The Deficit and Grants - A Roadmap
About six months ago, before the words debt ceiling came into vogue, a friend of mine sent me a link to a New York Times interactive article.
The website asked the user to select from a variety of options to cut the federal deficit.
For a policy nerd like me, it was an interesting exercise.
I refer back to this time now as I watch the intense speculation about the pending budget cuts as it pertains to federal discretionary grants.
As with most federal budget numbers, there are many ways to calculate the cost of these programs.
However, it is safe to assume that these totals are well under 1% of the federal budget.
Due to the fund's discretionary nature, many people believe that this is one area that could see catastrophic cuts when in fact however, this is often not true.
One could argue that a blueprint already exists on how to deal with discretionary spending.
In President Obama's proposed 2012 budget,he eliminated over $3 billion in discretionary grant funding.
Programs that were slated to go include the Adolescent Family Life Demonstration Program ($17 million) the Brownfields Economic Development Initiative (BEDI) ($18 million), Health Care Facilities and Construction ($337 million), Diesel Emissions Grants ($60 million), Public Telecommunications Facilities ($20 million), Rural Housing Service Grants and Loans ($61 million) and the Save American Treasures historical preservation grants ($30 million).
Grant programs that were reduced include the National Endowments for the Arts and Humanities, the Clean Water Revolving Funds to States ($947 million) as well as housing grants programs for the elderly ($68 million) and those with disabilities ($104 million).
While the pain of such cuts is clear, the proposed approach does offers a blueprint.
The proposal cuts across a variety of programs, federal agencies and political ideologies affecting both rural and urban areas.
Second, broad new spending initiatives are unlikely to replace these cuts as the President has asked federal agencies to cut spending by 10% for fiscal year 2013.
Finally, as a known commodity, these cuts are already "priced in" to the collective thinking in this area and so will come as less of a shock.
Therefore, this proposed plan offers a reasonable blueprint for discussion at least in this area.
The point is not to offer yet another article to suggest the sky is falling but also to offer some reason for cautious optimism.
Like most federal programs, competitive grant funding will take a hit in the coming fiscal years.
However, it is by no means the end of federal competitive grant programs.
These programs offer a socio-economic lifeline to communities and businesses across the country at minimal cost.
The political costs of draconian cuts may prove too high in an election year (even some members of the Tea Party are starting to get some negative feedback on this issue as the cuts start to hit home), and in the current economy, these funds continue to take on greater importance.
Further, the proposed offers other common-sense measures that will help mitigate these cuts.
For example, the administration is asking federal agencies to the promote the use of technology such of video conferencing to cut grant related travel pertaining to conferences, grant application reviews etc.
This change is estimated to save the Health and Human Services Division almost $12 billion in FY 2012 alone.
The greater use of technology offers the chance for everyone to save money, especially when spread across federal agencies.
In my own business, the use of grants.
gov to submit grants has saved thousands of dollars a year in mailing costs alone.
Finally, history will serve as some guide.
The last time competitive grants received such scrutiny was during the Reagan Administration.
At that time the federal cut to grant programs totaled about 1% a very minor amount.
In conclusion, while federal competitive grant funding faces some challenges in the coming years, it will likely not be the "mother of all cuts" currently under discussion.
While our leaders must decide if they will rise to the occasion or merely fight to steer a ship that is taking on water; it is important to realize that this crisis will pass and the lessons learned will make us a stronger, more resourceful nation.
The website asked the user to select from a variety of options to cut the federal deficit.
For a policy nerd like me, it was an interesting exercise.
I refer back to this time now as I watch the intense speculation about the pending budget cuts as it pertains to federal discretionary grants.
As with most federal budget numbers, there are many ways to calculate the cost of these programs.
However, it is safe to assume that these totals are well under 1% of the federal budget.
Due to the fund's discretionary nature, many people believe that this is one area that could see catastrophic cuts when in fact however, this is often not true.
One could argue that a blueprint already exists on how to deal with discretionary spending.
In President Obama's proposed 2012 budget,he eliminated over $3 billion in discretionary grant funding.
Programs that were slated to go include the Adolescent Family Life Demonstration Program ($17 million) the Brownfields Economic Development Initiative (BEDI) ($18 million), Health Care Facilities and Construction ($337 million), Diesel Emissions Grants ($60 million), Public Telecommunications Facilities ($20 million), Rural Housing Service Grants and Loans ($61 million) and the Save American Treasures historical preservation grants ($30 million).
Grant programs that were reduced include the National Endowments for the Arts and Humanities, the Clean Water Revolving Funds to States ($947 million) as well as housing grants programs for the elderly ($68 million) and those with disabilities ($104 million).
While the pain of such cuts is clear, the proposed approach does offers a blueprint.
The proposal cuts across a variety of programs, federal agencies and political ideologies affecting both rural and urban areas.
Second, broad new spending initiatives are unlikely to replace these cuts as the President has asked federal agencies to cut spending by 10% for fiscal year 2013.
Finally, as a known commodity, these cuts are already "priced in" to the collective thinking in this area and so will come as less of a shock.
Therefore, this proposed plan offers a reasonable blueprint for discussion at least in this area.
The point is not to offer yet another article to suggest the sky is falling but also to offer some reason for cautious optimism.
Like most federal programs, competitive grant funding will take a hit in the coming fiscal years.
However, it is by no means the end of federal competitive grant programs.
These programs offer a socio-economic lifeline to communities and businesses across the country at minimal cost.
The political costs of draconian cuts may prove too high in an election year (even some members of the Tea Party are starting to get some negative feedback on this issue as the cuts start to hit home), and in the current economy, these funds continue to take on greater importance.
Further, the proposed offers other common-sense measures that will help mitigate these cuts.
For example, the administration is asking federal agencies to the promote the use of technology such of video conferencing to cut grant related travel pertaining to conferences, grant application reviews etc.
This change is estimated to save the Health and Human Services Division almost $12 billion in FY 2012 alone.
The greater use of technology offers the chance for everyone to save money, especially when spread across federal agencies.
In my own business, the use of grants.
gov to submit grants has saved thousands of dollars a year in mailing costs alone.
Finally, history will serve as some guide.
The last time competitive grants received such scrutiny was during the Reagan Administration.
At that time the federal cut to grant programs totaled about 1% a very minor amount.
In conclusion, while federal competitive grant funding faces some challenges in the coming years, it will likely not be the "mother of all cuts" currently under discussion.
While our leaders must decide if they will rise to the occasion or merely fight to steer a ship that is taking on water; it is important to realize that this crisis will pass and the lessons learned will make us a stronger, more resourceful nation.
