National Policy Matters: President Obama's FY 2011 Budget Request

The following is Issue #7 of National Policy Matters, a publication of the Disability Policy Collaboration (DPC), a partnership of United Cerebral Palsy (UCP) and The Arc of the United States (The Arc).

President Obama's FY 2011 Budget Request:   Level Funding and a Few Increases for Disability Programs

President Obama released the details of his Administration’s Fiscal Year 2011 budget proposal on February 1. The $3.8 trillion budget would add $1.6 trillion to the federal debt as the Administration seeks to spur economic growth, create new jobs while holding down spending for many programs.

The budget proposes a three year freeze on discretionary spending except those programs related to defense and security. Under the discretionary program freeze, some programs would grow, many would be frozen at current levels, and a significant number would be consolidated or eliminated.
 
Many of the disability and health programs received level funding or very slight increases. This generally means that there is little new money to fund more services and supports or to expand many of these critical programs. However, a few programs received significant increases in funding or reductions and they are described below. 

Department of Health and  Human Services (HHS)

Medicaid.  The President’s budget includes $25.5 billion to extend the American Recovery and Reinvestment Act’s (ARRA) temporary increase to the federal share of Medicaid spending (known as the federal medical assistance percentage or FMAP) for six months (Jan 1, 2010 - June 30, 2011). The ARRA increase will expire on December 31, 2010. An extension is needed because states are continuing to experience significant deficits due to the economic recession. Congress must pass legislation that includes this increase. The House of Representatives included this increase in its jobs bill which passed in December. The DPC is working with other Medicaid stakeholders to secure swift passage of this extension.

Demonstration Projects. The budget proposal also includes new Medicaid and Medicare demonstration projects aimed at evaluating reforms to provide higher quality care at lower costs. Another proposal would fund the Year of Community Living Initiative to promote collaboration between the Departments of Health and Human Services and Housing and Urban Development to expand access to housing and community supports to enable people with disabilities to live in the community as opposed to in institutional settings.

Autism and Other Developmental Disabilities.  The Autism and Other Developmental Disability program at the Health Resources and Services Administration supports early detection and intervention, training and research programs. It received a $7 million increase over FY 2010 funding.

Department of Education

IDEA.  The IDEA State Grant would receive a $250 million increase over the previous fiscal year, after disregarding the additional funding made available under the American Recovery and Reinvestment Act stimulus funding for IDEA.  Ten percent ($25 million) of the increase would be reserved for the states to meet IDEA’s data collection requirements.Both the IDEA Preschool and Part C Early Intervention programs would be frozen.  The expiration of the stimulus funding for the Early Intervention program, coupled with frozen FY 2011 funds, would put several states at risk of eliminating this critical program.

All but one of the IDEA National Activities programs (State Personnel Development, Technical Assistance and Dissemination, Personnel Preparation and Parent Information Centers) would be frozen.  The other program, Technology and Media Services, would actually be reduced by almost $3 million.

Vocational Rehabilitation (VR) State Grant Program. This program provides funding to state vocational rehabilitation agencies to support rehabilitation and employment efforts including providing assessments, pre-vocational training, assistive technology, job placement and follow-along services to assist in job retention. Similar to the unsuccessful Bush Administration proposals, the Obama Administration is proposing to consolidate into Title 1 the following programs: Supported Employment State Grant, the Projects with Industry, the Migrant and Seasonal Farm Workers and the funds currently provided to State VR agencies to support in-service training for agency personnel under the training program. Of the $57 million dollar proposed Title 1 increase, $55 million is the combined funding for the consolidated programs.

New VR and Related Programs. The Obama Administration did propose new programs including almost $7million for technical assistance and projects designed to improve VR program performance. A new Supported Employment Extended Services for Youth with Significant Disabilities program which would provide $25 million for competitive grants to help states expand supported employment for youth. Funds would be used to maintain individuals in supported employment after receiving services provided by the VR State Grants Program. The Administration is also seeking $30 million to support a partnership with the Department of Labor to encourage innovation and support projects to improve services and employment outcomes for individuals with disabilities.

Though few details on the new programs have been released to date it is clear that the supported employment consolidation and the new youth program signal a significant shift in policy. Recommending that Congress consolidate the Supported Employment State Grant program with the Title I state grant means that the dedicated funding for each state for supported employment is lost. The states would have the option to continue to fund supported employment and could chose to apply for the competitive grants for the youth. The second shift in policy is providing funding for extended supports beyond 18 months for youth. Currently VR funding for supported employment is time limited to 18 months. In addition the new program’s focus on youth signals less focus on adults who need supported employment services. 

Department of Labor (DOL)

Workforce Investment Act (WIA) Innovation Funds.  Five percent of the increase in the Adult Employment line item is to fund the Workforce Innovation Fund which would provide competitive grants to test and replicate strategies that improve employment outcomes. Fifteen percent of the increase in the Youth program will fund the Youth Innovation Fund to pilot innovative models for delivering summer and year-round work experiences.  

Social Security Administration (SSA)

Administration of SSA.  Each year Congress provides money to the Social Security Administration to pay for the staff and other costs involved in administering the Social Security retirement, survivor, and disability programs and the Supplemental Security Income (SSI) program. In the budget this is called the “Limitation on Administration Expenses” (LAE) and advocates have been trying to significantly increase this account so that SSA can improve services and eliminate the huge backlogs in decisions on disability claims. The President has proposed an increase of $930 million, or 8 percent, above the FY 2010 enacted level.  This amount will need to continue to grow in order to cover the on-going costs of administering the programs and efforts to reduce the backlogs in decisions on disability claims.

Economic Stimulus Payment. The Obama Administration has also proposed a second one-time economic recovery payment of $250 for eligible Social Security, Supplemental Security Income, Veteran’s Affairs, Railroad Retirement Board and government pension beneficiaries.

Department of Housing and Urban Development (HUD)

Section 811.  In a significant disappointment, the President’s budget seeks a deep reduction for the HUD Section 811 Supportive Housing for Persons with Disabilities Program. Section 811 provides competitive grants to non-profits to build or rehabilitate affordable and accessible units for non-elderly low-income persons with significant disabilities. Specifically, the budget proposes only $90 million for the program, compared to the current FY 2010 appropriation of $300 million. This includes the transfer of $113 million out of Section 811 to Section 8 for the cost of renewing roughly 14,000 Section 811 tenant-based rental vouchers (known as “Mainstream Vouchers”). In addition, most of the $90 million requested by the Obama Administration for FY 2011 would be directed to renewing project-based rent subsidies for existing 811 developments, leaving only a small amount for development of new supportive housing units. Project-based rent subsidies pay for operating costs such as insurance, maintenance, and utilities.
 
HUD’s justification for this cut stated that the program must be reformed to work more efficiently and leverage other sources of funding for construction (such as the Low Income Housing Tax Credit). The Frank Melville Supportive Housing Investment Act of 2009 (H.R. 1675/S.1481), which overwhelmingly passed the House and is pending in the Senate, includes many of these reforms. The Obama Administration has not yet submitted its views on this legislation to Congress. The DPC will work with other disability groups to secure restoration of the cut and passage of the Melville bill in the Senate. 

Key Disability Programs

This table compares the FY 2010 funding and the President's FY 2011 Budget Request for key disability programs.

Next Steps

Cabinet Secretaries will be making the rounds of House and Senate hearings on the budget for the next few weeks. At some point, likely in late February or early March, the House and Senate Budget Committees will begin crafting the Fiscal Year 2011 Budget Resolution (BR). The BR, once adopted by the Congress, will serve as the blueprint which the Appropriations Committees will use to make program by program spending decisions.