0.1

4.3
1.3
0.3
0.1
0.7
0.2
0.2
0.2
0.3
*
19.4

9.4
2.4

21.6

13.6
1.9
*

5.1
3.0
2.0
3.5
*

6.1

2.9
3.1

2018

(As a percent of GDP)

2.6
2.2
0.4
2.4
0.2

4.3
1.3
0.3
0.1
0.7
0.2
0.2
0.2
0.3
0.1
19.5

9.4
2.5

22.1

14.0
2.2
*

5.2
3.1
2.0
3.6
0.1

5.8

2.8
3.0

2019

2.4
2.4
0.1
2.1
0.3

4.3
1.3
0.2
0.1
0.8
0.2
0.2
0.2
0.3
0.1
19.8

9.6
2.6

22.3

14.2
2.4
*

5.3
3.2
2.1
3.6
0.1

5.6

2.7
2.9

2020

2.4
2.5
–0.1
2.0
0.4

4.3
1.3
0.2
0.1
0.8
0.2
0.2
0.2
0.3
0.2
20.0

9.7
2.5

22.4

14.4
2.5
*

5.3
3.3
2.1
3.6
0.1

5.5

2.6
2.8

2021

2.8
2.6
0.2
2.3
0.5

4.3
1.3
0.2
0.1
0.8
0.2
0.2
0.2
0.3
0.2
19.9

9.8
2.3

22.7

14.8
2.6
*

5.4
3.5
2.1
3.7
0.1

5.2

2.5
2.7

2022

2.7
2.7
*
2.1
0.6

4.3
1.3
0.2
0.1
0.8
0.2
0.2
0.2
0.3
0.2
19.9

9.9
2.2

22.6

14.8
2.7
*

5.5
3.4
2.1
3.6
0.1

5.1

2.5
2.6

2023

2.5
2.7
–0.2
1.8
0.7

4.3
1.3
0.2
0.1
0.8
0.2
0.2
0.2
0.3
0.2
19.9

9.9
2.1

22.4

14.7
2.7
*

5.6
3.3
2.2
3.4
0.1

5.0

2.4
2.6

2024

Table S–6.  Proposed Budget by Category as a Percent of GDP

2.7
2.7
–*
2.0
0.8

4.3
1.3
0.2
0.1
0.7
0.2
0.2
0.3
0.3
0.3
20.0

10.0
2.1

22.7

15.0
2.7
*

5.7
3.6
2.2
3.4
0.1

4.9

2.4
2.5

2025

2.8
2.8
*
2.0
0.8

4.4
1.4
0.2
0.1
0.7
0.2
0.2
0.3
0.3
0.3
20.0

10.1
2.0

22.8

15.3
2.8
*

5.7
3.6
2.2
3.5
0.2

4.8

2.3
2.5

2026

Averages

2.5
2.1
0.4
2.3
0.2

4.3
1.3
0.3
0.1
0.7
0.2
0.2
0.2
0.3
0.1
19.5

9.5
2.5

22.0

13.9
2.1
*

5.2
3.1
2.0
3.5
0.1

5.9

2.8
3.0

2.6
2.4
0.2
2.1
0.4

4.3
1.3
0.2
0.1
0.7
0.2
0.2
0.2
0.3
0.2
19.7

9.7
2.3

22.3

14.4
2.4
*

5.4
3.3
2.1
3.5
0.1

5.4

2.6
2.8

2017– 2017–
2021 2026

124
SUMMARY TABLES

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2017– 2017–
2021 2026

Averages

Memorandum, budget authority for
appropriated programs:
Defense ���������������������������������������������������������������������������������������
3.3
3.3
3.2
2.9
2.8
2.7
2.7
2.6
2.6
2.5
2.4
2.4
2.9
2.7
Non-defense ��������������������������������������������������������������������������������
3.0
3.0
2.8
2.8
2.7
2.6
2.6
2.5
2.4
2.4
2.3
2.3
2.7
2.5
Total, appropriated funding ���������������������������������������������������
6.2
6.3
6.0
5.7
5.5
5.4
5.3
5.1
5.0
4.9
4.7
4.6
5.6
5.2
*0.05 percent of GDP or less.
1
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form of
discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

2015

(As a percent of GDP)

Table S–6.  Proposed Budget by Category as a Percent of GDP—Continued

THE BUDGET FOR FISCAL YEAR 2017

125

608
625

2,606
303
6
4,147

Other mandatory programs �������������������������������������������������������������������������
Allowance for immigration reform ��������������������������������������������������������������

Subtotal, mandatory programs ���������������������������������������������������������������

Net interest �������������������������������������������������������������������������������������������������������
Adjustments for disaster costs 1 ������������������������������������������������������������������������

Total outlays �������������������������������������������������������������������������������������������������

1,788

2,662

651
5

Medicaid �������������������������������������������������������������������������������������������������������

22
40
65
58
1
3,644
503
303
201
502
2

Estate and gift taxes �����������������������������������������������������������������������������������������

Customs duties ��������������������������������������������������������������������������������������������������

Deposits of earnings, Federal Reserve System ������������������������������������������������

Other miscellaneous receipts ���������������������������������������������������������������������������

Allowance for immigration reform �������������������������������������������������������������������

Total receipts ������������������������������������������������������������������������������������������������

Deficit �������������������������������������������������������������������������������������������������������������������

Net interest �������������������������������������������������������������������������������������������������������

Primary deficit / surplus (–) ������������������������������������������������������������������������

On-budget deficit �����������������������������������������������������������������������������������������������

Off-budget deficit / surplus (–) ��������������������������������������������������������������������������

10

10
110

Other retirement ������������������������������������������������������������������������������������������

Excise taxes �������������������������������������������������������������������������������������������������������

50

50

Unemployment insurance ���������������������������������������������������������������������������

20

420

67

373

440

3,786

7

56

43

39

31

139

258

254

Social Security payroll taxes ����������������������������������������������������������������������

Medicare payroll taxes ��������������������������������������������������������������������������������

838

478

1,836

4,226

373
7

393

827

419

Corporation income taxes ���������������������������������������������������������������������������������

Social insurance and retirement receipts

Individual income taxes ������������������������������������������������������������������������������������

Receipts:

680
10

386

Medicare �������������������������������������������������������������������������������������������������������

583

598

Social Security ����������������������������������������������������������������������������������������������

996

1,183

572
611

2018

967

1,233

Subtotal, appropriated programs ������������������������������������������������������������

Mandatory programs:

Defense ���������������������������������������������������������������������������������������������������������
Non-defense ��������������������������������������������������������������������������������������������������

Appropriated (“discretionary”) programs:

Outlays:

2017

41

476

84

432

517

3,853

19

56

36

39

32

144

10

50

261

845

494

1,868

4,370

432
8

2,776

719
14

400

617

1,025

1,153

556
598

2019

70

417

10

477

487

3,962

27

57

38

39

33

150

11

50

263

850

524

1,920

4,449

477
8

2,837

721
18

410

634

1,054

1,127

544
583

2020

(In billions of constant dollars, adjusted for population growth)

81

407

–19

507

488

4,038

35

58

42

39

35

157

11

49

268

866

514

1,963

4,526

507
8

2,907

734
18

419

657

1,082

1,103

533
571

2021

99

466

33

531

565

4,070

39

59

47

39

37

162

11

49

273

879

474

2,002

4,635

531
8

3,023

752
21

429

713

1,108

1,072

515
557

2022

122

439

8

554

562

4,105

46

59

50

39

39

160

11

50

276

889

445

2,041

4,667

554
8

3,048

736
25

438

711

1,138

1,056

509
547

2023

141

382

–45

568

523

4,164

51

60

52

38

41

158

11

48

281

904

439

2,080

4,687

568
8

3,067

721
28

450

700

1,168

1,044

504
540

2024

Table S–7.  Proposed Budget in Population– and Inflation–Adjusted Dollars

163

415

–2

580

578

4,222

58

59

54

38

43

157

12

48

284

915

434

2,119

4,800

580
8

3,181

728
31

463

760

1,199

1,031

498
534

2025

178

423

5

596

600

4,292

64

59

56

38

46

156

12

48

290

933

430

2,160

4,892

596
8

3,268

744
38

478

779

1,230

1,020

492
528

2026

126
SUMMARY TABLES

610
540

1.00

Subtotal, appropriated programs ����������������������������������������������������������������

1.02
1.03

1.01

1,112

568
544

2018

1.04
1.06

1.02

1,094

558
536

2019

1.07
1.10

1.03

1,070

546
525

2020

1.09
1.13

1.04

1,064

543
521

2021

1.12
1.17

1.05

1,038

534
504

2022

1.14
1.21

1.06

1,026

528
499

2023

1.17
1.24

1.07

1,014

521
493

2024

1.19
1.28

1.07

1,004

516
488

2025

1.22
1.32

1.08

994

510
484

2026

These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form of
discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

Inflation �������������������������������������������������������������������������������������������������������������
Population and Inflation ������������������������������������������������������������������������������

1

1.00
1.00

Population ����������������������������������������������������������������������������������������������������������

Memorandum, population and inflation indexes:

1,149

Non-defense �������������������������������������������������������������������������������������������������������

Defense ��������������������������������������������������������������������������������������������������������������

Memorandum, budget authority for appropriated programs:

2017

(In billions of constant dollars, adjusted for population growth)

Table S–7.  Proposed Budget in Population– and Inflation–Adjusted Dollars—Continued

THE BUDGET FOR FISCAL YEAR 2017

127

–4
4
.........
.........
.........
.........

Reclassify surface transportation outlays:
Remove outlays from appropriated category���������������������������������
Add outlays to mandatory category ����������������������������������������������
Subtotal ��������������������������������������������������������������������������������������

Total program adjustments �����������������������������������������������������������

Debt service on adjustments ���������������������������������������������������������

Total adjustments ����������������������������������������������������������������������

2

*

2

–4
4
.........

.........
2

–24

–*

–24

–4
4
.........

–2
6

–27

–64

–1

–62

–5
5
.........

–3
8

–67

–3
–64

–90

–4

–86

–5
5
.........

–6
8

–89

7
–96

875

2019

–103

–8

–95

–5
5
.........

–8
9

–97

7
–104

917

2020

–12

–101

–5
5
.........

–8
9

–102

5
–107

994

2021

–15

–51

–5
5
.........

–8
10

–52

4
–56

1,121

2022

1,055

.........
.........

Adjustments for emergency and disaster costs:
Remove non-recurring emergency costs ���������������������������������������
Add placeholder for future emergency costs 3�������������������������������

.........

–27
.........

719

2018

Adjusted baseline deficit ��������������������������������������������������������������
438
616
612
655
785
814
881
*$500 million or less.
1
Includes adjustments for discretionary and mandatory program integrity.
2
Consists of mandatory sequestration for 2018–2025 and discretionary cap reductions for 2018–2021.
3
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction.

.........

Subtotal ��������������������������������������������������������������������������������������

.........
.........

636

2017

–66

.........
.........

Adjustments for provisions contained in the Budget Control Act:
Set discretionary budget authority at cap levels 1�������������������������
Reflect Joint Committee enforcement 2������������������������������������������

615

2016

–113

438

BBEDCA baseline deficit ��������������������������������������������������������������

2015

(Deficit increases (+) or decreases (-) in billions of dollars)

1,120

–47

–17

–30

–5
5
.........

–8
10

–32

4
–36

1,167

2023

1,143

–43

–18

–24

–5
5
.........

–9
10

–26

3
–29

1,185

2024

Table S–8.  Bridge from Balanced Budget and Emergency Deficit
Control Act (BBEDCA) Baseline to Adjusted Baseline

1,273

–52

–20

–32

–5
5
.........

–9
10

–33

3
–36

1,325

2025

1,415

–25

–21

–4

–5
5
.........

–9
10

–5

2
–7

1,440

2026

3,748

–394

–26

–368

–24
24
.........

–26
40

–381

–11
–371

9,753

–627

–117

–510

–48
48
.........

–70
90

–530

5
–535

4,141 10,380

2016– 2016–
2020 2025

Totals

128
SUMMARY TABLES

Mandatory Initiatives and Savings:
Legislative Branch:
Provide additional funding for the World War
I Centennial Commission ���������������������������
Agriculture:
Reduce premium subsidies for harvest price
revenue protection and improve prevented
planting coverage ����������������������������������������
Reauthorize Secure Rural Schools �����������������
Enact Food Safety and Inspection Service
(FSIS) fee �����������������������������������������������������
Enact biobased labeling fee ����������������������������
Enact Grain Inspection, Packers, and Stockyards Administration (GIPSA) fee �������������
Enact Animal Plant and Health Inspection
Service (APHIS) fee ������������������������������������
Enact Natural Resource and Conservation
Service (NRCS) Conservation User Fee �����
Establish Rural Housing Service Guaranteed
Underwriting System Fee ���������������������������
Fund the Agriculture and Food Research
Initiative at the authorized level of $700
million ����������������������������������������������������������
Create State option to improve Supplemental
Nutrition Assistance Program (SNAP)
access for elderly �����������������������������������������
Establish a summer Electronic Benefits
Transfer program ����������������������������������������
Increase The Emergency Food Assistance
Program funding to equal 2015 levels �������
Modify SNAP simplified reporting requirements to include out-of-State moves ����������
Total, Agriculture ����������������������������������������
Commerce:
Enact Scale-Up Manufacturing Investment
Initiative 1 ����������������������������������������������������
Create National Network for Manufacturing
Innovation ���������������������������������������������������
Recapitalize National Oceanic and Atmospheric Administration research fleet ��������
Renovate lab facilities at the National Institute of Standards and Technology (NIST) �
Support Lab to Market efforts in the Economic Development Administration ����������
Total, Commerce ������������������������������������������
6

2017

–1,259
178
–4
.........
–30
–20
.........
.........
16
10
127
30
.........
–952
.........
.........
70
12
30
112

.........

2016

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

7

15
309

14

25

100

155

.........
–1,062

35

214

23

114

.........

.........

–27

–30

–4
.........

–1,575
188

2018

6

5
591

16

5

200

365

.........
–1,224

50

326

36

114

.........

.........

–27

–30

–4
.........

–1,794
105

2019

.........
697

32

.........

300

365

.........
–1,206

50

462

44

81

.........

.........

–28

–30

–5
.........

–1,843
63

.........

2020

.........
731

16

.........

350

365

.........
–1,177

50

625

50

.........

.........

.........

–29

–30

–5
.........

–1,878
40

.........

2021

.........
360

10

.........

350

.........

.........
–789

50

1,053

57

.........

.........

.........

–30

–30

–5
.........

–1,891
7

.........

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

.........
300

.........

.........

300

.........

.........
–341

50

1,521

64

.........

.........

.........

–31

–30

–5
.........

–1,910
.........

.........

2023

.........
200

.........

.........

200

.........

.........
155

50

2,038

71

.........

.........

.........

–32

–30

–5
.........

–1,937
.........

.........

2024

Table S–9.  Mandatory and Receipt Proposals

.........
90

.........

.........

90

.........

.........
693

50

2,595

77

.........

.........

.........

–33

–30

–5
.........

–1,961
.........

.........

2025

.........
.........

.........

.........

.........

.........

.........
1,312

50

3,209

85

.........

.........

.........

–34

–30

–5
.........

–1,963
.........

.........

2026

50
2,440

90

100

950

1,250

.........
–5,621

215

1,754

163

325

.........

.........

–131

–150

–22
.........

–8,349
574

19

50
3,390

100

100

1,890

1,250

.........
–4,591

465

12,170

517

325

.........

.........

–291

–300

–47
.........

–18,011
581

19

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

129

Education:
Support Preschool for All ��������������������������������
Enact RESPECT: Best Job in the World ��������
Create Computer Science for All ��������������������
Fund America’s College Promise, including
grants to Historically Black Colleges and
Universities, Hispanic-Serving Institutions, and other Minority-Serving Institutions �������������������������������������������������������������
Enact Pell completion and reform policies ����
Shift mandatory funds to support Pell policies ���������������������������������������������������������������
Extend Pell CPI increase ��������������������������������
Implement College Opportunity and Graduation Bonus Program ������������������������������������
Reform student loan Income-Based Repayment plans 2 �������������������������������������������������
Reform teacher loan forgiveness benefits ������
Limit Federal revenue to 85 percent of total
revenue at for-profit universities (loan
effects) ����������������������������������������������������������
Reform and expand Perkins loan program ����
Total, Education ������������������������������������������
Energy:
Enact nuclear waste management program ��
Reauthorize special assessment from domestic nuclear utilities 3 ������������������������������������
Allow the United States Enrichment Corporation Fund to use balances to support
Uranium Enrichment Decontamination
and Decommissioning ���������������������������������
Provide additional research and development
(R&D) funding for Advanced Research
Project Agency-Energy Trust ����������������������
Provide additional R&D funding for Office of
Science ���������������������������������������������������������
Establish Southwestern Power Administration Purchase Power Drought Fund 4 ���������
Total, Energy �����������������������������������������������
Health and Human Services:
HHS health savings:
Medicare providers:
Encourage delivery system reform:
Allow the Secretary to introduce
primary care payments under the
Physician Fee Schedule in a budget
neutral manner �������������������������������
130
50
40

2017

38
65
–65
.........
104
–1,151
.........
.........
–305
–1,094
.........
–208

472
8
45
–15
302

.........

.........
.........
.........

2016

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........

.........

–15
587

45

39

674

–212

56

.........
–795
480

–2,220
.........

307

–248
186

847
248

1,235
200
720

2018

.........

5
385

7

102

394

–217

94

.........
–595
3,547

–3,294
.........

420

–238
920

1,616
238

3,110
300
1,070

2019

.........

–15
141

3

186

82

–222

107

–1
–497
7,372

–4,294
.........

600

–235
1,721

2,887
235

5,456
300
1,200

2020

.........

–2
244

.........

304

.........

–227

169

–4
–431
9,910

–5,083
112

635

–255
2,600

3,911
255

7,360
150
660

2021

.........

.........
419

.........

384

.........

–232

267

1
–404
12,676

–5,668
249

668

–277
3,528

5,249
277

8,773
.........
280

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

.........

.........
367

.........

371

.........

–237

233

–4
–408
14,781

–6,149
301

699

–307
4,492

6,033
307

9,787
.........
30

2023

.........

.........
350

.........

276

.........

–243

317

–2
–409
19,200

–6,713
322

731

–325
5,522

9,189
325

10,560
.........
.........

2024

.........

24
1,065

.........

174

.........

–248

1,115

3
–392
24,901

–7,058
337

765

–336
6,609

14,362
336

10,275
.........
.........

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

.........

–15
–1,919

.........

6

.........

–254

–1,656

–7
–339
27,350

–7,234
358

801

–349
7,746

16,669
349

9,356
.........
.........

2026

.........

–42
1,659

100

639

1,622

–1,086

426

–5
–2,623
20,215

–16,042
112

2,066

–1,041
5,427

9,299
1,041

17,291
1,000
3,690

.........

–33
1,941

100

1,850

1,622

–2,300

702

–14
–4,575
119,123

–48,864
1,679

5,730

–2,635
33,324

60,801
2,635

66,042
1,000
4,000

2017–2021 2017–2026

Totals

130
SUMMARY TABLES

Allow Accountable Care Organizations (ACOs) to pay beneficiaries
for primary care visits up to the
applicable Medicare cost sharing
amount ���������������������������������������������
Allow Centers for Medicare and
Medicaid Services (CMS) to assign
beneficiaries to Federally Qualified
Health Centers (FQHCs) and Rural
Health Centers (RHCs) participating in the Medicare Shared
Savings Program �����������������������������
Expand basis for beneficiary assignment for ACOs to include Nurse
Practitioners, Physician Assistants,
and Clinical Nurse Specialists �������
Establish quality bonus payments for
high-performing Part D plans ��������
Implement bundled payment for postacute care ����������������������������������������
Implement value-based purchasing
for skilled nursing facilities (SNFs),
home health agencies (HHAs), ambulatory surgical centers (ASCs),
hospital outpatient departments
(HOPDs), and community mental
health centers ����������������������������������
Establish a hospital-wide readmissions reduction measure �����������������
Extend accountability for hospital-acquired conditions �����������������������������
Encourage workforce development
through targeted and more accurate indirect medical education
payments �����������������������������������������
Allow the Secretary to determine
Hospital-Acquired Condition Reduction Program penalty amounts
and distribution ������������������������������
Establish a bonus payment for hospitals cooperating with certain alternative payment models (APMs) �����
Enhance competition in Medicare Advantage (MA):
Reform MA payments to increase the
efficiency and sustainability of the
program �������������������������������������������
Improve beneficiary access:
Eliminate the 190-day lifetime limit
on inpatient psychiatric facility
services ��������������������������������������������
.........

2017

.........

.........
.........
.........

.........
.........
.........

–1,170

.........
.........

.........

110

.........

2016

.........

.........
.........
.........

.........
.........
.........

.........

.........
.........

.........

.........

140

–960

.........

.........

–1,400

.........

.........

.........

.........

.........

.........

.........

–10

2018

150

–2,620

.........

.........

–1,490

.........

.........

.........

.........

.........

–10

.........

–10

2019

150

–7,160

.........

.........

–1,590

.........

.........

.........

.........

.........

–10

–10

–10

2020

160

–9,170

.........

.........

–1,700

.........

.........

.........

–470

.........

–20

–10

–10

2021

.........

.........

–1,960

.........

.........

.........

–1,790

.........

–20

–10

–10

2023

.........

.........

–2,090

.........

.........

.........

–2,010

.........

–20

–10

.........

2024

.........

.........

–2,220

.........

.........

.........

–2,170

.........

–20

–10

.........

2025

.........

.........

–2,350

.........

.........

.........

–2,330

.........

–30

–20

–10

2026

170

180

190

190

210

–9,910 –10,580 –11,350 –12,130 –13,360

.........

.........

–1,830

.........

.........

.........

–1,080

.........

–20

–10

–10

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

710

–19,910

.........

.........

–7,350

.........

.........

.........

–470

.........

–40

–20

–40

1,650

–77,240

.........

.........

–17,800

.........

.........

.........

–9,850

.........

–150

–80

–70

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

131

Repeal the rental cap for oxygen
equipment ����������������������������������������
Eliminate beneficiary coinsurance for
screening colonoscopies with polyp
removal ��������������������������������������������
Expand the ability of Medicare
Advantage organizations to pay for
services delivered via telehealth ����
Establish RHC and FQHC telehealth
services ��������������������������������������������
Cut waste, fraud, and improper payments in Medicare:
Suspend coverage and payment for
questionable Part D prescriptions and
incomplete clinical information ���������
Retain a portion of Medicare Recovery Audit Contractor (RAC)
recoveries to implement actions
that prevent fraud and abuse ���������
Allow prior authorization for Medicare fee-for-service items ����������������
Permit exclusion from Federal Health
Care Programs if affiliated with
sanctioned entities ��������������������������
Protect program integrity algorithms
from disclosure ��������������������������������
Allow the Secretary to reject claims
for new providers and suppliers
located outside moratorium areas ��
Allow civil monetary penalties for
providers and suppliers who fail to
update enrollment records ��������������
Allow collection of application fees
from individual providers and
suppliers ������������������������������������������
Assess a fee on physicians and
practitioners who order services or
supplies without proper documentation ������������������������������������������������
Establish gifting authority for the
Healthcare Fraud Prevention Partnership ���������������������������������������������
Establish registration process for
clearinghouses and billing agents ��
Pay recovery auditor after a Qualified Independent Contractor (QIC)
decision on appealed claims �����������
Publish the National Provider Identifier for covered recipients in the
Open Payments Program ����������������
.........

2017

160
.........
.........

.........

110
–5
.........
–9
–5
–2
.........

.........
.........
.........
.........
.........

.........

2016

.........
.........
.........

.........

.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........

.........

.........

.........

.........

.........

–2

–5

–9

.........

–5

130

–70

.........

.........

170

.........

2018

.........

.........

.........

.........

.........

.........

–3

–5

–9

.........

–5

70

–60

.........

–20

190

.........

2019

.........

.........

.........

.........

.........

.........

–3

–5

–9

–10

–5

–20

–70

.........

–20

200

.........

2020

.........

.........

.........

.........

.........

.........

–3

–5

–9

–10

–5

–120

–80

.........

–20

230

.........

2021

.........

.........

.........

.........

.........

.........

–3

–5

–9

–10

–10

–150

–80

.........

–20

250

.........

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

.........

.........

.........

.........

.........

.........

–4

–5

–9

–10

–10

–180

–90

.........

–20

270

.........

2023

.........

.........

.........

.........

.........

.........

–4

–5

–9

–10

–10

–200

–100

.........

–20

290

.........

2024

.........

.........

.........

.........

.........

.........

–4

–5

–9

–10

–10

–210

–110

.........

–20

320

.........

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

.........

.........

.........

.........

.........

.........

–4

–5

–9

–10

–10

–230

–120

.........

–20

350

.........

2026

.........

.........

.........

.........

.........

.........

–13

–25

–45

–20

–25

170

–280

.........

–60

950

.........

.........

.........

.........

.........

.........

.........

–32

–50

–90

–70

–75

–800

–780

.........

–160

2,430

.........

2017–2021 2017–2026

Totals

132
SUMMARY TABLES

Require a surety bond or escrow account to cover overturned recovery
auditor decisions �����������������������������
Address the rising cost of pharmaceuticals:
Align Medicare drug payment policies
with Medicaid policies for low-income beneficiaries ���������������������������
Accelerate manufacturer discounts
for brand drugs to provide relief
to Medicare beneficiaries in the
coverage gap ������������������������������������
Require mandatory reporting of other
prescription drug coverage �������������
Establish authority for a program to
prevent prescription drug abuse in
Medicare Part D ������������������������������
Allow the Secretary to negotiate
prices for biologics and high cost
prescription drugs ���������������������������
Modify reimbursement of Part B
drugs ������������������������������������������������
Require evidence development for
coverage of high cost drugs �������������
Increase Part D plan sponsors’ risk
for catastrophic drug costs �������������
Change the Part D coverage gap
discount program agreements from
annually to quarterly ����������������������
Enhance efficiency in the Medicare
program:
Reduce Medicare coverage of bad
debts �������������������������������������������������
Adjust payment updates for certain
post-acute care providers ����������������
Encourage appropriate use of
inpatient rehabilitation hospitals
by requiring that 75 percent of
inpatient rehabilitation facility
(IRF) patients require intensive
rehabilitation services ��������������������
Exclude certain services from the
in-office ancillary services exception ���������������������������������������������������
Reform Medicare hospice payments ��
Recoup initial Clinical Laboratory
Fee Schedule payments for advanced diagnostic laboratory tests
in excess of 100 percent of the final
payment amount �����������������������������
.........

2017

.........

.........
–10
.........
.........
.........
.........
.........
.........

–410
–1,600

–160
.........
.........

.........

.........

2016

.........

.........
.........
.........
.........
.........
.........
.........
.........

.........
.........

.........
.........
.........

.........

.........

–280
–170

–190

–2,100

–1,370

.........

.........

.........

–380

.........

.........

–30

–250

–2,930

.........

2018

.........

–440
–510

–200

–3,490

–2,620

.........

.........

.........

–680

.........

.........

–40

–640

–7,040

.........

2019

.........

2021

.........

2022

.........

2023

.........

2024

.........

2025

.........

2026

.........

–500
–910

–200

–5,120

–3,330

.........

.........

.........

–740

.........

.........

–40

–1,100

.........

–530
–1,000

–210

–6,850

–3,590

.........

.........

.........

–800

.........

.........

–50

–1,270

–4,060

.........

.........

.........

–950

.........

.........

–60

–1,330

–4,310

.........

.........

.........

–1,020

.........

.........

–60

–1,250

–4,570

.........

.........

.........

–1,110

.........

.........

–70

–1,460

–4,840

.........

.........

.........

–1,200

.........

.........

–70

–1,520

.........

–570
–1,100

–220

.........

–610
–1,210

–230

.........

–650
–1,340

–240

.........

–680
–1,430

–250

.........

–720
–1,580

–250

–9,120 –11,250 –13,420 –15,760 –17,870

–3,820

.........

.........

.........

–870

.........

.........

–50

–1,390

–8,800 –10,740 –12,420 –15,150 –18,450 –20,920 –24,800

.........

2020

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

.........

–1,750
–2,590

–960

–19,160

–11,320

.........

.........

.........

–2,600

.........

.........

–170

–3,260

–29,510

.........

.........

–4,980
–9,250

–2,150

–86,580

–32,920

.........

.........

.........

–7,750

.........

.........

–480

–10,210

–121,250

.........

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

133

Provide authority to expand competitive bidding for certain durable
medical equipment ��������������������������
Reduce Critical Access Hospital
(CAH) payments from 101 percent
of reasonable costs to 100 percent
of reasonable costs ��������������������������
Prohibit CAH designation for facilities that are less than 10 miles
from the nearest hospital ���������������
Other Medicare:
Strengthen the Independent Payment
Advisory Board (IPAB) to reduce
long-term drivers of Medicare cost
growth ����������������������������������������������
Clarify the calculation of the late
enrollment penalty for Medicare
Part B premiums �����������������������������
Clarify the Medicare Fraction in the
Medicare Disproportional Share
Hospital (DSH) statute �������������������
Update Medicare Disproportionate
Share formula for hospitals in
Puerto Rico ��������������������������������������
Allow beneficiaries to pay a sum certain to Medicare for future medical
items and services ���������������������������
Modernize funding for End Stage
Renal Disease Networks �����������������
Total, Medicare providers �������������������
Medicare structural reforms:
Increase income-related premiums
under Medicare Parts B and D �����������
Modify the Part B deductible for new
beneficiaries �����������������������������������������
Introduce home health copayments for
new beneficiaries ���������������������������������
Encourage the use of generic drugs by
low-income beneficiaries ���������������������
Total, Medicare structural reforms ����
Interactions �������������������������������������������������
Medicaid and Children’s Health Insurance
Program (CHIP):
Improve access to coverage and services:
Ensure access to enhanced Federal
match for all Medicaid Expansion
States �����������������������������������������������
.........

2017

–110
–60

.........
.........
.........
.........
.........
.........
–3,161
.........
.........
.........
.........
.........
33

430

.........

2016

.........
.........

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

.........

–20

.........

.........

.........

.........

–70

–140

–240

2019

–20

10

.........

.........

.........

–80

–150

–400

2020

–20

10

.........

.........

–1,067

–80

–160

–430

2021

.........

10

.........

.........

–1,417

–90

–170

–460

2022

.........

10

.........

.........

–6,940

–90

–180

–500

2023

–110

–210

–570

2025

–130

–230

–620

2026

.........

10

.........

.........

.........

10

.........

.........

.........

10

.........

.........

–6,021 –10,127 –10,822

–100

–190

–530

2024

470

–580
–580
1,171

.........

.........

.........

500

–830
–830
3,511

.........

.........

.........

540

–920
–2,880
4,583

–30

–60

–1,870

360

–1,000
–4,540
6,362

–70

–80

–3,390

250

–1,080
–6,180
6,268

–120

–320

–4,660

–230

–970

–8,040

–300

–1,130

–7,840

–380

–1,220

–9,190

60

.........

.........

.........

–1,170 –1,260 –1,340 –1,450
–8,030 –10,500 –10,610 –12,240
11,969 10,317 14,410 12,704

–170

–450

–6,240

.........
.........
.........
.........
.........
.........
.........
.........
.........
–9,926 –19,952 –29,952 –38,029 –44,414 –56,798 –62,929 –73,675 –82,590

–5

.........

.........

.........

.........

–70

–130

.........

2018

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

2,300

–3,330
–8,830
15,660

–100

–140

–5,260

.........
–101,020

–65

20

.........

.........

–1,067

–360

–690

–1,070

2,610

–9,630
–56,390
71,328

–1,300

–4,230

–41,230

.........
–421,426

–65

70

.........

.........

–36,394

–880

–1,670

–3,750

2017–2021 2017–2026

Totals

134
SUMMARY TABLES

Strengthen the integrity of the Medicaid
program:
Expand funding for the Medicaid
Integrity Program ���������������������������
Expand Medicaid Fraud Control Unit
(MFCU) authority review to additional care settings ��������������������������
Require States to suspend Medicaid
payments when there is a significant risk of fraud �����������������������������
Track high prescribers and utilizers
of prescription drugs in Medicaid ��
Prevent use of Federal funds to pay
State share of Medicaid or CHIP ���
Consolidate redundant error rate
measurement programs ������������������

Preserve coverage in CHIP:
Extend CHIP funding through 2019 3 ����
Extend the performance bonus fund ��
Extend the child enrollment contingency fund ���������������������������������������

Strengthen Medicaid in Puerto Rico
and other U.S. Territories ���������������
Permanently extend Express Lane
Eligibility (ELE) for children ����������
Require full coverage of preventive
health and tobacco cessation
services for adults in traditional
Medicaid ������������������������������������������
Require coverage of Early and Periodic Screening, Diagnostic, and
Treatment program for children
in inpatient psychiatric treatment
facilities �������������������������������������������
Create State option to provide
12-month continuous Medicaid
eligibility for adults 3 �����������������������
Extend 100 percent Federal match to
all Indian health programs �������������
Provide full Medicaid coverage to
pregnant and post-partum beneficiaries �����������������������������������������������
Create demonstration to address
over-prescription of psychotropic
medications for children in foster
care ��������������������������������������������������
Streamline certain Medicaid appeals
processes ������������������������������������������
Expand State flexibility to provide
benchmark benefit packages ����������
320

2017

35
467
6
30

119
.........
.........

.........

.........
.........
.........
.........

.........
.........
.........
.........
180

99

.........

–60

.........

–6
.........
–30
.........
.........

.........

.........

.........
.........

.........

.........

2016

.........
.........
.........
.........
.........

.........

.........

–50

.........

–6

–60

.........

514
350

.........

.........

216

30

6

851

40

95

30

1,433

2018

.........

.........

–80

.........

–6

–65

.........

2,158
350

.........

.........

221

35

7

1,300

45

91

50

1,771

2019

.........

.........

–80

.........

–7

–65

.........

–1,002
350

.........

.........

228

35

7

973

45

85

70

2,791

2020

.........

.........

–80

.........

–7

–65

.........

.........
170

.........

.........

235

35

8

1,140

50

80

85

3,000

2021

.........

.........

–90

.........

–7

–65

.........

.........
.........

.........

.........

88

40

8

1,097

50

75

100

3,219

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

.........

.........

–90

.........

–8

–70

.........

.........
.........

.........

.........

–14

40

9

1,156

55

70

115

3,468

2023

.........

.........

–90

.........

–8

–70

.........

.........
.........

.........

.........

–11

40

9

1,305

60

67

125

3,998

2024

.........

.........

–90

.........

–8

–75

.........

.........
.........

.........

.........

–9

45

10

1,351

60

64

140

4,297

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

.........

.........

–90

.........

–9

–80

.........

.........
.........

.........

.........

–6

45

10

1,495

65

63

155

5,347

2026

.........

.........

–320

.........

–32

–315

.........

1,670
1,400

.........

.........

1,019

165

34

4,731

215

450

235

9,315

.........

.........

–770

.........

–72

–675

.........

1,670
1,400

.........

.........

1,067

375

80

11,135

505

789

870

29,644

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

135

.........
.........
.........
.........
.........

.........
.........
14

7,610
210

.........
.........
7
255
.........

.........
.........
.........
.........
.........

.........
.........
.........

.........
.........

.........
.........
.........
.........
.........

.........

Strengthen Medicaid drug coverage and
reimbursement:
Create a Federal-State Medicaid negotiating pool for high-cost drugs ������������

–200

.........

.........

2017

Require manufacturers that improperly report items for Medicaid drug
coverage to fully repay States ��������
Increase penalties on drug manufacturers for fraudulent noncompliance with Medicaid drug rebate
agreements ��������������������������������������
Require drugs be properly listed with
the Food and Drug Administration
(FDA) to receive Medicaid coverage ��
Require drug wholesalers to report
wholesale acquisition costs to CMS ���
Enforce manufacturer compliance
with drug rebate requirements ������
Strengthen CMS compliance tools in
Medicaid managed care ������������������
Improve quality and cost-effectiveness:
Rebase future Medicaid Disproportionate Share Hospital (DSH)
allotments ����������������������������������������
Require remittances for medical loss
ratios for Medicaid and CHIP managed care ������������������������������������������
Extend funding for the Adult Health
Quality Measures Program ������������
Encourage delivery system reform:
Reestablish the Medicaid primary
care payment increase through CY
2017 and include additional providers ����������������������������������������������������
Allow States to develop age-specific
health home programs ��������������������
Provide home and community-based
services (HCBS) to children eligible
for psychiatric residential treatment facilities ����������������������������������
Allow full Medicaid benefits for
individuals in a HCBS State plan
option �����������������������������������������������
Expand eligibility for the 1915(i)
HCBS State plan option �����������������
Expand eligibility under the Community First Choice option ������������������
Pilot comprehensive long-term care
State plan option �����������������������������

2016

–410

753

296

15

1

78

210

1,900

14

.........

.........

.........

.........

.........

.........

.........

.........

2018

–630

779

319

24

1

161

90

.........

14

–100

.........

.........

.........

.........

.........

.........

.........

2019

–630

809

343

34

1

169

90

.........

14

–2,100

.........

.........

.........

.........

.........

.........

.........

2020

–640

840

368

44

1

177

90

.........

14

–2,900

.........

.........

.........

.........

.........

.........

.........

2021

–650

872

395

46

1

185

90

.........

.........

–3,100

.........

.........

.........

.........

.........

.........

.........

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

–660

.........

424

48

1

194

80

.........

.........

–3,400

.........

.........

.........

.........

.........

.........

.........

2023

–660

.........

455

50

1

204

80

.........

.........

–3,600

.........

.........

.........

.........

.........

.........

.........

2024

–670

.........

488

52

1

215

80

.........

.........

–4,000

.........

.........

.........

.........

.........

.........

.........

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

–680

.........

523

54

1

226

80

.........

.........

–4,300

–6,640

.........

.........

.........

.........

.........

.........

2026

–2,510

3,181

1,581

124

4

585

690

9,510

70

–5,100

.........

.........

.........

.........

.........

.........

.........

–5,830

4,053

3,866

374

9

1,609

1,100

9,510

70

–23,500

–6,640

.........

.........

.........

.........

.........

.........

2017–2021 2017–2026

Totals

136
SUMMARY TABLES

Correct Affordable Care Act (ACA)
Medicaid rebate formula for new
drug formulations and exempt abuse
deterrent formulations �����������������������
Exclude authorized generics from
Medicaid brand-name rebate
calculations ��������������������������������������
Exclude brand-name and authorized
generic drug prices from Medicaid
Federal upper limit (FUL) ��������������
Clarify the Medicaid definition of
brand drugs to prevent inappropriately low rebates �����������������������������
Additional improvements to the Medicaid drug rebate program ��������������
Total, Medicaid and Children’s Health
Insurance Program ���������������������������
Other health:
Medicare-Medicaid enrollees:
Ensure retroactive Part D coverage of
newly-eligible low-income beneficiaries �����������������������������������������������
Establish integrated appeals process
for Medicare-Medicaid enrollees ����
Allow for Federal/State coordinated
review of Duals Special Need Plan
marketing materials �����������������������
Align Medicare Savings Program
income and asset definitions with
Part D low-income subsidy definitions �������������������������������������������������
Total, Medicare-Medicaid enrollees 
Pharmaceutical savings:
Prohibit brand and generic drug
companies from delaying the availability of new generic drugs and
biologics �������������������������������������������
Modify length of exclusivity to facilitate faster development of generic
biologics �������������������������������������������
Establish transparency and reporting
requirements in pharmaceutical
drug pricing �������������������������������������
Total, pharmaceutical savings ��������
Public health and workforce
investments:
Support Teaching Health Centers
Graduate Medical Education
(GME) ����������������������������������������������
Support Children’s Hospital GME �����
–410

2017

–20
–30
–21
.........
9,005

.........
.........
.........

31
31

–920
.........
.........
–920

.........
130

.........

2016

.........
.........
.........
.........
.........

.........
.........
.........

.........
.........

.........
.........
.........
.........

.........
.........

74
269

.........
–1,010

.........

–1,010

32
32

.........

.........

.........

6,265

.........

–21

–60

–20

–410

2018

214
286

.........
–1,330

–230

–1,100

34
34

.........

.........

.........

6,489

.........

–21

–90

–20

–415

2019

141
292

.........
–1,800

–590

–1,210

35
45

.........

.........

10

2,139

.........

–26

–90

–20

–425

2020

99
295

.........
–2,070

–780

–1,290

38
48

.........

.........

10

2,434

.........

–26

–100

–20

–425

2021

.........
165

.........
–2,270

–870

–1,400

40
50

.........

.........

10

2,023

.........

–26

–100

–20

–435

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

.........
27

.........
–2,520

–1,020

–1,500

42
52

.........

.........

10

892

.........

–26

–100

–20

–440

2023

.........
9

.........
–2,690

–1,080

–1,610

45
65

.........

.........

20

1,364

.........

–31

–100

–20

–440

2024

.........
2

.........
–2,870

–1,140

–1,730

48
68

.........

.........

20

1,360

.........

–31

–100

–20

–440

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

.........
.........

.........
–3,110

–1,250

–1,860

51
71

.........

.........

20

–4,337

.........

–31

–100

–20

–445

2026

528
1,272

.........
–7,130

–1,600

–5,530

170
190

.........

.........

20

26,332

.........

–115

–370

–100

–2,085

528
1,475

.........
–20,590

–6,960

–13,630

396
496

.........

.........

100

27,634

.........

–260

–870

–200

–4,285

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

137

Invest in the National Health Service
Corps ������������������������������������������������
Extend Health Centers �����������������������
Extend special diabetes program at
National Institutes of Health (NIH)
and the Indian Health Service
(IHS) permanently ��������������������������
Fund a dedicated Mental Health
Initiative ������������������������������������������
Expand access to treatment for
prescription drug abuse and heroin
use ����������������������������������������������������
Total, public health and workforce
investments ���������������������������������
Medicare appeals:
Provide Office of Medicare Hearings
and Appeals and Department Appeals Board authority to use RAC
collections ����������������������������������������
Establish Medicare appeals refundable filing fee �����������������������������������
Remand appeals to the redetermination level with the introduction of
new evidence �����������������������������������
Sample and consolidate similar claims
for administrative efficiency �������������
Increase minimum amount in controversy for administrative law judge
(ALJ) adjudication of claims to
equal amount required for judicial
review ����������������������������������������������
Establish magistrate adjudication for
claims with amount in controversy
below new ALJ amount in controversy threshold ��������������������������������
Expedite procedures for claims with
no material fact in dispute �������������
Total, Medicare appeals ������������������
Health information technology (IT):
Add certain behavioral health providers to the Electronic Health Record
(EHR) Incentive Programs �������������
Establish health IT governance certification ���������������������������������������������
Prohibit information blocking and
associated business practices ���������
Require health IT transparency ���������
.........
75

2017

.........
87
154
446

127
.........
.........
.........

.........

.........
.........
127

.........
.........
.........
.........

.........
.........

2016

.........
.........
.........
.........

.........
.........
.........
.........

.........

.........
.........
.........

.........
.........
.........
.........

.........
.........

.........

1,710

.........
127

.........

.........

.........

.........

.........

127

3,261

426

218

180

227
1,867

2018

.........
.........

.........

910

.........
127

.........

.........

.........

.........

.........

127

5,354

321

150

266

729
3,388

2019

.........
.........

.........

910

.........
127

.........

.........

.........

.........

.........

127

3,294

68

37

291

770
1,695

2020

.........
.........

.........

920

.........
127

.........

.........

.........

.........

.........

127

1,479

25

8

296

575
181

2021

.........
.........

.........

490

.........
127

.........

.........

.........

.........

.........

127

658

6

.........

298

81
108

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

.........
.........

.........

270

.........
127

.........

.........

.........

.........

.........

127

403

.........

.........

300

40
36

2023

.........
.........

.........

–10

.........
127

.........

.........

.........

.........

.........

127

317

.........

.........

300

8
.........

2024

.........
.........

.........

.........

.........
127

.........

.........

.........

.........

.........

127

302

.........

.........

300

.........
.........

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

.........
.........

.........

.........

.........
127

.........

.........

.........

.........

.........

127

300

.........

.........

300

.........
.........

2026

.........
.........

.........

4,450

.........
635

.........

.........

.........

.........

.........

635

13,834

994

500

1,033

2,301
7,206

.........
.........

.........

5,200

.........
1,270

.........

.........

.........

.........

.........

1,270

15,814

1,000

500

2,531

2,430
7,350

2017–2021 2017–2026

Totals

138
SUMMARY TABLES

Provide the Office of the National
Coordinator for Health IT (ONC)
authority to use contracts, grants,
or cooperative agreements to establish a Health IT Safety Collaborative and provide adequate confidentiality protections ����������������������������
Total, Health information
technology ������������������������������������
Program implementation investments:
Provide CMS Program Management
implementation funding �����������������
Allow CMS to reinvest civil monetary
penalties recovered from home
health agencies ��������������������������������
Allow CMS to assess a fee on Medicare providers for payments subject
to the Federal Payment Levy
Program �������������������������������������������
Total, program implementation
investments ���������������������������������
Private health insurance:
Standardize definition of American
Indian and Alaska Native in the
ACA ��������������������������������������������������
Increase access to consumer protections in non-Federal governmental
self-insured health plans ����������������
Eliminate surprise out-of-network
health care charges for privately
insured patients ������������������������������
Develop uniform and transparent
consumer health care bills ��������������
Total, private health insurance ������
Total, HHS health savings 5 ��������������������
Provide mandatory funding for tribal contract support costs:
PAYGO effects ���������������������������������������������
Nonscoreable reclassification ���������������������
Total, provide mandatory funding for
tribal contract support costs ���������������
Annual reduction to discretionary spending limits (non-add) ��������������������������������
Support medical research and development
at the National Institutes of Health and
the FDA��������������������������������������������������������
Promote family based care �����������������������������
Enhance support for tribal child welfare
programs ������������������������������������������������������
.........

2017

.........
25
1

.........
26

30
.........
.........
.........
30
5,617
.........
.........
.........
.........
562
76
37

.........

2016

.........
.........
.........

.........
.........

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

34

1,004
45

–814

925

111
814

1,391

.........
40

.........

.........

40

301

.........

1

300

1,710

.........

2018

.........
50

.........

.........

50

1

.........

1

.........

910

.........

2020

.........
50

.........

.........

50

1

.........

1

.........

920

.........

2021

.........
50

.........

.........

50

1

.........

1

.........

490

.........

2022

.........
60

.........

.........

60

1

.........

1

.........

270

.........

2023

.........
60

.........

.........

60

1

.........

1

.........

–10

.........

2024

.........
60

.........

.........

60

1

.........

1

.........

.........

.........

2025

.........
70

.........

.........

70

1

.........

1

.........

.........

.........

2026

38

252
20

–831

1,100

269
831

32

48
7

–847

1,300

453
847

27

26
–9

–864

864

.........
864

14

8
–23

–882

882

.........
882

14

.........
–36

–899

899

.........
899

16

.........
–44

–917

917

.........
917

16

.........
–52

–935

935

.........
935

14

.........
–52

–954

954

.........
954

–5,561 –23,483 –33,218 –43,197 –53,574 –63,878 –70,827 –89,004

.........
50

.........

.........

50

76

.........

1

75

910

.........

2019

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

168

1,892
139

–3,356

4,189

833
3,356

–55,254

.........
220

.........

.........

220

405

.........

5

400

4,450

.........

242

1,900
–68

–7,943

8,776

833
7,943

–375,734

.........
520

.........

.........

520

410

.........

10

400

5,200

.........

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

139

Extend and Expand the Maternal, Infant,
and Early Childhood Home Visiting
(MIECHV) Program ������������������������������������
Establish Title IV-E funding for prevention
and permanency services ����������������������������
Expand eligibility through age 23 for Chafee
Foster Care Independence Program ����������
Reauthorize Family Connection Grants ��������
Reauthorize the Personal Responsibility
Education Program (PREP) ������������������������
Reauthorize Health Profession and Opportunity Grants ��������������������������������������������������
Support demonstration to address over-prescription of psychotropic drugs for children
in foster care ������������������������������������������������
Expand access to high-quality, affordable
care for young children �������������������������������
Establish Low Income Home Energy Assistance Program (LIHEAP) contingency
fund ��������������������������������������������������������������
Fund Upward Mobility Project �����������������������
Apply Child Care and Development Fund
health and safety standards to Temporary
Assistance for Needy Families- (TANF)
and Social Services Block Grant-funded
child care �����������������������������������������������������
Apply set-asides in the Child Care and Development Block Grant to the Child Care
Entitlement funding �����������������������������������
Enhance Title IV-E administrative costs for
IT systems updates �������������������������������������
Invest in child welfare workforce development �������������������������������������������������������������
Promote responsible parenthood by modernizing Child Support �������������������������������������
Strengthen Child Support enforcement ���������
Establish a Child Support Technology Fund �
Establish a Child Support Research Fund ����
Eliminate Abstinence Education Program ����
Expand Child Welfare Regional Partnership
Grants and the Tribal Court Improvement
Program �������������������������������������������������������
Repurpose TANF contingency fund to support Pathways to Jobs initiative �����������������
Increase TANF Block Grant ���������������������������
Establish TANF Economic Response Fund ���
Fund Emergency Aid and Service Connection
Grants ����������������������������������������������������������
.........

2017

29
1
1
.........
.........
1
2,969
560
300

.........
.........
13
50
54
–22
–78
100
–1
1
.........
585
29
1

.........

2016

.........
.........
.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

40

.........
1,087
96

25

75
–35
–89
100
–50

59

13

.........

.........

377
300

3,889

20

4

2

4
10

40

20

2018

388

.........
1,567
148

38

179
–53
–85
100
–23

64

14

.........

.........

63
300

4,632

55

46

24

4
14

41

135

2019

454

.........
1,862
168

41

203
–68
–86
100
–1

70

13

.........

.........

.........
300

5,599

71

78

57

4
15

52

450

2020

486

.........
2,130
195

42

274
–85
–100
100
.........

80

13

.........

.........

.........
300

6,639

52

85

74

4
15

59

745

2021

480

.........
445
.........

43

313
–86
–6
100
.........

141

13

.........

.........

.........
.........

7,709

28

85

75

3
14

61

1,340

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

108

.........
132
.........

43

354
–87
–10
100
.........

162

13

.........

.........

.........
.........

9,205

16

81

73

.........
5

59

1,585

2023

39

.........
102
.........

43

355
–90
–16
100
.........

193

13

.........

.........

.........
.........

10,787

6

39

51

.........
1

65

1,910

2024

5

.........
65
.........

43

352
–90
4
100
.........

222

13

.........

.........

.........
.........

12,476

1

7

18

.........
.........

91

1,995

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

.........

.........
22
.........

43

228
–91
–1
100
.........

799

13

.........

.........

.........
.........

14,422

1

.........

1

.........
.........

119

2,135

2026

1,369

.........
7,231
636

147

785
–263
–438
500
–75

323

66

.........

.........

1,000
1,500

23,728

199

213

157

17
55

221

1,350

2,001

.........
7,997
636

362

2,387
–707
–467
1,000
–75

1,840

131

.........

.........

1,000
1,500

78,327

251

425

375

20
75

616

10,315

2017–2021 2017–2026

Totals

140
SUMMARY TABLES

Provide grants for Statewide Human Services Data Systems �������������������������������������
Total, Health and Human Services ������������
Homeland Security:
Reform the aviation passenger security user
fee to more accurately reflect the costs of
aviation security ������������������������������������������
Increase customs user fees 6 ���������������������������
Increase immigration inspection user fees ����
Increase Express Consignment Courier fees 6 ���
Establish user fee for Electronic Visa Update
System 3 �������������������������������������������������������
Total, Homeland Security ���������������������������
Housing and Urban Development:
Provide funding for grants to reduce local
barriers to housing development ����������������
End family homelessness �������������������������������
Total, Housing and Urban Development ���
Interior:
Provide a fair return to taxpayers for the use
of public resources:
Enact Federal oil and gas management
reforms �����������������������������������������������������
Reform hardrock mining on public lands ��
Repeal geothermal payments to counties ��
Enact offshore energy revenue reform �������
Total, provide a fair return to taxpayers
for the use of public resources ������������
Ensure industry is held responsible for legacy pollution and risks to safety:
Establish an Abandoned Mine Lands
(AML) hardrock reclamation fund 3 �������
Increase coal AML fee to pre–2006 levels 3 ����
Terminate AML payments to certified
States �������������������������������������������������������
Fund abandoned mine lands reclamation
and economic revitalization ��������������������
Total, ensure industry is held responsible for legacy pollution and risks to
safety ���������������������������������������������������
Conserve natural resources for future generations and provide recreation access to
the public:
Establish dedicated funding for Land
and Water Conservation Fund (LWCF)
programs ��������������������������������������������������
5
10,890

2017

.........
–86
.........
–6
.........
–92
6
79
85

–20
.........
–4
.........
–24

.........
–49
–6
50
–5

129

.........
.........

2016

.........
.........
.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........

474

–157

112

–31

–200
–38

–362

–70
–2
–4
–286

30
359
389

.........
–509

–410
–93
.........
–6

25
9,411

2018

2020

2021

2022

2023

2024

2025

2026

988

–86

152

–63

–150
–25

–408

–90
–4
–4
–310

45
616
661

.........
–599

–490
–102
.........
–7

977

–15

182

–82

–100
–15

–458

–110
–5
–4
–339

81
813
894

.........
–669

–550
–112
.........
–7

918

52

200

–90

–50
–8

–505

–120
–5
–4
–376

81
998
1,079

.........
–544

–410
–125
.........
–9

900

110

150

–92

.........
52

–526

–140
–6
–4
–376

51
1,204
1,255

.........
–544

–400
–135
.........
–9

900

55

88

–73

.........
40

–540

–150
–6
–4
–380

6
1,410
1,416

.........
–546

–390
–146
.........
–10

900

30

48

–41

.........
23

–569

–170
–11
–4
–384

.........
1,618
1,618

.........
–548

–380
–158
.........
–10

900

3

18

–28

.........
13

–594

–180
–17
–4
–393

.........
1,829
1,829

.........
–550

–370
–170
.........
–10

900

–9

.........

–14

.........
5

–629

–190
–24
–5
–410

.........
2,041
2,041

.........
–2,000

–2,000
.........
.........
.........

37
45
50
45
25
12
5
.........
3,537 –12,669 –21,152 –31,513 –40,833 –49,379 –54,621 –70,297

2019

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

3,486

–211

696

–272

–500
–135

–1,757

–410
–16
–20
–1,311

243
2,865
3,108

.........
–2,413

–1,860
–518
.........
–35

162
–9,983

7,986

–22

1,000

–520

–500
–2

–4,615

–1,240
–80
–41
–3,254

300
10,967
11,267

.........
–6,601

–5,400
–1,127
.........
–74

249
–256,626

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

141

Establish a dedicated Coastal Climate
Resilience Fund from offshore energy
revenues ��������������������������������������������������
Reauthorize the Federal Land Transaction
Facilitation Act of 2000 (FLTFA) ������������
Permanently reauthorize the Federal
Lands Recreation Enhancement Act
(FLREA) ��������������������������������������������������
Provide funding for a National Park Service Centennial Initiative �����������������������
Total, conserve natural resources for
future generations and provide recreation access to the public ��������������������
Maintain commitments to communities and
insular territories:
Provide mandatory funding for tribal
contract support costs:
PAYGO effects �����������������������������������������
Nonscoreable reclassification �����������������
Total, provide mandatory funding for
tribal contract support costs �����������
Annual reduction to discretionary
spending limits (non-add) �������������������
Extend the Palau Compact of Free Association ���������������������������������������������������������
Extend funding for Payments in Lieu of
Taxes (PILT) ��������������������������������������������
Improve coal miner retiree health and
pension benefits ���������������������������������������
Total, maintain commitments to communities and insular territories ���������
Total, Interior ����������������������������������������������
Justice:
Provide funding for 21st Century Justice
grants to incentivize justice reform �����������
Labor:
Establish an American Talent Compact ��������
Create Career Navigators program ���������������
Create Opening Doors for Youth program �����
Create an Apprenticeship Training Fund ������
Establish Paid Leave Partnership Initiative �
Improve Pension Benefit Guaranty Corporation (PBGC) solvency ����������������������������������
Unemployment Insurance Modernization
and Reform: 7
Strengthen Unemployment Insurance (UI)
system solvency 3, 8 �����������������������������������
40

2017

–5
.........
28
192

.........
.........
.........
.........
46
480
375
901
1,064
110
600
400
2,035
400
221
–1,060

.........

.........

2016

.........
.........
.........
.........

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

.........

–3,128

–1,109

600
400
2,035
400
664

300

651
975

394

.........

26

–212

231

19
212

843

275

.........

–6

100

2018

–3,185

–1,172

600
400
715
400
664

475

746
1,843

407

.........

20

–287

319

32
287

1,591

473

.........

–10

140

2019

–3,922

–1,295

600
400
715
400
664

500

767
1,860

414

.........

17

–293

336

43
293

1,566

431

.........

–12

170

2020

–4,303

–1,418

600
400
.........
400
.........

500

743
1,582

418

.........

15

–299

310

11
299

1,292

177

.........

–3

200

2021

–5,425

–1,615

.........
.........
.........
.........
.........

500

747
1,430

428

.........

14

–305

305

.........
305

1,099

–1

.........

.........

200

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

–6,802

–1,763

.........
.........
.........
.........
.........

500

747
1,353

430

.........

6

–311

311

.........
311

1,091

–9

.........

.........

200

2023

–6,068

–1,942

.........
.........
.........
.........
.........

500

753
1,305

431

.........

5

–317

317

.........
317

1,091

–9

.........

.........

200

2024

–6,346

–3,322

.........
.........
.........
.........
.........

500

758
1,259

434

.........

.........

–324

324

.........
324

1,092

–8

.........

.........

200

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

–7,114

–953

.........
.........
.........
.........
.........

500

765
1,223

436

.........

.........

–329

329

.........
329

1,096

–4

.........

.........

200

2026

–14,538

–6,054

3,000
2,000
5,500
2,000
2,213

1,885

3,808
7,324

2,008

480

124

–1,091

1,196

105
1,091

5,484

1,384

.........

–36

650

–46,293

–15,649

3,000
2,000
5,500
2,000
2,213

4,385

7,578
13,894

4,167

480

149

–2,677

2,782

105
2,677

10,953

1,353

.........

–36

1,650

2017–2021 2017–2026

Totals

142
SUMMARY TABLES

Improve UI Extended Benefits �������������������
Modernize UI 3, 8 �������������������������������������������
Expand Short-Time Compensation ������������
Create a wage insurance program �������������
Improve UI program integrity 3 ����������������������
Implement cap adjustments for UI program
integrity 3, 8 ���������������������������������������������������
Outlays from reduction to discretionary
spending limits (non-add) ���������������������������
Outlays from program integrity discretionary
cap adjustment (non-add) ���������������������������
Create mandatory Reemployment Services
and Eligibility Assessment program 3 ��������
Pilot models for providing multiple-employer
benefits ��������������������������������������������������������
Expand Foreign Labor Certification fees �������
Total, Labor �������������������������������������������������
Treasury:
Establish a Pay for Success Incentive Fund ��
Authorize Treasury to locate and recover
assets of the United States and to retain a
portion of amounts collected to pay for the
costs of recovery ������������������������������������������
Increase delinquent Federal non-tax debt
collections by authorizing administrative
bank garnishment for non-tax debts ����������
Allow offset of Federal income tax refunds to
collect delinquent State income taxes for
out-of-State residents ���������������������������������
Reduce costs for States collecting delinquent
income tax obligations. �������������������������������
Reauthorize the State Small Business Credit
Initiative ������������������������������������������������������
Implement tax enforcement program integrity cap adjustment 3 ��������������������������������������
Outlays from discretionary cap adjustment
(non-add) �����������������������������������������������������
Create a Financing America’s Infrastructure
Renewal (FAIR) program ����������������������������
Establish Financial Innovation for Working
Families Challenge and Demonstration
Grants ����������������������������������������������������������
Provide allotment for Puerto Rico earned
income tax credit (EITC) payments �����������
Total, Treasury ��������������������������������������������

741
2,057
177
.........
–69
–76
.........
30
.........
25
.........
5,451
29

–8
–32
.........
.........
212
–278
458
2
15
601
541

.........
.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

2017

.........
.........
.........
.........
.........

2016

613
–373

45

2

890

–1,585

571

.........

.........

–32

–8

21

50
.........
4,820

–28

5

–154

–56

2,033
2,587
178
302
–108

2018

626
–2,390

40

2

1,255

–3,263

235

.........

.........

–32

–8

10

25
.........
2,862

–322

.........

–157

8

2,533
1,224
178
935
–141

2019

640
–4,070

.........

2

1,622

–5,008

312

.........

.........

–32

–8

24

.........
.........
2,711

–326

.........

–160

13

2,989
1,185
179
1,293
–184

2020

655
–5,976

.........

2

1,996

–6,763

130

.........

.........

–32

–8

40

.........
.........
1,151

–308

.........

–163

14

3,477
950
179
1,338
–178

2021

670
–7,640

.........

2

2,125

–8,327

.........

.........

.........

–32

–9

56

.........
.........
–1,078

–229

.........

–166

13

3,933
854
180
1,382
–171

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

685
–8,572

.........

2

2,153

–9,264

.........

.........

.........

–32

–9

46

.........
.........
–1,870

–228

.........

–170

11

4,136
1,340
180
1,422
–166

2023

701
–8,886

.........

2

2,180

–9,590

.........

.........

.........

–32

–9

42

.........
.........
–74

–233

.........

–173

10

5,381
1,267
180
1,467
–136

2024

734
–9,114

717

.........

2

2,231

–9,814

.........

.........

.........

–32

–9

5

.........
.........
252

–211

.........

–180

6

5,602
1,348
187
1,541
–154

2026

–9,032

.........

2

2,206

–9,737

.........

.........

.........

–32

–9

27

.........
.........
–1,233

–210

.........

–177

8

5,828
1,299
184
1,504
–178

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

–12,268

3,135

100

10

6,221

–16,897

1,460

.........

.........

–160

–40

124

100
.........
16,995

–984

35

–634

–97

11,773
8,003
891
3,868
–680

–55,512

6,642

100

20

17,116

–63,629

1,460

.........

.........

–320

–85

300

100
.........
12,992

–2,095

35

–1,500

–49

36,653
14,111
1,802
11,184
–1,485

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

143

Veterans Affairs (VA):
Extend round-down of cost of living adjustments (compensation) ���������������������������������
Extend round-down of cost of living adjustments (education) ����������������������������������������
Provide burial receptacles for certain new
casketed gravesites �������������������������������������
Improve housing grant program ��������������������
Increase cap on vocational rehabilitation
contract counseling �������������������������������������
Extend supplemental service disabled veterans insurance coverage �������������������������������
Clarify evidentiary threshold at which VA is
required to provide medical examination ��
Cap Post–9/11 GI Bill benefits for flight
training ��������������������������������������������������������
Expand eligibility for Montgomery GI Bill
refund ����������������������������������������������������������
Extend authorization of work-study activities ���������������������������������������������������������������
Pro-rate GI Bill benefit usage for certification
tests ��������������������������������������������������������������
Modernize the definition of Automobile
Adaptive Equipment (AAE) ������������������������
Eliminate reductions of special monthly
compensation for hospitalized veterans �����
Restore the eligibility of certain veterans for
special aid and attendance allowance ��������
Reissue VA benefit payments to all victims of
fiduciary misuse ������������������������������������������
Increase Burial Benefit Allowances with
increases in CPI ������������������������������������������
Remove annual income from net worth calculation ������������������������������������������������������������
Restore program entitlement when approval
is withdrawn during enrollment ����������������
Add Section 12304b of Title 10 as qualification for active duty for GI Bill eligibility ���
Move home modifications under a rehabilitation program to the Specially Adapted
Housing (SAH) Program �����������������������������
Expand eligibility for Medal of Honor marker ���
Eliminate sunset date for vocational rehabilitation for servicemembers �������������������������
Allow extension of a period of employment
services ��������������������������������������������������������
Sunset Montgomery GI Bill Active Duty
program �������������������������������������������������������
–21

2017

–1
2
1
1
.........
–120
–44
2
1
2
–3
.........
2
2
1
.........
.........
.........
–1
.........
11
1
.........

.........

2016

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

.........

.........

–2

–1
.........

17

.........

.........

2

2

2

1

–3

1

1

2

–45

–125

.........

1

3
1

–1

–64

2018

.........

.........

–2

–1
.........

32

.........

.........

3

2

2

1

–2

1

1

2

–47

–130

.........

1

1
1

–1

–120

2019

.........

.........

–2

–1
.........

36

.........

.........

5

2

2

1

–1

1

1

2

–50

–135

.........

1

2
1

–2

–169

2020

.........

.........

–1

.........
.........

38

1

1

7

2

3

.........

–2

1

1

1

–52

–140

1

1

3
1

–2

–225

2021

.........

.........

–1

.........
.........

40

.........

.........

9

2

3

1

–2

1

1

2

–54

–146

.........

1

2
1

–2

–246

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

19

1

–1

–1
.........

42

.........

.........

11

2

3

1

–2

1

1

3

–57

–152

.........

1

4
1

–2

–258

2023

69

.........

–1

–1
.........

43

.........

1

13

2

3

1

–1

1

2

2

–59

–158

1

1

2
1

–2

–272

2024

45

.........

–1

–1
.........

45

1

1

15

2

3

1

–1

2

1

2

–62

–164

1

1

7
1

–3

–286

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

34

.........

–1

–1
.........

47

1

1

18

2

3

1

–1

2

1

2

–65

–171

1

1

1
1

–2

–291

2026

.........

1

4

–4
.........

123

1

1

18

10

11

3

–11

6

5

9

–238

–650

1

5

11
5

–7

–599

167

2

–1

–8
.........

340

3

4

84

20

26

8

–18

13

11

20

–535

–1,441

4

10

27
10

–18

–1,952

2017–2021 2017–2026

Totals

144
SUMMARY TABLES

Expansion of eligibility for medallion or
other device to signify status of deceased
veteran ���������������������������������������������������������
Expansion of Specially Adapted Housing
Assistance for certain veterans with disabilities ��������������������������������������������������������
Authorize the Secretary to establish debts
for breaching 38 U.S.C. Section 2101
(Specially Adapted Housing) contractual
obligation �����������������������������������������������������
Total, Veterans Affairs ��������������������������������
Corps of Engineers:
Reform inland waterways financing 3 �������������
Environmental Protection Agency (EPA):
Eliminate statutory cap on pre-manufacture
notice fee ������������������������������������������������������
Enact confidential business information
management fee ������������������������������������������
Lift restrictions on EPA spending of Federal
Insecticide, Fungicide, and Rodenticide Act
(FIFRA) pesticide fees ��������������������������������
Total, Environmental Protection Agency ���
General Services Administration:
Establish an Information Technology Modernization Fund �������������������������������������������
National Aeronautics and Space Administration (NASA):
Provide additional R&D funding for NASA ���
National Science Foundation (NSF):
Provide additional R&D funding for NSF �����
Other Defense–Civil Programs:
Increase TRICARE pharmacy copayments ����
Increase annual premiums for TRICAREFor-Life (TFL) enrollment ��������������������������
Increase TRICARE pharmacy copayments
(accrual effects) �������������������������������������������
Increase annual premiums for TFL enrollment (accrual effects) ����������������������������������
Enact changes to the military retirement reform enacted in the 2016 National Defense
Authorization Act 3 ��������������������������������������
Total, Other Defense–Civil Programs ��������
Office of Personnel Management:
Streamline Federal Employee Health Benefit
Plan (FEHBP) pharmacy benefit contracting ����������������������������������������������������������������
.........

2017

2

.........
–162
–3
–4
.........
6
2
1,500
325
77
–35
–3
322
281
–394
171

.........

.........

2016

.........

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

.........

3

1

–69

–408
146

286

338

–16

–54

157

283

600

6
–4

–2

–8

–78

.........
–204

2018

3

1

–127

–388
124

294

355

–44

–93

88

56

750

1
–9

–2

–8

–118

.........
–252

2019

3

1

–141

–380
–139

303

374

–85

–351

34

.........

.........

1
–7

.........

–8

–156

.........
–302

2020

2

1

–151

–315
–121

311

394

–117

–394

13

.........

.........

.........
–8

.........

–8

–156

.........
–358

2021

1

–161

–308
–151

328

415

–153

–433

4

.........

.........

.........
–8

.........

–8

–156

.........
–387

.........

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

1

–173

–299
–214

346

438

–192

–507

4

.........

.........

.........
–8

.........

–8

–156

.........
–382

.........

2023

1

–184

–298
–305

366

463

–235

–601

23

.........

.........

.........
–8

.........

–8

–156

.........
–351

.........

2024

1

–198

–292
–425

385

487

–281

–724

.........

.........

.........

.........
–8

.........

–8

–155

.........
–389

.........

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

1

–212

–291
–468

408

514

–332

–767

.........

.........

.........

.........
–8

.........

–8

–155

.........
–415

.........

2026

–488

–1,885
181

1,475

1,783

–265

–927

369

664

2,850

14
–26

–4

–36

–511

.........
–1,278

13

4

–1,416

–3,373
–1,382

3,308

4,100

–1,458

–3,959

400

664

2,850

14
–66

–4

–76

–1,289

.........
–3,202

13

9

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

145

Expand FEHBP plan types ����������������������������
Adjust FEHBP premiums for wellness ����������
Extend FEHBP to infants born to daughters
of FEHBP enrollees for 30 days �����������������
Add FEHBP to the Federal Anti-Kickback
Statute ���������������������������������������������������������
Total, Office of Personnel Management �����
Social Security Administration (SSA):
Hold fraud facilitators liable for overpayments 9 ���������������������������������������������������������
Allow Government-wide use of Customs and
Border Protection (CBP) entry/exit data to
prevent improper payments �����������������������
Lower electronic wage reporting threshold to
five employees ���������������������������������������������
Move from annual to quarterly wage reporting ����������������������������������������������������������������
Improve collection of pension information
and transition to an alternative approach
based on years of non-covered earnings
after 10 years ����������������������������������������������
Establish workers compensation information
reporting ������������������������������������������������������
Extend Supplemental Security Income (SSI)
time limits for qualified refugees ���������������
Conform treatment of State and local government EITC) and child tax credit (CTC for
SSI 10 �������������������������������������������������������������
Terminate step-child benefits in the same
month as step-parent 11 �������������������������������
Use the Death Master File to prevent Federal improper payments ���������������������������������
Modernize SSA information technology ��������
Authorize SSA to conduct a new continuing
disability review (CDR) when fraud was
involved in a prior CDR ������������������������������
Authorize SSA to use all collection tools to
recover funds in certain scenarios, such as
when someone improperly cashes a beneficiary’s check or removes a benefit from a
joint account ������������������������������������������������
Allow SSA to use commercial databases to
verify real property data in the SSI program �������������������������������������������������������������
Increase the minimum monthly Old-Age Survivors and Disability Insurance (OASDI)
overpayment collection from $10 a month
to 10 percent ������������������������������������������������

.........
.........
.........
.........
.........
.........
.........
.........
20

18
5
48
.........
.........
.........
.........
.........

.........
–12

–8

.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........
.........
.........
.........

.........
.........

.........

2017

.........
.........

2016

–26

–28

–2

.........

.........
80

.........

.........

57

5

28

30

.........

.........

.........

.........
–54

11

–1
5

2018

–43

–44

–2

.........

.........
80

.........

.........

.........

.........

24

90

.........

–1

–1

.........
–110

31

–3
–11

2019

–59

–53

–3

.........

.........
80

.........

.........

.........

.........

–433

–119

.........

–5

–1

.........
–157

36

–5
–47

2020

–77

–60

–4

.........

.........
.........

.........

.........

.........

.........

–1,002

–126

.........

–11

–1

.........
–202

37

–7
–81

2021

–93

–69

–4

.........

.........
.........

.........

.........

.........

.........

–1,350

–148

.........

–20

–1

.........
–249

39

–8
–119

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

–107

–70

–5

.........

.........
.........

–1

.........

.........

.........

–1,421

–178

.........

–26

–1

.........
–306

43

–12
–164

2023

–135

–68

–5

.........

.........
.........

–1

.........

.........

.........

–1,318

–203

.........

–31

–1

.........
–387

45

–15
–233

2024

–144

–76

–5

.........

.........
.........

–1

.........

.........

.........

–1,246

–225

.........

–40

–1

.........
–479

52

–18
–315

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

–156

–79

–5

.........

.........
.........

–1

.........

.........

.........

–1,142

–270

.........

–43

–1

.........
–601

51

–19
–421

2026

–213

–197

–11

.........

.........
240

.........

.........

105

10

–1,365

–105

.........

–17

–3

.........
–523

115

–16
–134

–848

–559

–35

.........

.........
240

–4

.........

105

10

–7,842

–1,129

.........

–177

–8

.........
–2,545

345

–88
–1,386

2017–2021 2017–2026

Totals

146
SUMMARY TABLES

Exclude SSA debts from discharge in bankruptcy �����������������������������������������������������������
Eliminate SSI dedicated accounts ������������������
Modify the treatment of certain debt referrals to the Treasury Offset Program ����������
Total, Social Security Administration ��������
Other Independent Agencies:
Federal Communications Commission (FCC):
Enact Spectrum License User Fee and
allow the FCC to auction predominantly
domestic satellite services ����������������������
Postal Service:
Enact Postal Service financial relief and
reform ������������������������������������������������������
Railroad Retirement Board (RRB):
Amend Railroad Retirement Act and the
Railroad Unemployment Insurance Act
to include a felony charge for fraud. ������
Promote RRB program integrity ����������������
Total, Railroad Retirement Board ����������
National Infrastructure Bank:
Create infrastructure bank ������������������������
Total, Other Independent Agencies ������������
Multi-Agency:
Enact immigration reform 3 ����������������������������
Establish hold harmless for Federal poverty
guidelines ����������������������������������������������������
Expand access to the National Directory of
New Hires (NDNH) �������������������������������������
Auction or assign via fee 1675–1680 megahertz �������������������������������������������������������������
Establish a consolidated TRICARE program
(mandatory effects in Coast Guard, Public
Health Service, and National Oceanic and
Atmospheric Administration) ���������������������
Establish Interagency Coordinating Council
on Workforce Attachment ���������������������������
Index the $750 offset of SSA benefits to inflation (Student Aid Bill of Rights proposal) ��
Enact 21st Century Clean Transportation
Plan ��������������������������������������������������������������
Establish Family Energy Assistance Fund ����
Mandatory effects of proposal to authorize
additional Afghan Special Immigrant
Visas ������������������������������������������������������������
Total, Multi-Agency �������������������������������������
Total, mandatory initiatives and savings ��
14,616
2,903
18
20,591
34,606

–225
–1,514

.........
4
4
33
–1,702
4,000
.........
.........
.........

1
51
1,890
5,392
1,445

.........
–625

.........
.........
.........
.........
–625
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........
.........
......... 12,779
–625 29,477

9

51

–6

.........

.........

.........

3,000

153
–2,300

.........
4
4

–2,132

–325

6
135

.........
67

.........
.........

–18
3

2018

–9
5

2017

.........
.........

2016

595
–4,143

.........
4
4

–4,192

–550

6
–616

–29
.........

2020

831
–4,074

.........
4
4

–4,359

–550

5
–1,310

–34
.........

2021

1,058
–3,916

.........
4
4

–4,428

–550

6
–1,715

–36
.........

2022

1,158
–3,845

.........
4
4

–4,457

–550

5
–1,842

–38
.........

2023

1,233
–3,696

.........
5
5

–4,384

–550

6
–1,796

–40
.........

2024

1,207
–3,650

.........
5
5

–4,312

–550

5
–1,776

–43
.........

2025

1,062
–3,774

.........
5
5

–4,291

–550

6
–1,736

–45
.........

2026

18
21,735
27,776

22,470
4,343

14

51

–11

–150

.........

.........

16
26,159
16,234

30,463
5,770

21

51

–12

–150

.........

.........

15
22,671
2,803

35,485
7,157

27

.........

–13

.........

.........

.........

33,848
8,624

40

.........

–17

.........

.........

.........

29,479
8,766

46

.........

–18

.........

.........

.........

22,730
8,892

53

.........

–20

.........

.........

.........

16,669
9,022

60

.........

–22

.........

.........

.........

16
16
15
15
16
24,376 17,511
9,288 –2,330 –8,255
–7,126 –22,683 –32,947 –44,311 –66,064

35,877
8,465

33

.........

–15

.........

.........

.........

–5,000 –10,000 –20,000 –20,000 –25,000 –29,000 –34,000 –34,000

373
–4,267

.........
4
4

–4,219

–425

5
85

–23
.........

2019

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

67
103,935
110,896

108,426
21,618

1,961

204

–41

–300

.........

.........

–28,000

1,985
–16,486

.........
20
20

–16,416

–2,075

22
–1,639

–113
8

145
144,525
–62,235

247,029
65,387

2,193

204

–133

–300

.........

.........

–170,000

7,703
–35,367

.........
43
43

–38,288

–4,825

50
–10,504

–315
8

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

147

Tax proposals:
Elements of business tax reform:
Reform the U.S. international tax system:
Restrict deductions for excessive interest of members of financial reporting
groups ������������������������������������������������������
Provide tax incentives for locating jobs
and business activity in the United
States and remove tax deductions for
shipping jobs overseas ����������������������������
Repeal delay in the implementation of
worldwide interest allocation �����������������
Impose a 19-percent minimum tax on
foreign income �����������������������������������������
Limit shifting of income through intangible property transfers �����������������������������
Disallow the deduction for excess nontaxed reinsurance premiums paid to
affiliates ���������������������������������������������������
Modify tax rules for dual capacity taxpayers ������������������������������������������������������������
Tax gain from the sale of a partnership
interest on look-through basis ����������������
Modify sections 338(h)(16) and 902 to limit
credits when non-double taxation exists 
Close loopholes under subpart F ����������������
Restrict the use of hybrid arrangements
that create stateless income �������������������
Limit the ability of domestic entities to
expatriate ������������������������������������������������
Total, reform the U.S. international
tax system ���������������������������������������
Simplification and tax relief for small business:
Expand expensing for small business ��������
Expand simplified accounting for small
business and establish a uniform definition of small business for accounting
methods ���������������������������������������������������
Increase the limitations for deductible new
business expenditures and consolidate
provisions for start-up and organizational expenditures ���������������������������������
Expand and simplify the tax credit provided to qualified small employers for
non-elective contributions to employee
health insurance 12 ����������������������������������
–2,822

2017

–59
–1,517
–115
–118

.........
.........
.........
.........

2,101

6,248

490

170

.........

.........

.........

10

163

484

4,874

2,863

–327

–201

–102
–2,635

–251

146

477

2,819

2,072

–556

–215

–105
–2,821

–264

–878

131

473

1,975

1,625

–807

–230

–105
–3,019

–277

–930

–731

100

471

1,814

1,335

–1,083

–247

–105
–3,230

–291

–970

–771

–275

118

469

1,745

1,132

–1,383

–264

–105
–3,453

–305

–992

–815

–315

80

465

1,724

1,009

–1,711

–283

–105
–3,692

–321

–1,032

–848

–361

.........

60

461

1,819

961

–2,068

–304

–106
–3,945

–337

–1,074

–882

–413

.........

24

2026

27

456

1,839

971

–2,457

–326

–106
–4,215

–354

–1,121

–918

–473

.........

26

26

–9,717 –10,688

2025

90

–25,963

–350

–107
–4,501

–371

–1,359

–958

–542

–1,008

–476
–13,222

–1,229

–4,057

–3,267

–968

14

452

1,845

997

710

2,395

17,730

9,996

1,009

4,698

26,702

15,066

–484,028

–13,390

–2,535

–1,005
–33,028

–2,917

–9,635

–7,688

–3,072

–350,391

9,953

211

–70,531

2017–2021 2017–2026

–207,649

–146

.........

–814

–697

–237

.........

23

–8,833

2024

......... –28,525 –46,140 –44,675 –42,945 –45,364 –49,121 –52,011 –55,055 –58,296 –61,896

–465

.........

–657

–201

1,055

22

–8,030

2023

–2,891

–411

.........

–167

2,596

21

–7,300

2022

–2,880

–88

.........

2,496

20

–6,637

2021

–164,611

2,400

20

–6,033

2020

......... –24,201 –38,418 –35,969 –33,192 –32,831 –34,211 –35,651 –37,117 –38,635 –40,166

.........

18

–5,485

2019

9,953

1,406

.........

–4,986

2018

Totals

.........

11

.........

2016

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

148
SUMMARY TABLES

Total, simplification and tax relief for
small business �������������������������������������
Incentives for job creation, manufacturing,
research, and clean energy:
Enhance and simplify research incentives 
Extend and modify certain employment
tax credits, including incentives for
hiring veterans ����������������������������������������
Provide new Manufacturing Communities
tax credit ��������������������������������������������������
Provide Community College Partnership
Tax Credit ������������������������������������������������
Designate Promise Zones 12 �������������������������
Modify and permanently extend renewable
electricity production tax credit and
investment tax credit 12 ���������������������������
Modify and permanently extend the deduction for energy-efficient commercial
building property ������������������������������������
Provide a carbon dioxide investment and
sequestration tax credit 12 �����������������������
Provide additional tax credits for investment in qualified property used in a
qualifying advanced energy manufacturing project �������������������������������������������
Extend the tax credit for second generation biofuel production ����������������������������
Provide a tax credit for the production of
advanced technology vehicles �����������������
Provide a tax credit for medium- and
heavy-duty alternative-fuel commercial
vehicles ����������������������������������������������������
Modify and extend the tax credit for the
construction of energy-efficient new
homes �������������������������������������������������������
Total, incentives for job creation,
manufacturing, research, and clean
energy ����������������������������������������������
Incentives to promote regional growth:
Modify and permanently extend the New
Markets tax credit �����������������������������������
Reform and expand the Low-Income Housing tax credit �������������������������������������������
Total, incentives to promote regional
growth ��������������������������������������������������
Incentives for investment in infrastructure:
Provide America Fast Forward Bonds and
expand eligible uses 12 �����������������������������
9,009

2017

959
2
97
109
301
122
159
9

74
87
505
44
82
2,550
.........
19
19
.........

10

2016

.........
.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........
.........
.........
1
1
.........

.........

99

99

.........

4,713

182

78

503

157

194

34

268

230

277
610

277

7

1,896

8,384

2018

.........

272

272

.........

6,490

238

85

497

172

1,118

47

281

345

380
681

483

9

2,154

5,514

2019

–1

609

512

97

7,482

268

89

469

175

787

48

285

587

406
829

619

511

2,409

4,204

2020

1

1,047

769

278

8,487

288

93

386

175

111

388

283

1,041

405
902

693

1,062

2,660

3,720

2021

.........

1,514

1,031

483

9,080

306

61

220

175

4

709

279

1,359

273
836

751

1,194

2,913

3,464

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

.........

2,016

1,300

716

9,031

323

15

83

153

–34

409

277

1,633

124
786

788

1,308

3,166

3,278

2023

–1

2,546

1,576

970

11,691

351

.........

–161

118

–28

791

273

3,990

96
752

677

1,406

3,426

3,301

2024

.........

3,095

1,860

1,235

14,059

382

.........

–296

83

–14

677

270

6,549

79
730

417

1,492

3,690

3,293

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

.........

3,657

2,152

1,505

15,511

405

.........

–267

48

–3

338

272

8,287

64
723

107

1,573

3,964

3,308

2026

*

2,046

1,671

375

29,722

1,058

389

2,360

766

2,284

526

1,276

2,325

1,577
3,323

2,169

1,591

10,078

30,831

–1

14,874

9,590

5,284

89,094

2,825

465

1,939

1,343

2,209

3,450

2,647

24,143

2,213
7,150

4,909

8,564

27,237

47,475

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

149

Allow eligible uses of America Fast
Forward Bonds to include financing all
qualified private activity bond program
categories 12 ����������������������������������������������
Allow current refundings of State and
local governmental bonds �����������������������
Repeal the $150 million non-hospital bond
limitation on all qualified 501(c)(3)
bonds ��������������������������������������������������������
Increase national limitation amount for
qualified highway or surface freight
transfer facility bonds �����������������������������
Provide a new category of qualified private activity bonds for infrastructure
projects referred to as “qualified public
infrastructure bonds” ������������������������������
Modify qualified private activity bonds for
public education facilities �����������������������
Modify treatment of banks investing in
tax-exempt bonds ������������������������������������
Repeal tax-exempt bond financing of professional sports facilities ������������������������
Allow more flexible research arrangements for purposes of private business
use limits �������������������������������������������������
Modify tax-exempt bonds for Indian tribal
governments ��������������������������������������������
Total, incentives for investment in infrastructure ����������������������������������������������
Eliminate fossil fuel tax preferences:
Treat publicly-traded partnerships for
fossil fuels as C corporations ������������������
Eliminate oil and natural gas preferences:
Repeal enhanced oil recovery credit �������
Repeal credit for oil and natural gas
produced from marginal wells ������������
Repeal expensing of intangible drilling
costs �����������������������������������������������������
Repeal deduction for tertiary injectants ����
Repeal exception to passive loss limitations for working interests in oil and
natural gas properties ������������������������
Repeal percentage depletion for oil and
natural gas wells ���������������������������������
Repeal domestic manufacturing deduction for oil and natural gas production �������������������������������������������������������
1

2017

1
.........
28

27
.........
5
–3
.........
4
63
.........
–235
.........
–966
–5
–9
–483
–470

.........

2016

.........
.........
6

.........
.........
.........
.........
.........
.........
6
.........
.........
.........
.........
.........
.........
.........
.........

1

5

4

–836

–770

–12

–1,541
–8

.........

–559

.........

230

12

.........

–11

38

.........

121

60

2018

–869

–725

–12

–1,439
–8

.........

–792

.........

489

12

.........

–23

131

.........

258

93

3

5

10

2019

–901

–666

–12

–1,645
–8

.........

–979

.........

749

12

1

–35

225

.........

397

125

5

5

15

2020

–932

–589

–11

–1,526
–8

.........

–1,070

.........

1,003

12

1

–47

317

.........

534

153

7

5

20

2021

–962

–509

–10

–1,100
–8

.........

–1,049

–201

1,211

12

1

–60

405

.........

646

167

9

5

26

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

–993

–429

–10

–733
–8

.........

–1,011

–280

1,345

12

3

–72

493

.........

698

163

11

5

32

2023

–1,026

–350

–9

–472
–8

.........

–1,010

–295

1,409

12

3

–85

574

.........

714

136

13

5

38

2024

–1,062

–270

–9

–340
–8

.........

–1,038

–309

1,437

12

3

–97

630

.........

728

96

16

5

44

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

–1,098

–199

–9

–288
–8

.........

–1,060

–323

1,389

12

4

–109

616

.........

741

55

17

5

48

2026

–4,008

–3,233

–56

–7,117
–37

.........

–3,635

.........

2,534

52

2

–119

716

.........

1,337

459

16

21

50

–9,149

–4,990

–103

–10,050
–77

.........

–8,803

–1,408

9,325

112

16

–542

3,434

.........

4,864

1,076

82

46

238

2017–2021 2017–2026

Totals

150
SUMMARY TABLES

Increase geological and geophysical
amortization period for independent
producers to seven years ��������������������
Subtotal, eliminate oil and natural
gas preferences ����������������������������
Eliminate coal preferences:
Repeal expensing of exploration and
development costs �������������������������������
Repeal percentage depletion for hard
mineral fossil fuels ������������������������������
Repeal capital gains treatment for royalties ����������������������������������������������������
Repeal domestic manufacturing deduction for the production of coal and
other hard mineral fossil fuels �����������
Subtotal, eliminate coal
preferences ����������������������������������
Total, eliminate fossil fuel tax
preferences ������������������������������
Reform the treatment of financial and insurance industry products:
Require that derivative contracts be
marked to market with resulting gain
or loss treated as ordinary ����������������������
Modify rules that apply to sales of life
insurance contracts ���������������������������������
Modify proration rules for life insurance
company general and separate accounts ���
Expand pro rata interest expense disallowance for corporate-owned life insurance ����
Conform net operating loss (NOL) rules
of life insurance companies to those of
other corporations �����������������������������������
Total, reform the treatment of
financial and insurance industry
products �������������������������������������������
Other business revenue changes and loophole closers:
Repeal LIFO method of accounting for
inventories �����������������������������������������������
Repeal lower-of-cost-or-market inventory
accounting method ����������������������������������
Modify like-kind exchange rules ����������������
Modify depreciation rules for purchases of
general aviation passenger aircraft �������
Expand the definition of substantial builtin loss for purposes of partnership loss
transfers ��������������������������������������������������
Extend partnership basis limitation rules
to nondeductible expenditures ���������������
–54

2017

–2,222
–20
–113
–26
–11
–170
–2,392

–3,674
–26
–345
–116
–18
–4,179

–5,369
–878
–2,684
–48
–7
–89

.........

2016

.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........
.........

–122

–8

–159

–1,321
–7,828

–7,647

–6,246

–28

–232

–527

–44

–5,415

–4,213

–290

–20

–52

–183

–35

–3,923

–197

2018

–126

–8

–260

–1,381
–6,889

–8,307

–5,294

–30

–337

–534

–46

–4,347

–4,437

–285

–21

–52

–177

–35

–4,152

–307

2019

–129

–8

–345

–1,390
–5,903

–8,394

–3,830

–31

–457

–551

–48

–2,743

–4,759

–252

–22

–52

–145

–33

–4,507

–296

2020

–132

–9

–460

–521
–4,870

–8,611

–2,924

–33

–597

–579

–50

–1,665

–4,592

–221

–23

–52

–114

–32

–4,371

–235

2021

–134

–9

–511

–240
–3,986

–8,082

–2,575

–35

–753

–609

–54

–1,124

–4,214

–205

–24

–52

–99

–30

–3,808

–170

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

–136

–10

–434

–250
–3,668

–8,032

–2,309

–36

–910

–628

–56

–679

–3,758

–191

–25

–52

–87

–27

–3,287

–103

2023

–139

–10

–346

–260
–3,748

–8,455

–2,279

–38

–1,075

–642

–58

–466

–3,406

–178

–26

–52

–75

–25

–2,933

–58

2024

–141

–10

–286

–271
–3,831

–9,475

–2,437

–39

–1,245

–658

–61

–434

–3,252

–169

–27

–52

–66

–24

–2,774

–47

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

–144

–10

–208

–283
–3,916

–8,963

–2,612

–41

–1,422

–681

–63

–405

–3,199

–166

–28

–52

–62

–24

–2,710

–48

2026

–598

–40

–1,272

–5,491
–28,174

–38,328

–22,473

–140

–1,739

–2,536

–214

–17,844

–20,393

–1,218

–97

–234

–732

–155

–19,175

–1,089

–1,292

–89

–3,057

–6,795
–47,323

–81,335

–34,685

–329

–7,144

–5,754

–506

–20,952

–38,222

–2,127

–227

–494

–1,121

–285

–34,687

–1,515

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

151

Deny deduction for punitive damages �������
Conform corporate ownership standards ���
Tax corporate distributions as dividends ���
Repeal FICA tip credit ��������������������������������
Repeal the excise tax credit for distilled
spirits with flavor and wine additives 13 
Total, other revenue changes and loophole closers ������������������������������������������
Total, elements of business tax reform ����������
Transition to a reformed business tax system:
Impose a 14-percent one-time tax on previously untaxed foreign income ���������������������
Middle-class and pro-work tax reforms:
Reform child care tax incentives 12 �����������������
Simplify and better target tax benefits for
education 12 ��������������������������������������������������
Expand the EITC for workers without qualifying children 12 �������������������������������������������
Simplify the rules for claiming the EITC for
workers without qualifying children 12 �������
Provide a second-earner tax credit 12 ��������������
Extend exclusion from income for cancellation of certain home mortgage debt �����������
Total, middle-class and pro-work tax
reforms �������������������������������������������������
Reforms to retirement and health benefit plans:
Provide for automatic enrollment in IRAs,
including a small employer tax credit,
increase the tax credit for small employer
plan start-up costs, and provide an additional tax credit for small employer plans
newly offering auto-enrollment 12 ���������������
Expand penalty-free withdrawals for longterm unemployed ����������������������������������������
Require retirement plans to allow long-term
part-time workers to participate ����������������
Facilitate annuity portability �������������������������
Simplify minimum required distribution
rules �������������������������������������������������������������
Allow all inherited plan and IRA balances to
be rolled over within 60 days ����������������������
Permit unaffiliated employers to maintain a
single multi-employer defined contribution
plan ��������������������������������������������������������������
Improve the excise tax on high cost employer-sponsored health coverage ���������������������
2,467
5,716

.........
226
46
.........
5
.........
97
.........

.........
.........

.........
.........
.........
.........
.........
.........
.........
.........

.........

137

.........

6

47
.........

231

959

24,610

822

550
8,926

.........

147

.........

2

49
.........

235

1,556

24,334

.........

540
9,065

66

155

.........

–4

50
.........

240

1,672

24,672

.........

547
9,160

6,495

112

169

.........

–19

51
.........

245

1,722

25,639

.........

560
9,281

6,628

138

181

.........

–37

52
.........

250

1,779

26,409

.........

572
9,429

6,756

5,375

172

196

.........

–61

53
.........

255

1,885

27,281

.........

587
9,563

6,894

5,778

41
2,037

6,387

5,089

209

209

.........

–91

55
.........

260

1,989

28,074

.........

601
9,703

7,028

6,090

4,652

254

230

.........

–127

56
.........

265

2,119

29,106

.........

615
9,841

7,176

6,465

5,009

314

246

.........

–172

57
.........

270

2,221

29,731

.........

629
10,016

7,322

6,272

5,492

178

705

.........

–10

243
.........

1,177

5,909

104,971

3,289

2,238
38,469

26,233

18,809

15,933

.........
.........

6,255

4,561

4,277

468

4,622

4,081

.........

4,518

3,909

19

3,720

.........

.........

–339
–113
–403
–4,498

1,265

1,767

.........

–498

516
.........

2,477

15,902

245,572

3,289

5,242
87,021

61,409

48,789

39,822

–299,415

–153,146
–549,313

–1,063

–741
–296
–948
–10,207

2017–2021 2017–2026

4,459

3,539

.........

–109

–84
–40
–119
–1,241

2026

684

.........

–109

–82
–38
–114
–1,189

2025

.........

–109

–80
–36
–109
–1,140

2024

–275,462

–109

–79
–35
–104
–1,092

2023

.........

–109

–77
–34
–99
–1,047

2022

......... –35,930 –59,883 –59,883 –59,883 –59,883 –23,953

–109

–76
–33
–95
–1,004

2021

–79,774
–265,156

–109

–73
–32
–91
–961

2020

......... –9,983 –18,245 –18,191 –17,435 –15,920 –14,328 –13,949 –14,432 –15,546 –15,117
17 –33,438 –61,418 –59,832 –55,925 –54,543 –54,969 –56,357 –56,225 –57,647 –58,959

–109

–72
–31
–87
–921

2019

–518

–82

.........

–70
–16
–82
–883

2018

Totals

–109

–48
–1
–48
–729

2017

.........
.........
.........
.........

2016

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

152
SUMMARY TABLES

Total, reforms to retirement and health
benefit plans ��������������������������������������������
Reforms to capital gains taxation, upper-income
tax benefits, and the taxation of financial
institutions:
Reduce the value of certain tax expenditures ���
Reform the taxation of capital income �����������
Implement the Buffett Rule by imposing a
new “Fair Share Tax” ����������������������������������
Impose a financial fee �������������������������������������
Total, reforms to capital gains taxation,
upper-income tax benefits, and the taxation of financial institutions �������������������
Loophole closers:
Require current inclusion in income of
accrued market discount and limit the
accrual amount for distressed debt ������������
Require that the cost basis of stock that is a
covered security must be determined using
an average cost basis method ���������������������
Tax carried (profits) interests as ordinary
income ����������������������������������������������������������
Require non-spouse beneficiaries of deceased
IRA owners and retirement plan participants to take inherited distributions over
no more than five years ������������������������������
Limit the total accrual of tax-favored retirement benefits �����������������������������������������������
Rationalize Net Investment Income and
SECA taxes ��������������������������������������������������
Limit Roth conversions to pre-tax dollars �����
Eliminate deduction for dividends on stock
of publicly-traded corporations held in
ESOPs ����������������������������������������������������������
Repeal exclusion of net unrealized appreciation in employer securities �������������������������
Disallow the deduction for charitable contributions that are a prerequisite for purchasing tickets to college sporting events ��
Total, loophole closers �����������������������������
Modify estate and gift tax provisions:
Restore the estate, gift, and generation-skipping transfer (GST) tax parameters in effect in 2009 �����������������������������������
Expand requirement of consistency in value
for transfer and income tax purposes ��������
2,179

2020
2,280

2021
2,363

2022
2,500

2023
2,631

2024
2,797

2025

2026

–7,848
62 –1,317 –3,102 –4,035 –4,136 –4,170 –4,240 –4,334 –4,388
–5,653 –11,084 –10,949 –11,163 –11,420 –11,683 –11,952 –12,226 –12,508 –12,795

–1,616

.........

–654

23

23

–1,062

–1,079

–142

–143

–169

–174

–185

–198

–211

–228

–243

.........

12

–1,044

–3,828

–718

–1,029

.........

–4

–1,028

–3,606

–780

–1,121

–744

......... –15,717 –17,102 –18,415 –20,027 –21,695 –23,660 –25,815 –28,303 –31,020

–4

–1,011

–3,465

–841

–1,213

–713

–79

.........

–13

–995

–3,084

–891

–1,472

–684

–69

–2,380

–12,543

–1,213

–98

–4,582

–628

–71,261

–1,204
–151,634

–28

–978

–2,947

–853

–1,932

–657

–58

.........
–150
–237
–255
–272
–290
–308
–327
–348
–369
–391
......... –21,878 –29,796 –31,668 –33,316 –34,976 –36,050 –37,270 –38,554 –40,052 –41,706

–27

–962

–2,639

–660

–2,351

–634

–50

–88

–16

.........

–945

–2,406

–471

–2,420

–539

–42

24

–702

.........

–2,302

–285

–2,520

–377

–34

–117,565
–51

–111

.........

–2,633

–223

–28

......... –16,660 –23,276 –24,773 –25,913 –26,943 –28,124 –29,421 –30,816 –32,163 –33,570
.........
.........
–5
–10
–16
–20
–20
–21
–28
–32
–99

–2,619

.........

–74

–20

–11,910

.........

.........

–12

–37,508
–111,433

–1,693

–201,754

–2,947
–345,266

–10

–9,806

–271,659
–251

–29,978

–6,264

–19,310

–4,645

–396

–431,666 –1,029,687

–16,240
–50,269

–4,085

–4

.........

......... –59,350 –86,094 –87,851 –95,795 –102,576 –107,567 –113,594 –119,625 –125,621 –131,614

.........
.........

–645,538
–235,208

21,429

2017–2021 2017–2026

–259,866
–105,291

1,989

2019

......... –31,092 –50,403 –54,946 –59,515 –63,910 –68,322 –72,776 –77,183 –81,525 –85,866
......... –14,757 –24,669 –20,639 –22,015 –23,211 –23,426 –24,696 –25,976 –27,254 –28,565

1,380

2018
8,202

374

2017

Totals

2,936

.........

2016

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

THE BUDGET FOR FISCAL YEAR 2017

153

Modify transfer tax rules for grantor retained annuity trusts (GRATs) and other
grantor trusts ����������������������������������������������
Limit duration of GST tax exemption ������������
Extend the lien on estate tax deferrals where
estate consists largely of interest in closely
held business �����������������������������������������������
Modify GST tax treatment of Health and
Education Exclusion Trusts �����������������������
Simplify gift tax exclusion for annual gifts ���
Expand applicability of definition of executor ���
Total, modify estate and gift tax provisions ���
Other revenue raisers:
Impose an oil fee 13 �������������������������������������������
Increase and modify Oil Spill Liability Trust
Fund financing 13 �����������������������������������������
Reinstate Superfund taxes 13 ��������������������������
Increase tobacco taxes and index for
inflation 13 ����������������������������������������������������
Make unemployment insurance surtax permanent 13 ������������������������������������������������������
Total, other revenue raisers ��������������������
Reduce the tax gap and make reforms:
Expand information reporting:
Improve information reporting for certain
businesses and contractors ���������������������
Provide an exception to the limitation on
disclosing tax return information to
expand TIN matching beyond forms
where payments are subject to backup
withholding ���������������������������������������������
Provide for reciprocal reporting of information in connection with the implementation of FATCA �������������������������������
Require Form W–2 reporting for employer
contributions to defined contribution
plans ��������������������������������������������������������
Improve compliance by businesses:
Increase certainty with respect to worker
classification ��������������������������������������������
Increase information sharing to administer excise taxes 13 �������������������������������������
Provide authority to readily share information about beneficial ownership
information of U.S. companies with law
enforcement ���������������������������������������������
Strengthen tax administration:
–141
–2,359

–29

–143
–2,399

–31

–144
–2,445

–34

–147
–2,492

–36

–638
–10,324

–106,750

127
–839
.........
–78,167

–102

–15

.........
.........
.........
–93
–4

.........

.........

.........
.........
.........
–5
.........

.........

–1

–9

–451

.........

.........

.........

–36

–2

–13

–871

.........

.........

.........

–60

–9

–14

–1,038

.........

.........

.........

–82

–6

–16

–1,127

.........

.........

.........

–85

–4

–17

–1,220

.........

.........

.........

–89

–3

–17

–1,321

.........

.........

.........

–93

–3

–18

–1,428

.........

.........

.........

–97

–3

–18

–1,544

.........

.........

.........

–102

–3

–19

–1,668

.........

.........

.........

–106

–18

–56

–3,580

.........

.........

.........

–278

–7,712
–186,079

–139
–2,300

–28

......... –1,172 –1,604 –1,624 –1,645 –1,667 –1,690 –1,712 –1,737 –1,762 –1,789
......... –20,065 –31,173 –38,142 –45,154 –51,545 –57,386 –57,637 –57,677 –57,727 –57,786

–138
–2,276

–27

–60,655

–138
–2,202

–26

–5,464
.........

–34

–145

–10,761

.........

.........

.........

–765

–16,402
–474,292

–115,149

–1,352
–22,319

–319,070

247
–3,680
.........
–226,289

–260

–19,149
.........

2017–2021 2017–2026

Totals

–9,902

–135
–2,163

–25

–9,982 –12,910 –12,715 –12,719 –12,329 –11,880 –11,436 –10,877 –10,399

–133
–2,087

–24

.........

–3,405
.........

2026

–94
–1,596

–3,194
.........

2025

.........
.........

–2,743
.........

2024

–7,221 –14,439 –21,505 –28,450 –35,135 –41,377 –41,989 –42,521 –42,977 –43,456

–2,374
.........

2023

.........

–1,969
.........

2022

.........
35
33
30
29
27
26
24
23
20
.........
–84
–160
–259
–336
–413
–453
–548
–657
–770
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
......... –17,055 –18,638 –20,317 –22,157 –24,263 –26,688 –29,324 –32,393 –35,454

–1,622
.........

2021

.........
.........
.........
.........

–1,478
.........

2020

.........

–1,241
.........

2019

.........

–1,123
.........

2018

.........
.........

2017

.........
.........

2016

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

154
SUMMARY TABLES

Modify the conservation easement deduction and pilot a conservation credit �������
Impose liability on shareholders to collect
unpaid income taxes of applicable corporations ������������������������������������������������������
Revise offer-in-compromise application
rules ���������������������������������������������������������
Make repeated willful failure to file a tax
return a felony �����������������������������������������
Facilitate tax compliance with local jurisdictions ����������������������������������������������������
Improve investigative disclosure statute ���
Allow the IRS to absorb credit and debit
card processing fees for certain tax
payments �������������������������������������������������
Provide the IRS with greater flexibility to
address correctable errors 12 �������������������
Enhance electronic filing of returns �����������
Improve the whistleblower program ����������
Index all civil tax penalties for inflation ����
Combat tax-related identity theft ��������������
Allow States to send notices of intent to
offset Federal tax refunds to collect
State tax obligations by regular firstclass mail instead of certified mail ���������
Accelerate information return filing due
dates 12 ������������������������������������������������������
Increase oversight of tax return
preparers 12 ����������������������������������������������
Enhance administrability of the appraiser
penalty �����������������������������������������������������
Request a program integrity cap adjustment for the reemployment services
and eligibility assessment (RESEA)
program 13 ������������������������������������������������
Total, reduce the tax gap and make
reforms �������������������������������������������������
Simplify the tax system:
Modify adoption credit to allow tribal determination of special needs ���������������������������
Repeal non-qualified preferred stock designation ���������������������������������������������������������������
Reform excise tax based on investment
income of private foundations ��������������������
Simplify arbitrage investment restrictions ���
Simplify single-family housing mortgage
bond targeting requirements ����������������������
–6

2017

–395
–1
.........
–1
.........
–2
–31
.........
.........
.........
.........

.........
–3
–14
.........

.........
–565
.........
–33
5
.........
.........

.........

2016

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........

.........
–5
.........
.........
.........
.........
.........

1

5
2

–55

.........

–1,043

2

.........

–31

–5

.........

–62
.........
.........
.........
.........

–2

–1
.........

.........

–2

–423

–22

2018

3

6
10

–55

.........

–1,539

7

.........

–34

–11

.........

–62
.........
.........
.........
.........

–2

–1
.........

.........

–2

–442

–46

2019

5

6
18

–53

1

–1,778

10

.........

–37

–12

.........

–63
–1
.........
.........
.........

–2

–2
–1

–1

–2

–461

–63

2020

7

6
28

–50

1

–1,903

11

.........

–41

–12

.........

–65
–1
.........
.........
.........

–2

–2
–1

–1

–2

–481

–72

2021

10

6
38

–46

1

–2,034

10

.........

–45

–13

.........

–66
–1
.........
.........
.........

–2

–2
–1

–1

–2

–502

–79

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

12

6
46

–41

1

–2,171

9

.........

–49

–13

.........

–68
–1
.........
.........
.........

–2

–2
–1

–1

–2

–524

–83

2023

17

7
58

–36

1

–2,321

9

.........

–54

–13

.........

–70
–2
.........
.........
.........

–2

–2
–2

–2

–2

–546

–89

2024

20

7
68

–32

1

–2,478

7

.........

–57

–13

.........

–72
–2
.........
.........
.........

–2

–2
–2

–2

–2

–570

–94

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

22

7
76

–29

1

–2,649

5

.........

–62

–14

.........

–74
–2
.........
.........
.........

–2

–2
–2

–2

–2

–595

–101

2026

16

28
58

–246

2

–6,828

30

.........

–157

–43

.........

–283
–2
.........
.........
.........

–10

–7
–2

–2

–9

–2,202

–209

97

61
344

–430

7

–18,481

70

.........

–424

–109

.........

–633
–10
.........
.........
.........

–20

–17
–10

–10

–19

–4,939

–655

2017–2021 2017–2026

Totals

THE BUDGET FOR FISCAL YEAR 2017

155

.........

2017

.........
368
20

.........
.........
63
434
.........

.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........
.........
.........
.........
.........
.........

1

.........
.........

.........

.........

.........

.........

1,690

108
624

.........

93

62

.........
327

–19
99

2018
3

.........
.........

.........

.........

.........

.........

2,343

58
605

.........

51

65

.........
287

–21
198

2019
5

.........
.........

.........

.........

.........

.........

2,586

23
585

.........

6

68

.........
248

–23
281

2020
7

.........
.........

.........

.........

.........

.........

2,858

25
621

.........

6

69

.........
209

–25
338

2021
9

.........
.........

.........

.........

.........

.........

3,147

26
634

.........

6

71

.........
170

–27
370

2022

.........
.........

.........

.........

.........

.........

3,445

28
1,107

.........

491

72

.........
132

–29
378

11

2023

.........
.........

.........

.........

.........

.........

3,724

29
1,793

.........

1,188

74

.........
94

–30
378

13

2024

.........
.........

.........

.........

.........

.........

4,003

30
2,418

.........

1,830

76

.........
57

–32
378

15

2025

.........
.........

.........

.........

.........

.........

4,318

32
3,010

.........

2,416

79

.........
44

–33
378

17

2026

12 –164,702–258,158 –268,282 –282,146 –296,185 –273,669 –259,384 –267,504 –277,594 –288,173

–13
24

.........

2016

.........
.........

.........

.........

.........

.........

28,114

422
11,831

.........

6,087

656

.........
1,936

–252
2,822

81

–1,269,473 –2,635,797

.........
.........

.........

.........

.........

.........

9,477

277
2,869

.........

156

284

.........
1,439

–101
940

16

2017–2021 2017–2026

Totals

Grand total, mandatory and receipt proposals ��������������������������������������������������������������
–613 –135,225–223,552 –240,506 –265,912 –293,382 –280,795 –282,067 –300,451 –321,905 –354,237 –1,158,577 –2,698,032
Note: For receipt effects, positive figures indicate lower receipts. For outlay effects, positive figures indicate higher outlays. For net costs, positive figures indicate higher
deficits.
1
Based on placeholder credit subsidy rate. Actual approvals would be evaluated and estimated for each fund application individually.
2
In the Fall of 2015, the President took action within his existing authority to implement eligibility expansions to income-based repayment plans proposed in the 2015 Budget. However, the Administration continues to seek to work with the Congress to create a unified, simple, and better targeted PAYE program.
3
The estimates for this proposal include effects on receipts. The receipt effects included in the totals above are as follows:

Total, tax proposals �����������������������������������������

Streamline private activity limits on governmental bonds �����������������������������������������������
Repeal technical terminations of partnerships �������������������������������������������������������������
Repeal anti-churning rules of section 197 �����
Repeal special estimated tax payment provision for certain insurance companies ���������
Repeal the telephone excise tax 13 ������������������
Increase the standard mileage rate for automobile use by volunteers ����������������������������
Consolidate contribution limitations for
charitable deductions and extend the
carryforward period for excess charitable
contribution deduction amounts ����������������
Exclude from gross income subsidies from
public utilities for purchase of water runoff management �������������������������������������������
Provide relief for certain accidental dual
citizens ���������������������������������������������������������
Total, simplify the tax system ��������������������
Trade initiatives:
Enact the Trans-Pacific Partnership Trade
Agreement 13 ������������������������������������������������
Other initiatives:
Allow offset of Federal income tax refunds to
collect delinquent State income taxes for
out-of-State residents ���������������������������������
Improve disclosure for child support enforcement �������������������������������������������������������������
Authorize the limited sharing of business tax
return information to improve the accuracy of important measures of the economy ��
Eliminate certain reviews conducted by the
U.S. Treasury Inspector General for Tax
Administration (TIGTA) �����������������������������
Modify indexing to prevent deflationary
adjustments �������������������������������������������������
Total, other initiatives ��������������������������������

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

156
SUMMARY TABLES

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2017–2021 2017–2026

Totals

Expand and simplify the tax credit provided
to qualified small employers for non-elective contributions to employee health
insurance �����������������������������������������������������
Designate Promise Zones ��������������������������������
Modify and permanently extend renewable
electricity production tax credit and investment tax credit �������������������������������������

21
27

2017

58

.........
.........

2016

.........

155

23
29

2018

281

19
29

2019

453

17
31

2020

695

12
31

2021

973

14
33

2022

1,300

10
35

2023

1,695

7
37

2024

2,117

4
37

2025

2,629

2
39

2026

1,642

92
147

10,356

129
328

2017–2021 2017–2026

Totals

Reauthorize special assessment from domestic
nuclear utilities �����������������������������������������������
.........
–208
–212
–217
–222
–227
–232
–237
–243
–248
–254
–1,086
–2,300
Create State option to provide 12-month continuous Medicaid eligibility for adults �����������
.........
.........
–37
–77
–158
–165
–174
–181
–191
–200
–209
–437
–1,392
Extend CHIP funding through 2019 ������������������
.........
.........
–66
–454
–528
.........
.........
.........
.........
.........
.........
–1,048
–1,048
Establish user fee for Electronic Visa Update
System �������������������������������������������������������������
.........
–31
–25
–27
–31
–27
–31
–29
–34
–24
–28
–141
–287
Establish an AML hardrock reclamation fund ��
.........
.........
–200
–200
–200
–200
–200
–200
–200
–200
–200
–800
–1,800
Increase coal AML fee to pre–2006 levels ����������
.........
–49
–50
–52
–53
–54
.........
.........
.........
.........
.........
–258
–258
Strengthen Unemployment Insurance (UI)
system solvency �����������������������������������������������
.........
......... –3,128 –3,185 –3,922 –4,303 –5,425 –6,802 –6,068 –6,346 –7,114
–14,538
–46,293
Modernize UI �������������������������������������������������������
.........
.........
.........
–514
–468
–415
–429
–410
–560
–585
–604
–1,397
–3,985
Improve UI program integrity ����������������������������
.........
.........
1
7
16
29
43
60
96
61
99
53
412
Implement cap adjustments for UI program
integrity �����������������������������������������������������������
.........
.........
2
8
13
14
13
11
10
8
6
37
85
Create mandatory Reemployment Services and
Eligibility Assessment program ���������������������
.........
.........
.........
4
24
65
168
195
216
267
293
93
1,232
Implement tax enforcement program integrity
cap adjustment ������������������������������������������������
.........
–278 –1,585 –3,263 –5,008 –6,763 –8,327 –9,264 –9,590 –9,737 –9,814
–16,897
–63,629
Reform inland waterways financing ������������������
.........
–3
–78
–118
–156
–156
–156
–156
–156
–155
–155
–511
–1,289
Enact changes to the military retirement
reform enacted in the 2016 National Defense
Authorization Act ��������������������������������������������
.........
.........
53
85
94
110
126
144
154
169
180
342
1,115
Enact immigration reform ����������������������������������
......... –1,000 –7,000 –20,000 –30,000 –40,000 –45,000 –55,000 –64,000 –74,000 –84,000
–98,000
–420,000
Total receipt effects of mandatory proposals �
......... –1,569 –12,325 –28,003 –40,599 –52,092 –59,624 –71,869 –80,566 –90,990 –101,800
–134,588
–539,437
4
Makes assumptions regarding the timing and magnitudes of future droughts in the SWPA region.
5
Health savings in Table S–2 includes all HHS health savings and OPM FEHBP savings.
6
Authorization expires in 2025.
7
Unemployment insurance reform also includes the proposal to make the unemployment insurance surtax permanent. On net, the package increases the deficit by $1.1
billion over 10 years.
8
Revenues are net of the 20 percent Treasury offset.
9
This proposal also saves less than $500,000 in SSI over 10 years.
10
This proposals costs less than $500,000 in each year and over five and 10 years.
11
Savings of $1 million over five years and $4 million over 10 years.
12
The estimates for this proposal include effects on outlays. The outlay effects included in the totals above are as follows:

2016

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9.  Mandatory and Receipt Proposals—Continued

THE BUDGET FOR FISCAL YEAR 2017

157

Provide a carbon dioxide investment and
sequestration tax credit ������������������������������
Provide America Fast Forward Bonds and
expand eligible uses ������������������������������������
Allow eligible uses of America Fast Forward
Bonds to include financing all qualified
private activity bond program categories ��
Reform child care tax incentives ��������������������
Simplify and better target tax benefits for
education �����������������������������������������������������
Expand the EITC for workers without qualifying children ����������������������������������������������
Simplify the rules for claiming the EITC for
workers without qualifying children ����������
Provide a second-earner tax credit �����������������
Provide for automatic enrollment in IRAs,
including a small employer tax credit,
increase the tax credit for small employer
plan start-up costs, and provide an additional tax credit for small employer plans
newly offering auto-enrollment ������������������
Provide the IRS with greater flexibility to
address correctable errors ��������������������������
Accelerate information return filing due
dates �������������������������������������������������������������
Increase oversight of tax return preparers ����
Total, outlay effects of receipt proposals ����
13
Net of income offsets.
.........

2017

239
49
.........
.........
273
24
.........

.........
–26
–1
–2
662

.........

2016

.........
.........
.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

–3
–14
13,599

–53

126

484
739

5,468

4,377

221
962

1,085

.........

2018

–6
–15
15,574

–52

198

475
735

5,577

4,521

475
1,009

2,328

.........

2019

–7
–16
17,428

–53

203

481
735

5,677

4,479

742
1,051

3,635

.........

2020

–7
–18
19,812

–54

207

492
740

5,796

4,663

1,020
1,091

5,002

142

2021

–8
–19
22,536

–55

215

503
754

5,906

5,079

1,307
1,147

6,407

280

2022

(Deficit increases (+) or decreases (–) in millions of dollars)

–8
–21
24,771

–56

222

516
758

6,020

5,255

1,599
1,182

7,836

123

2023

–8
–23
27,720

–58

228

528
760

6,134

5,679

1,894
1,227

9,282

338

2024

–8
–24
30,154

–59

230

541
759

6,262

5,870

2,192
1,264

10,743

226

2025

Table S–9.  Mandatory and Receipt Proposals—Continued

–8
–26
32,311

–61

236

553
754

6,383

5,833

2,492
1,268

12,217

.........

2026

–24
–65
67,075

–238

734

1,956
2,949

22,791

18,040

2,507
4,113

12,289

142

–64
–178
204,567

–527

1,865

4,597
6,734

53,496

45,756

11,991
10,201

58,774

1,109

2017–2021 2017–2026

Totals

158
SUMMARY TABLES

–4
.........
.........

–4
.........
.........

521
504
1,025

Proposed Discretionary Policy by Category:
Defense Category �����������������������������������������������
Non-Defense Category ���������������������������������������

Total, Base Discretionary Funding ��������������������

1,113

Grand Total, Discretionary
Budget Authority ��������������������������������������������

Memorandum: Current Law and Proposed
Changes to Existing BBEDCA Caps 5
Joint Committee Reductions �����������������������������������
2017 Budget Proposed Addback to caps �����������������

87

Total, Cap Adjustments and Other ���������������������
1,163

83

2017
N/A
N/A

1,149

84

2018
–91
+71

1,145

15

2019
–90
+61

1,163

15

11
.........
3
1
.........

593
555

–5
–*
–1

+31
+31

1,092

562
530

2019

3
Discretionary Cap Adjustments and Other Funding (not included above): 
4
Overseas Contingency Operations  ������������������
74
74
74
11
Disaster Relief ����������������������������������������������������
7
7
7
.........
Program Integrity ����������������������������������������������
1
2
3
3
Wildfire Suppression ������������������������������������������
.........
.........
1
1
Other Emergency/Supplemental Funding ������������
5
*
.........
.........

584
546

–4
–*
–1

+35
+36

1,065

549
516

2018

1,147

1,065

551
514

–4
.........
.........

.........
.........

1,070

551
519

2017

1,130

1,080

548
532

.........
.........

1,085

.........
.........

1,030

Total, Base Discretionary Funding ��������������������

548
536

2016

Discretionary Policy Changes to Baseline Caps:
Proposed Cap Changes: 2
Defense Category ������������������������������������������
Non-Defense Category ����������������������������������
Non-Defense Category Reclassifications:
Surface Transportation Programs ����������������
Program Integrity �����������������������������������������
Contract Support Costs ��������������������������������

521
508

Discretionary Adjusted Baseline by Category: 1
Defense Category �����������������������������������������������
Non-Defense Category ���������������������������������������

2015

Actual Enacted Request

2020
–89
+46

1,174

16

11
.........
3
1
.........

1,158

599
560

–5
–*
–1

+23
+23

1,119

576
543

2020

(Budget authority in billions of dollars)

2021
–88
+49

1,205

16

11
.........
4
1
.........

1,188

614
574

–5
–*
–1

+24
+25

1,146

590
556

2021

20182021
–359
+227

1,213

5

.........
.........
4
1
.........

1,208

624
584

–5
–*
–1

–36
–14

1,264

660
604

2022

Outyears

1,237

5

.........
.........
4
1
.........

1,232

636
596

–5
–*
–1

–40
–17

1,295

676
619

2023

1,261

5

.........
.........
4
1
.........

1,256

648
608

–5
–*
–1

–44
–20

1,327

692
634

2024

1,287

6

.........
.........
4
1
.........

1,281

661
620

–5
–*
–1

–48
–23

1,359

709
650

2025

1,313

6

.........
.........
4
1
.........

1,307

674
633

–5
–*
–1

–53
–26

1,392

727
666

2026

6,292
5,836

6,184
5,789

–48
–2
–11

–108
+14

174

118
7
37
13
.........

5,836 12,147

146

118
7
16
6
.........

5,690 11,973

2,941
2,748

–23
–1
–5

+113
+114

5,490 12,128

2,828
2,662

20172026

Totals
20172021

Table S–10.  Funding Levels for Appropriated (“Discretionary”) Programs by Category

THE BUDGET FOR FISCAL YEAR 2017

159

* $500 million or less.
1
The discretionary funding levels from OMB’s adjusted baseline are consistent with the caps in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA)
with separate categories of funding for “defense” (or Function 050) and “non-defense” for 2016–2021. These baseline levels assume Joint Committee enforcement cap reductions are in effect through 2021. For 2022 through 2026, programs are assumed to grow at current services growth rates with Joint Committee enforcement no longer
in effect, consistent with current law. The levels shown here for the non-defense category do not include the reclassification of surface transportation programs shown
later in the table.
2
The 2017 Budget provides a detailed request for 2017 at the cap levels enacted in the Bipartisan Budget Act of 2015 and, after 2017, continues the framework of previous
President’s Budgets by providing additional investments in both defense and non-defense programs above the baseline levels that include Joint Committee enforcement.
3
Where applicable, amounts in 2015 through 2026 are existing or proposed cap adjustments designated pursuant to Section 251(b)(2) of BBEDCA. The 2017 Budget
proposes new cap adjustments for program integrity and wildfire suppression activities. For 2018 through 2026, the cap adjustment levels for wildfire suppression are
a placeholder that increase at the policy growth rates in the President’s Budget. The existing disaster relief cap adjustment ceiling (which is determined one year at a
time) would be reduced by the amount provided for wildfire suppression activities under the cap adjustment for the preceding fiscal year. The amounts will be refined in
subsequent Budgets as data on the average costs for wildfire suppression are updated annually.
4
The 2017 Budget includes placeholder amounts of nearly $11 billion per year for Government-wide OCO funding from 2018 to 2021. The placeholder amounts continue
to reflect a total OCO budget authority cap from 2013 to 2021 of $450 billion, in line with previous years’ policy, but do not reflect any specific decisions or assumptions
about OCO funding in any particular year.
5
Under Joint Committee enforcement, the current law defense and non-defense discretionary caps specified in BBEDCA are estimated to be reduced by a combined $359
billion over 2018 through 2021. The 2017 Budget proposes to restore more than three-fifths of those reductions.

(Budget authority in billions of dollars)

Table S–10.  Funding Levels for Appropriated (“Discretionary”) Programs by Category

160
SUMMARY TABLES

1.1
19.5
.........

1.1
18.9
.........
1,025.4

73.7
64.2
0.2
9.3
.........

Subtotal, Base Discretionary Funding............

Discretionary Cap Adjustments and Other
Funding (not included above): 5
Overseas Contingency Operations ��������������
Defense ������������������������������������������������������������
Homeland Security �����������������������������������������
State and Other International Programs ������
Overseas Contingency Operations Outyears 6 ��

73.7
58.6
0.2
14.9
.........

1,080.2

25.2
9.4
1.4
521.7
68.3
29.6
12.5
84.6
41.1
37.5
13.2
28.7
12.2
37.9
14.3
12.6
71.6
6.0
8.1
0.6
19.3
7.5
0.9
9.3

24.9
8.6
1.1
496.1
66.9
27.4
11.4
80.3
39.9
30.4
12.2
26.3
11.9
40.9
13.8
12.2
65.1
5.6
8.1
–0.4
18.0
7.3
0.9
9.0

2016

Base Discretionary Funding by Agency: 1
Agriculture ����������������������������������������������������������
Commerce ������������������������������������������������������������
Census Bureau ������������������������������������������������
Defense 2 ���������������������������������������������������������������
Education �������������������������������������������������������������
Energy �����������������������������������������������������������������
National Nuclear Security Administration 2 ���
Health & Human Services 3 ��������������������������������
Homeland Security ���������������������������������������������
Housing and Urban Development ����������������������
Interior �����������������������������������������������������������������
Justice ������������������������������������������������������������������
Labor ��������������������������������������������������������������������
State and Other International Programs ����������
Transportation ����������������������������������������������������
Treasury ��������������������������������������������������������������
Veterans Affairs ��������������������������������������������������
Corps of Engineers ����������������������������������������������
Environmental Protection Agency ���������������������
General Services Administration �����������������������
National Aeronautics & Space Administration ���
National Science Foundation ������������������������������
Small Business Administration �������������������������
Social Security Administration 3 �������������������������
Corporation for National & Community
Service �������������������������������������������������������������
Other Agencies ����������������������������������������������������
Allowances 4 ���������������������������������������������������������

2015

1.1
20.5
–11.5

24.9
10.1
1.8
556.7
70.3
30.1
11.9
87.2
41.8
39.0
13.0
30.0
12.8
46.5
14.7
13.6
78.5
4.7
8.4
0.4
18.6
8.1
0.7
9.8

2018

1.1
21.2
–15.4

25.2
11.4
2.9
564.8
71.3
32.2
12.4
88.9
42.5
39.7
13.2
30.6
13.1
47.4
15.0
13.9
79.4
4.8
8.6
0.4
19.0
8.3
0.7
10.1

2019

1.2
21.9
–26.9

25.8
15.7
7.1
570.4
72.3
34.0
12.6
90.7
43.3
40.5
13.5
31.2
13.3
48.3
15.3
14.2
81.0
4.9
8.8
0.4
19.4
8.5
0.8
10.5

2020

1.2
22.7
–19.1

26.2
10.4
1.6
585.2
73.2
35.8
13.0
92.5
44.0
41.2
13.7
31.8
13.5
49.2
15.6
14.5
82.6
5.0
8.9
0.4
19.8
8.6
0.8
10.7

2021

1.2
23.2
–23.3

26.8
10.2
1.2
597.2
74.3
36.5
13.3
94.3
44.9
42.0
14.0
32.4
13.7
50.2
15.9
14.8
84.3
5.1
9.1
0.4
20.2
8.8
0.8
10.9

2022

Outyears

1.2
23.6
–23.9

27.3
10.4
1.3
609.4
75.3
37.2
13.5
96.2
45.8
42.7
14.3
33.1
14.0
51.2
16.2
15.1
86.0
5.2
9.3
0.4
20.6
9.0
0.8
11.1

2023

1.3
24.1
–24.8

27.9
10.6
1.3
621.9
76.3
38.0
13.8
98.2
46.7
43.5
14.6
33.7
14.2
52.2
16.6
15.5
87.7
5.3
9.5
0.4
21.0
9.1
0.8
11.3

2024

1.3
24.5
–24.6

28.5
11.1
1.5
634.7
77.4
38.7
14.1
100.1
47.6
44.3
14.9
34.4
14.5
53.3
16.9
15.8
89.4
5.4
9.7
0.4
21.4
9.3
0.8
11.5

2025

1.3
25.0
–24.6

29.1
11.4
1.7
647.7
78.5
39.5
14.4
102.1
48.5
45.1
15.2
35.1
14.7
54.3
17.2
16.2
91.2
5.5
9.9
0.4
21.8
9.5
0.9
11.7

2026

73.7
58.8
.........
14.9
.........

11.0
.........
.........
.........
11.0

11.0
.........
.........
.........
11.0

11.0
.........
.........
.........
11.0

11.0
.........
.........
.........
11.0

.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

.........
.........
.........
.........
.........

1,065.2 1,130.2 1,147.4 1,158.4 1,188.4 1,207.8 1,231.7 1,255.5 1,281.4 1,307.3

1.1
20.3
.........

23.4
9.7
1.6
523.9
69.4
30.2
12.9
77.9
40.6
38.0
12.9
18.1
12.8
37.8
12.0
12.6
75.1
4.6
8.3
0.4
18.3
7.6
0.7
9.6

2017

Actual Enacted Request

(Budget authority in billions of dollars)

12.0
227.0
–194.2

265.0
111.0
22.1
5,912.1
738.3
352.3
131.9
928.1
445.7
416.0
139.3
310.4
136.6
490.3
155.5
146.1
835.2
50.5
90.5
4.0
200.0
86.8
7.8
107.0

117.6
58.8
.........
14.9
43.9

117.6
58.8
.........
14.9
43.9

5,689.6 11,973.2

5.7
106.6
–73.0

125.4
57.3
15.1
2,801.1
356.5
162.4
62.8
437.2
212.2
198.4
66.3
141.6
65.4
229.1
72.6
68.7
396.7
24.0
43.0
1.9
95.0
41.0
3.7
50.7

20172026

Totals
20172021

Table S–11.  Funding Levels for Appropriated (“Discretionary”) Programs by Agency

THE BUDGET FOR FISCAL YEAR 2017

161

6.5
0.1
6.4
.........
.........
.........
.........
.........
5.4
.........
0.1
2.8
2.5

Disaster Relief ��������������������������������������������������
Agriculture ������������������������������������������������������
Homeland Security �����������������������������������������
Housing and Urban Development ������������������
Small Business Administration ���������������������

Wildfire Suppression 7 �������������������������������������
Agriculture ������������������������������������������������������
Interior �������������������������������������������������������������

Other Emergency Funding ����������������������������
Agriculture ������������������������������������������������������
Defense ������������������������������������������������������������
Health & Human Services ������������������������������
State and Other International Programs ������

0.4
0.3
.........
.........
0.1

.........
.........
.........

7.1
0.1
6.7
0.3
.........

1.5
0.4
.........
.........
1.2

.........
.........
.........
.........
.........

1.2
0.9
0.3

6.9
.........
6.7
.........
0.2

2.5
0.4
*
0.5
1.5

.........
.........
.........
.........
.........

1.2
0.9
0.3

.........
.........
.........
.........
.........

2.8
0.4
.........
0.9
1.5

2018

.........
.........
.........
.........
.........

1.2
0.9
0.3

.........
.........
.........
.........
.........

3.2
0.5
.........
1.3
1.4

2019

.........
.........
.........
.........
.........

1.2
0.9
0.3

.........
.........
.........
.........
.........

3.5
0.5
.........
1.7
1.3

2020

.........
.........
.........
.........
.........

1.2
0.9
0.3

.........
.........
.........
.........
.........

3.8
0.5
.........
2.0
1.3

2021

.........
.........
.........
.........
.........

1.3
1.0
0.3

.........
.........
.........
.........
.........

4.0
0.5
.........
2.1
1.3

2022

Outyears

.........
.........
.........
.........
.........

1.3
1.0
0.3

.........
.........
.........
.........
.........

4.1
0.5
.........
2.2
1.4

2023

.........
.........
.........
.........
.........

1.3
1.0
0.3

.........
.........
.........
.........
.........

4.2
0.6
.........
2.2
1.4

2024

.........
.........
.........
.........
.........

1.4
1.0
0.3

.........
.........
.........
.........
.........

4.3
0.6
.........
2.2
1.5

2025

.........
.........
.........
.........
.........

1.4
1.0
0.3

.........
.........
.........
.........
.........

4.4
0.6
.........
2.2
1.5

2026

.........
.........
.........
.........
.........

6.0
4.5
1.5

6.9
.........
6.7
.........
0.2

15.8
2.3
*
6.5
7.0

20172021

.........
.........
.........
.........
.........

12.6
9.5
3.2

6.9
.........
6.7
.........
0.2

36.7
5.1
*
17.4
14.2

20172026

Totals

Grand Total, Discretionary Funding �������������� 1,112.5
1,163.0
1,149.4 1,145.2 1,162.7 1,174.0 1,204.5 1,213.1 1,237.0 1,261.0 1,287.0 1,313.0 5,835.9 12,147.0
* $50 million or less.
1
Amounts in the actual and enacted years of 2015 and 2016 exclude changes in mandatory programs enacted in appropriations bills since those amounts have been rebased
as mandatory, whereas amounts in 2017 are net of these proposals.
2
The Department of Defense (DOD) levels in 2018–2026 include funding that will be allocated, in annual increments, to the National Nuclear Security Administration
(NNSA). Current estimates by which DOD’s budget authority will decrease and NNSA’s will increase are, in millions of dollars: 2018: $1,665; 2019: $1,698; 2020: $1,735;
2021: $1,770; 2018–2026: $16,263. DOD and NNSA are reviewing NNSA’s outyear requirements and these will be included in future reports to the Congress.
3
Funding from the Hospital Insurance and Supplementary Medical Insurance trust funds for administrative expenses incurred by the Social Security Administration that
support the Medicare program are included in the Health and Human Services total and not in the Social Security Administration total.
4
The 2017 Budget includes allowances, similar to the Function 920 allowances used in Budget Resolutions, to represent amounts to be allocated among the respective
agencies to reach the proposed defense and non-defense caps for 2018 and beyond. These levels are determined for illustrative purposes but do not reflect specific policy
decisions.
5
Where applicable, amounts in 2015 through 2026 are existing or proposed cap adjustments designated pursuant to Section 251(b)(2) of BBEDCA.
6
The 2017 Budget includes placeholder amounts of nearly $11 billion per year for Government-wide OCO funding from 2018 to 2021. The placeholder amounts continue
to reflect a total OCO budget authority cap from 2013 to 2021 of $450 billion, in line with previous years’ policy, but do not reflect any specific decisions or assumptions
about OCO funding in any particular year.
7
For 2018 through 2026, the cap adjustment levels are a placeholder that increase at the policy growth rates in the President’s Budget. The existing disaster relief cap
adjustment ceiling (which is determined one year at a time) would be reduced by the amount provided for wildfire suppression activities under the cap adjustment for the
preceding fiscal year. Those amounts will be refined in subsequent Budgets as data on the average costs for wildfire suppression are updated annually.

1.5
0.4
.........
.........
1.1

Program Integrity �������������������������������������������
Health & Human Services ������������������������������
Labor ����������������������������������������������������������������
Treasury ����������������������������������������������������������
SSA�������������������������������������������������������������������

Actual Enacted Request
2015
2016
2017

(Budget authority in billions of dollars)

Table S–11.  Funding Levels for Appropriated (“Discretionary”) Programs by Agency—Continued

162
SUMMARY TABLES

*
2.5

Interest rates, percent: 3
91-day Treasury bills 4 �������������������������������������������������������������
10-year Treasury notes ������������������������������������������������������������
1.8
3.5

2.1

2.6
3.9

2.1

20,345
4.3
2.4
2.4
1.8

2018

3.1
4.1

2.3

21,237
4.4
2.3
2.3
2.0

2019

3.3
4.2

2.2

22,155
4.3
2.3
2.3
2.0

2020

3.4
4.2

2.3

23,121
4.4
2.3
2.3
2.0

2021

3.4
4.2

2.3

24,128
4.4
2.3
2.3
2.0

2022

3.3
4.2

2.3

25,179
4.4
2.3
2.3
2.0

2023

3.3
4.2

2.3

26,272
4.3
2.3
2.3
2.0

2024

2.3

27,413
4.3
2.3
2.3
2.0

2025

2.3

28,603
4.3
2.3
2.3
2.0

2026

4.9

0.7
2.9

1.5

19,510
4.5
2.6
2.5
1.9

2017

6.2
5.3
4.7
4.5
4.6
4.6
4.7
4.7
4.8
4.9
4.9
4.9
Unemployment rate, civilian, percent 3 �������������������������������
* 0.05 percent or less.
Note: A more detailed table of economic assumptions appears in Chapter 2, “Economic Assumptions and Interactions with the Budget,” in the Analytical Perspectives
volume of the Budget.
1
Based on information available as of mid-November 2015.
2
Seasonally adjusted CPI for all urban consumers.
3
Annual average.
4
Average rate, secondary market (bank discount basis).

*
2.1

0.1

18,669
4.0
2.6
2.7
1.4

2016

3.2
4.2

1.6

Consumer Price Index, 2 percent change, year/year ��������

17,948
3.5
2.4
2.2
1.0

2015

Projections

3.2
4.2

17,348
4.1
2.4
2.5
1.6

Gross Domestic Product (GDP):
Nominal level, billions of dollars ���������������������������������������������
Percent change, nominal GDP, year/year ��������������������������������
Real GDP, percent change, year/year ��������������������������������������
Real GDP, percent change, Q4/Q4 �������������������������������������������
GDP chained price index, percent change, year/year �������������

Actual
2014

(Calendar years)

Table S–12.  Economic Assumptions 1

THE BUDGET FOR FISCAL YEAR 2017

163

337
–11
6
332

18,094
19
18,113

Changes in Debt Subject to Statutory Limitation:
Change in debt held by the public �����������������������������������������������
Change in debt held by Government accounts ���������������������������
Change in other factors ���������������������������������������������������������������

Total, change in debt subject to statutory limitation �������������

Debt Subject to Statutory Limitation, End of Year:
Debt issued by Treasury ��������������������������������������������������������������
Adjustment for discount, premium, and coverage 3 ��������������������

Total, debt subject to statutory limitation 4 ����������������������������

19,426

19,407
19

1,313

1,012
301
–1

1,012

337

*
203

–1
–228

396

*

–1

–102

104
13

79
9

397
–*

76

40

–101
–1

616
3.3%

376
240

438
2.5%

215
223

2016

Subtotal, changes in financial assets and liabilities ������
Seigniorage on coins �����������������������������������������������������������������
Total, other transactions affecting borrowing from the
public ����������������������������������������������������������������������������
Total, requirement to borrow from the public (equals
change in debt held by the public) ��������������������������

Unified budget deficit �����������������������������������������������������������
As a percent of GDP ���������������������������������������������������������
Other transactions affecting borrowing from the public:
Changes in financial assets and liabilities:1
Change in Treasury operating cash balance ����������������������
Net disbursements of credit financing accounts:
Direct loan accounts ���������������������������������������������������������
Guaranteed loan accounts �����������������������������������������������
Troubled Asset Relief Program (TARP)
equity purchase accounts ��������������������������������������������
Net purchases of non-Federal securities by the National
Railroad Retirement Investment Trust (NRRIT) �����������
Net change in other financial assets and liabilities 2 ���������

Financing:
Unified budget deficit:
Primary deficit (+)/surplus (–) �������������������������������������������������
Net interest ������������������������������������������������������������������������������

Actual
2015

20,143

20,123
21

718

634
82
2

634

131

131
–*

–1
.........

–*

129
3

.........

503
2.6%

201
303

2017

20,880

20,858
22

736

560
175
2

560

107

107
–*

–1
.........

–*

109
–1

.........

454
2.3%

69
385

2018

(Dollar amounts in billions)

21,694

21,671
23

814

659
152
3

659

109

110
–*

–1
.........

–*

112
–2

.........

549
2.6%

90
460

2019

22,448

22,423
25

754

633
119
3

633

99

99
–*

–1
.........

–*

103
–4

.........

534
2.4%

11
523

2020

23,201

23,175
26

754

649
103
2

649

96

97
–*

–1
.........

–*

103
–6

.........

552
2.4%

–22
574

2021

Estimate

24,004

23,977
27

803

753
48
2

753

93

94
–*

–1
.........

–*

102
–7

.........

660
2.8%

39
621

2022

Table S–13.  Federal Government Financing and Debt

24,839

24,811
28

835

777
56
2

777

100

101
–*

–*
.........

–*

104
–3

.........

677
2.7%

9
668

2023

25,680

25,651
29

840

755
84
2

755

104

105
–*

–1
.........

–*

108
–2

.........

650
2.5%

–56
706

2024

26,542

26,512
29

862

848
13
1

848

107

107
–*

–*
.........

–*

110
–2

.........

741
2.7%

–3
744

2025

27,438

27,408
30

897

906
–11
2

906

113

114
–*

–*
.........

–*

110
4

.........

793
2.8%

6
787

2026

164
SUMMARY TABLES

275
1,248
25
*
106
24
–47

199
1,144
11
*
106
24
–250
1,234

Total, financial assets net of liabilities �������������������������������

1,762

1,377
28
*
106
23
–47

275

14,763

5,386
14,763
76.5%

20,149

20,123
27

2017

1,869

1,486
27
*
106
22
–47

275

15,324

5,561
15,324
76.1%

20,884

20,858
26

2018

1,979

1,598
25
*
106
22
–47

275

15,982

5,713
15,982
76.1%

21,695

21,671
25

2019

2,078

1,701
21
*
106
21
–47

275

16,615

5,832
16,615
75.8%

22,447

22,423
24

2020

2,175

1,805
16
*
106
20
–47

275

17,264

5,935
17,264
75.5%

23,199

23,175
23

2021

Estimate

2,269

1,906
8
*
106
20
–47

275

18,016

5,983
18,016
75.5%

23,999

23,977
22

2022

2,369

2,011
5
*
106
19
–47

275

18,793

6,039
18,793
75.4%

24,832

24,811
21

2023

2,474

2,119
3
*
106
19
–47

275

19,548

6,123
19,548
75.2%

25,671

25,651
20

2024

2,581

2,229
*
*
106
18
–47

275

20,396

6,136
20,396
75.2%

26,531

26,512
19

2025

2,695

2,339
4
*
106
18
–47

275

21,302

6,124
21,302
75.3%

27,426

27,408
17

2026

Debt held by the public net of financial assets ���������������
11,882 12,498 13,001 13,454 14,003 14,537 15,089 15,748 16,424 17,074 17,814 18,607
As a percent of GDP �����������������������������������������������������
66.7% 67.7% 67.4% 66.8% 66.6%
66.3%
66.0%
66.0%
65.9%
65.7%
65.7%
65.7%
* $500 million or less.
1
A decrease in the Treasury operating cash balance (which is an asset) is a means of financing a deficit and therefore has a negative sign. An increase in checks outstanding
(which is a liability) is also a means of financing a deficit and therefore also has a negative sign.
2
Includes checks outstanding, accrued interest payable on Treasury debt, uninvested deposit fund balances, allocations of special drawing rights, and other liability accounts; and, as an offset, cash and monetary assets (other than the Treasury operating cash balance), other asset accounts, and profit on sale of gold.
3
Consists mainly of debt issued by the Federal Financing Bank (which is not subject to limit), Treasury securities held by the Federal Financing Bank, the unamortized discount (less premium) on public issues of Treasury notes and bonds (other than zero-coupon bonds), and the unrealized discount on Government account series securities.
4
Legislation enacted November 2, 2015 (P.L. 114–74), temporarily suspends the debt limit through March 15, 2017.
5
Treasury securities held by the public and zero-coupon bonds held by Government accounts are almost all measured at sales price plus amortized discount or less amortized premium. Agency debt securities are almost all measured at face value. Treasury securities in the Government account series are otherwise measured at face value
less unrealized discount (if any).
6
At the end of 2015, the Federal Reserve Banks held $2,461.9 billion of Federal securities and the rest of the public held $10,654.8 billion. Debt held by the Federal Reserve
Banks is not estimated for future years.

1,631

14,129

5,305
14,129
76.5%

5,003
13,117
73.7%

13,117

19,433

19,407
27

18,120

18,094
26

2016

Debt Held by the Public Net of Financial Assets:
Debt held by the public ����������������������������������������������������������������
Less financial assets net of liabilities:
Treasury operating cash balance ��������������������������������������������
Credit financing account balances:
Direct loan accounts �������������������������������������������������������������
Guaranteed loan accounts ���������������������������������������������������
TARP equity purchase accounts ������������������������������������������
Government-sponsored enterprise preferred stock ����������������
Non-Federal securities held by NRRIT �����������������������������������
Other assets net of liabilities ��������������������������������������������������

Total, gross Federal debt ������������������������������������������������������
Held by:
Debt held by Government accounts ����������������������������������������
Debt held by the public 6 ����������������������������������������������������������
As a percent of GDP �������������������������������������������������������������

Debt Outstanding, End of Year:
Gross Federal debt: 5
Debt issued by Treasury ����������������������������������������������������������
Debt issued by other agencies �������������������������������������������������

Actual
2015

(Dollar amounts in billions)

Table S–13.  Federal Government Financing and Debt—Continued

THE BUDGET FOR FISCAL YEAR 2017

165

OMB CONTRIBUTORS TO THE 2017 BUDGET
The following personnel contributed to the preparation of this publication. Hundreds, perhaps thousands, of others throughout the Government also deserve credit for their valuable contributions.

A
Andrew Abrams
Chandana L. Achanta
Brenda Aguilar
Shagufta Ahmed
Steven Aitken
David W. Alekson
Victoria L. Allred
Melanie R. Althaus
Lois E. Altoft
Jessica A. Andreasen
Benton T. Arnett
Aviva R. Aron-Dine
Anna R. Arroyo
Emily Schultz Askew
Lisa L. August
Karen Augustin
Renee Austin
Kristin B. Aveille
Sara Aviel
Anjam Aziz

B
Michelle B. Bacon
Jessie W. Bailey
Paul W. Baker
Carol A. Bales
Pratik S. Banjade
Avital Bar-Shalom
Amy C. Barker
Taylor J. BarnardHawkins
Bethanne Barnes
Jonathan Barnett
Patti A. Barnett
Jody M. Barringer
Mary Barth
Sarah O. Bashadi
Amy Batchelor
Jennifer Wagner Bell
Kheira Z. Benkreira
Joseph J. Berger
Benjamin Bergersen
Elizabeth A. Bernhard
Jamie Berryhill

Kyle Bibby
Emily R. Bilbao
Christopher Biolsi
Danielle Blanks
Mathew C. Blum
James Boden
Erin Boeke Burke
Cassie L. Boles
Melissa B. Bomberger
Cole A. Borders
Ariel V. Boyarsky
William J. Boyd
Mollie H. Bradlee
Joshua Brammer
Michael Branson
Alex M. Brant
Joseph F. Breighner
Eric J. Bremen
Andrea M. Brian
Erik G. Brine
Candice M. Bronack
Jonathan M. Brooks
Jayson Browder
Dustin S. Brown
Jamal T. Brown
Michael T. Brunetto
Robert W. Buccigrosso
Shannon Spillane
Buckingham
Kathryn Buckler
Pearl Buenvenida
Paul Bugg
Tom D. Bullers
Scott H. Burgess
Ben Burnett
Ryan M. Burnette
John D. Burnim
John C. Burton
Nicholas S. Burton
Mark Bussow
Dylan W. Byrd

C
Steven Cahill
Emily E. Cain
Gregory J. Callanan

Erin L. Campbell
Eric Cardoza
Matthew B. Carney
J. Kevin Carroll
William S. S. Carroll
Scott D. Carson
Sean C. Casey
Mary Cassell
Daniel E. Chandler
Maureen M. CharanDanzot
James Chase
Nida Chaudhary
Michael Chelen
Anita Chellaraj
Yungchih Chen
Gezime Christian
Deidre A. Ciliento
Michael Clark
Peter Clunie
Ilona Cohen
Angela Colamaria
William P. Cole
Victoria W. Collin
Debra M. Collins
Kelly T. Colyar
Karen M. Conaway
Jose A. Conde
Margot Conrad
Sarah Haile Coombs
Shavonnia CorbinJohnson
Justin P. Cormier
Jessie Crabb
Catherine E. Crato
Joseph Crilley
Rose Crow
Juliana Crump
Craig Crutchfield
David M. CruzGlaudemans
C. Tyler Curtis
William Curtis
Charles R. Cutshall

167

D
Nadir Dalal
D. Michael Daly
Rody Damis
Neil B. Danberg
Lisa E. Danzig
Alexander J. Daumit
Joanne Chow
Davenport
Kenneth L. Davis
Margaret B. DavisChristian
Chad J. Day
Carolyn M. Dee
Michael Deich
Tasha M. Demps
Paul J. Denaro
Chris J. DeRusha
John H. Dick
Darbi S. Dillon
Julie Allen Dingley
Derek M. Donahoo
Angela M. Donatelli
Paul S. Donohue
Shaun L. S. Donovan
Bridget C. Dooling
Vladik Dorjets
Lisa Cash Driskill
Laura G. Drummond
Laura E. Duke
Matthew S. Dunn

E
Matthew C. Eanes
Jacqueline A. Easley
Jeanette Edwards
Emily M. Eelman
Claire Ehmann
Anthony Eleftherion
Christopher J. Elliott
Tonya L. Ellison-Mays
Thomas H. Elwell
Adaeze B. Enekwechi
Noah Engelberg
Michelle A. Enger

168

LIST OF CONTRIBUTORS

Mark T. Erwin
Edward V. Etzkorn

F
Chris Fairhall
Robert Fairweather
Edna Falk Curtin
Michael C. Falkenheim
Hunter Fang
Shao W. Fang
Kara L. Farley-Cahill
Christine E.
Farquharson
Kira R. Fatherree
Andrew R. Feldman
Patricia A. Ferrell
Russell Ficken
Lesley A. Field
Mary Fischietto
E Holly Fitter
John J. Fitzpatrick
Josephine M. Fleet
Darlene B. Fleming
Tera L. Fong
Nicholas A. Fraser
Elizabeth A. Frederick
Farrah B. Freis
Nathan J. Frey
Tamara L. Fucile

G
Arianne J. Gallagher
Elizabeth Garlow
Andrew Garrett
Marc Garufi
Thomas O. Gates
Jeremy J. Gelb
Roy J. Gelfand
Emily R. Gentile
James Ghiloni
Tony Gilbert
Brian Gillis
Janelle R. Gingold
Joshua S. Glazer
Porter O. Glock
Andrea L. Goel
Ja’Cia D. Goins
Jeffrey D. Goldstein
Oscar Gonzalez
Charles H. Grant
Kathleen A. Gravelle
Richard E. Green

Aron Greenberg
Brandon H. Greene
Elyse Greenwald
Justin M. Grimes
Hester C. Grippando
Marc Groman
Stephanie Grosser
Andrea L. Grossman
Locher M. Grove

H
Michael B. Hagan
Tia Hall
Jaelith Hall-Rivera
William F. Hamele
John Theodore
Hammer
Jennifer L. Hanson
Linda W. Hardin
Derek M. Hardison
Dionne Hardy
Melanie Harris
Patsy W. Harris
Holly R. Harrison
Nicholas R. Hart
Paul Harvey
Ryan Bensussan
Harvey
Abdullah Hasan
Alyson M. Hatchett
Kyle W. Hathaway
Laurel S. Havas
Nora K. Hawkins
Mark Hazelgren
Jeffrey K. Hendrickson
John David Henson
Kevin W. Herms
Alexander G.
Hettinger
Peter N. Hewitt
Gretchen T. Hickey
Michael J. Hickey
Cortney J. Higgins
Mary Lou Hildreth
Amanda M. Hill
Andrew D. Hire
Thomas E. Hitter
Jennifer E. Hoef
Adam Hoffberg
Stuart Hoffman
James S. Holm
Michele Holt
Lynette Hornung-Kobes

Brian M. Hoxie
Grace Hu
Jamie W. Huang
Rhea A. Hubbard
Kathy M. Hudgins
Jeremy D. Hulick
Alexander T. Hunt
Lorraine D. Hunt
James C. Hurban
Jaki Mayer Hurwitz

I
Adrian B. Ilagan
Tae H. Im
Mason C. Ingram
Anthony C. Irish
Janet E. Irwin
Paul Iwugo

J
Antoine L. Jackson
Crystal E. Jackson
Keisha Jackson
Brian M. Jacob
Manish Jain
Varun M. Jain
Carol Jenkins
Nate Jenkins
Will Jenkins
Carol S. Johnson
Katherine B. Johnson
Kim I. Johnson
Michael D. Johnson
Bryant A. Jones
Danielle Y. Jones
Denise Bray Jones
Lisa M. Jones
Othni A. Jones
Shannon Maire Joyce
Hee Jun

K
Paul A. Kagan
Daniel S. Kaneshiro
Jacob H. Kaplan
Michele D. Kaplan
Jenifer Liechty
Karwoski
Regina L. Kearney
Douglas (Doug) E.
Keeler

Daniel J. Keenaghan
Matthew J. Keeneth
Ioanna Kefalas
Hunter S. Kellett
Cliff Kellogg
Timothy J. Kelly
Nancy B. Kenly
Amanda R. Kepko
Alper A. Kerman
Saha Khaterzai
Paul E. Kilbride
James H. Kim
Rachael Y. Kim
Barry King
Emily C. King
Kelly Kinneen
David E. Kirkpatrick
Benjamin W. Klay
Greg Knollman
Kevin E. Kobee
Elizabeth B.
Kolmstetter
Chloe Kontos
Andrea G. Korovesis
Lori A. Krauss
Joydip Kundu

L
Christopher D. LaBaw
Jonathan S. Lachman
Leonard L. Lainhart
James A. Laity
Chad A. Lallemand
Lawrence L. Lambert
Alexandra Langley
Daniel LaPlaca
Anthony Larkins
Derek B. Larson
Eric P. Lauer
Jessie L. LaVine
Suzette Lawson
Mary A. Lazzeri
Karen F. Lee
Sarah S. Lee
Susan E. Leetmaa
Annika N. Lescott
Stuart Levenbach
Malissa C. Levesque
Matthew I. Levine
John C. Levock
Sheila Lewis
Bryan León
Jeremy L. León

THE BUDGET FOR FISCAL YEAR 2017
Wendy L. Liberante
Richard Alan
Lichtenberger
Sara Rose Lichtenstein
Kristina E. Lilac
Erika Liliedahl
Jennifer M. Lipiew
Adam Lipton
Joseph M. Liss
Thomas Liu
Tsitsi Liywalii
Rayden Llano
Patrick Locke
Sara R. López
Alexander W. Louie
Adrienne Lucas
Gideon F. Lukens

M
Chi T. Mac
Deborah L. Macaulay
Ryan J. MacMaster
David A. Mader
Natalia Mahmud
Claire A. Mahoney
Chad Maisel
Dominic J. Mancini
Noah S. Mann
Robert Mann
Iulia Z. Manolache
Sharon Mar
Harrison D. Marks
Celinda A. Marsh
Daniel Marti
Brendan A. Martin
Rochelle W. Martinez
Nicole M. Martinez
Moore
Richard K. Mattick
Andrew Mayock
Shelly McAllister
George H. McArdle
Scott J. McCaughey
Alexander J.
McClelland
James McCoy
Connor G. McCrone
Timothy D. McCrosson
Anthony W. McDonald
Christine A. McDonald
Katrina A. McDonald
Renford A. McDonald
Kevin E. McGinnis

Luther McGinty
Tara McGuinness
Kevin J. McKernin
Christopher McLaren
Robin J. McLaughry
Megan B. McPhaden
William J. McQuaid
William J. Mea
Melissa R. Medeiros
Aalok S. Mehta
Inna L. Melamed
Patrick J. Mellon
Barbara A. Menard
Flavio Menasce
Jose A. Mendez
Jessica Nielsen Menter
Justin R. Meservie
P. Thaddeus
Messenger
Todd Messer
Jordan Metoyer
William L. Metzger
Daniel J. MichelsonHorowitz
Ashley E. Miller
Julie L. Miller
Kimberly Miller
Susan M. Minson
Asma Mirza
Mia Mitchell
Rehana I. Mohammed
Shara Mohtadi
Emily Mok
Stephanie Mok
Claire Monteiro
Joe Montoni
Cindy H. Moon
Johanna L. Mora
Zachary Morgan
Kelly Morrison
Joshua A. Moses
Kelsey MowattLarssen
James S. Mulligan
Taylor Mulligan
Niyat Mulugheta
Tecla A. Murphy
Christian G. Music
Hayley W. Myers
Kimberley L Myers

169

N
Jennifer M. Nading
Jeptha E. Nafziger
Larry J. Nagl
Anna M. Naimark
Barry Napear
Robert Nassif
Scott Nathan
Ashley M. Nathanson
Allie R. Neill
Kimberly P. Nelson
Melissa K. Neuman
Joanie F. Newhart
John D. Newman
Kimberly Armstrong
Newman
Teresa O. Nguyen
Brian A. Nichols
John T. Nichols
Tige Nishimoto
Douglas E. Nivens, II
Ross Nodurft
Tim H. Nusraty
Joseph B. Nye

O
Erin O’Brien
Devin L. O’Connor
Matthew J. O’Kane
Brendan J. O’Meara
Justin M. Oliveira
Paul D. Oliver
Brandon J. Ona
Farouk Ophaso
Allison B. Orris
Edgar Ortega
Jared Ostermiller
Tyler J. Overstreet
D. Brooke Owens
Adeniran Oyebade

P
Benjamin J. Page
Heather C. Pajak
Jake Paris
Jennifer E. Park
Sangkyun Park
Sharon Parrott
John C. Pasquantino
Angeli Patel
Arati N. Patel

Terri B. Payne
Christopher V. Pece
Falisa L. Peoples-Tittle
Michael A. Perz
Andrea M. Petro
Stephen P. Petzinger
Stacey Que-Chi Pham
Carolyn R. Phelps
Karen A. Pica
Brian K. Pipa
Joseph Pipan
Kimberly A. Pohland
Aaron W. Pollon
Mark J. Pomponio
Ruxandra Pond
Ally G. Pregulman
Celestine Michelle
Pressley
Larrimer S. Prestosa
Jamie M. Price
Daniel Proctor
Robert Purdy

R
Lucas R. Radzinschi
Latonda Glass Raft
John Rahaghi
Moshiur Rahman
Maria S. Raphael
Aaron D. Ray
Jeffrey Reczek
Meagan Reed
Mark A. Reger
Rudolph G. Regner
Paul B. Rehmus
Sean C. Reilly
Thomas M. Reilly
Richard J. Renomeron
Keri A. Rice
Shannon A. Richter
Kyle S. Riggs
Fermaint Rios, Jr.
Emma K. Roach
Beth Higa Roberts
Daniel C. Roberts
Donovan Robinson
Marshall J. Rodgers
Meredith B. Romley
Dan T. Rosenbaum
Eric Rosenfield
Jefferson Rosman
Caroline K. Ross
David J. Rowe

170

LIST OF CONTRIBUTORS

Mario Roy
Danielle R. Royal
Brian Rozental
Joshua Rubin
Jacqueline Rudas
Trevor H. Rudolph
Anne E. Rung
Erika H. Ryan

S
Fouad P. Saad
Preeya Saikia
John Asa Saldivar
Alvand A. Salehi
Mark S. Sandy
Subu Sangameswar
Katherin Monica
Santoro
Joel J. Savary
Philippa Scarlett
Lisa Schlosser
Tricia Schmitt
Kyle Benjamin
Schneps
Andrew M. Schoenbach
Daniel K. Schory
Jack L. Schreibman
Margo Schwab
Nancy E. Schwartz
Mariarosaria
Sciannameo
Tony Scott
Jasmeet K. Seehra
Robert B. Seidner
Max C. Sgro
Kala Shah
Shahid N. Shah
Shabnam
Sharbatoghlie
Tanzia Sharmin
Dianne Shaughnessy
Jessica Shaver-Lee
Paul Shawcross
Howard A. Shelanski
Melissa Shih
Gary F. Shortencarrier
Sara R. Sills
Samantha E.
Silverberg
Benjamin R. Simms
Brandon A. Simons
Whitney O. Singletary

Robert Sivinski
Benjamin J. Skidmore
Jack Smalligan
Craig M. Smith
Curtina O. Smith
Stannis M. Smith
Erica Socker
Silvana Solano
Roderic A. Solomon
Raquel Spencer
David A. Spett
John H. Spittell
Kathryn B. Stack
Travis C. Stalcup
Scott R. Stambaugh
Nora Stein
Lamar R. Stewart
Gary R. Stofko
Carla B. Stone
Terry W. Stratton
Joseph G. Stuntz
Frank Sturges
Thomas J. Suarez
Kevin J. Sullivan
Sarah Sullivan
Jessica L. Sun
Erin Sutton
Yasaman Sutton
Jennifer A. Swartz
Christine Sweeney
Ben Sweezy
Christina Swoope
Aaron L. Szabo

T
Jamie R. Taber
Robert D. Talcovitz
Teresa A. Tancre
Naomi S. Taransky
Stephanie Tatham
Benjamin K. Taylor
Myra L. Taylor
Ruben Tejeda
Randy Tharp
Amanda L. Thomas
Judith F. Thomas
Payton A. Thomas
Will Thomas
Courtney B.
Timberlake
Philip Tizzani
Thomas Tobasko

Rosanna Torres
Pizarro
Mariel E. Townsend
Gil M. Tran
Natalie Trochimiuk
S. Lorén Trull
Lily C. Tsao
Donald L. Tuck
Austin Turner
Melissa H. Turner
Benjamin J. Turpen

U
Nicolas Ufier
Carolyn T. Ugolino
Troy A. Uhlman
Shraddha Upadhyaya
Darrell J. Upshaw
JoEllen Urban
Taylor J. Urbanski

V
Matthew J. Vaeth
Ofelia M. Valeriano
Amanda L. Valerio
Cynthia Vallina
Haley Van Dyck
Sarita Vanka
David W. Varvel
Areletha L. Venson
Alexandra Ventura
Patricia A. Vinkenes
Dean R. Vonk
Ann M. Vrabel

W
James A. Wade
Rana Wahdan
Katherine K. Wallman
Heather V. Walsh
Kan Wang
Tim Wang
Sharon A. Warner
Michael Watts
Gary Waxman
Mark A. Weatherly
Bess Weaver
Jeffrey A. Weinberg
Sharon K. Weiner
David Weisshaar

Philip R. Wenger
Max W. West
Michael S. Wetklow
Steve Wetzel
Arnette C. White
Catherine E. White
Kamela White
Kim S. White
Sherron R. White
Chad S. Whiteman
Katie Whitman
Brian Widuch
Mary Ellen Wiggins
Shimika Wilder
Calvin L. Williams
Debra (Debbie) L.
Williams
Rebecca Williams
Jamie Wilson
Paul A. Winters
Julia B. Wise
Julie Wise
Elizabeth D. Wolkomir
Raymond J.M. Wong
Charles E.
Worthington
Lauren E. Wright
Sophia M. Wright
William Wu
Bert Wyman
Steven N. Wynands

X
Mohao Xi

Y
Abra S. Yeh
Melany N. Yeung
David Y. Yi
Elliot Y. Yoon
Carl H. Young, III

Z
Ali A. Zaidi
Thomas P. Ziehnert
Bill Zielinski
Gail S Zimmerman

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