Trump Budget Brings Uncertainty to Agencies and Contractors Alike

President Trump released his proposal for the 2017-2018 federal government fiscal budget on March 16, with the intent to cut inefficiencies throughout the federal government. The highlight of the budget blueprint is the $54 billion increase in defense spending, which would offset the $54 billion decrease in non-defense discretionary spending; 19 agencies are set to have their funding completely eliminated in the proposal, with several others facing significant cuts to their budgets. Trump’s budget has been labeled as a “hard power” budget intentionally designed to send the message of what the new administration has prioritized on its agenda.

The partial budget aims to cut 1.2 percent of the discretionary budget overall, with no inclusion of tax proposals or other revenue generating ideas; discretionary spending constitutes approximately 25 percent of all annual federal expenditures.

“If he said it on the campaign, it’s in the budget,” said the president’s budget director, Mick Mulvaney. The agencies taking the largest cuts in funding are those specifically targeted throughout the campaign by Trump, specifically the Environmental Protection Agency (EPA), which would lose approximately 31% of its currently funding. The new budget would eliminate roughly 20 percent of all EPA staff department positions and discontinue funding for climate change research, including international multilateral programs. In light of the massive spending overhaul for the agency, there would be a slight increase in funding for drinking and wastewater infrastructure.

State and other development programs will also receive a substantial decrease in funding of approximately 29 percent in comparison to their current operating budget. This reflects the current administrations plans to detach itself further from the United Nations and the climate-change initiatives they are currently involved in.

Significant changes to the budget are expected when the times comes for it to actually be introduced into Congress, with many Democrats already voicing their outrage over the reduction to the EPA’s budget and many social development programs. Many military officials, including the defense secretary, have come out against the increase in defense spending while reducing funding allocation for foreign aid programs, citing the programs importance in global stability and conflict management.

Much of the increase in defense spending will be focused towards upgrading the IT systems of several programs, which will open up opportunities for contractors to begin directly selling their technological services to the government. An increased reliance on contracting is highly likely to occur due to the administrations prioritization of reducing the federal workforce while shifting to outsourcing for technological development as a natural progression for the transition. Some analysts believe that the new focus may be on the analytics-as-a-service model, to emphasize collecting information to use in organizing resources.

Elizabeth Hyman, executive vice president for public advocacy at CompTIA, has said that large budget cuts, “May make IT acquisition a challenge,” in a statement to Nextgov. She also called it a possible moment of opportunity for smart acquisitions to modernize IT systems.

The new budget leaves much uncertainty as to where exactly the increases in defense spending will go, with more clarification to come as the time to pass the annual budget comes closer.

This article was written by Joseph Castelli, an intern with Mid-Tier Advocacy, Inc. (MTA). MTA is a 501(c)3 non-profit which represents Mid-Sized and Advanced Small Federal Government Contractors. For more information and membership please visit www.midtier.org.

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Mid-Tier Advocacy Intern
Intern
Mid-Tier Advocacy
Washington DC
(202) 670-2298
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