Trump’s Budget Cuts ‘Low-Value’ Programs, Seeks Tech Results

Editor’s Note:

From cover to cover it’s only 62 pages long. But President Donald Trump’s 2018 Budget Blueprint, released Thursday, sets the stage for what potentially could be a radical shakeup of the Federal government and the way it manages technology and the technology workforce.

Trump’s massive $1.1 trillion vision tilts heavily toward defense spending ($639 billion), homeland security ($44 billion), and improving veterans’ health care ($79 billion). But just as important as what the Trump White House’s first budget would support, are the things that would be streamlined, cut, or outright eliminated.

The proposed budget cuts civilian agency spending by 5 percent and would lead to a drastic reduction in the size of the Federal workforce. But a more telling aspect of the budget blueprint is its focus on accountability and performance. Federal IT programs (and all other programs, for that matter) will need to demonstrate measurable return on their investments if they want the Trump administration to continue funding them.

“The Administration will take an evidence-based approach to improving programs and services—using  real, hard data to identify poorly performing organizations and programs,” the budget proposal states. “We will hold program managers accountable for improving performance and delivering high-quality and timely services to the American people and businesses. The Administration will roll back low-value activities and let managers manage, while holding them accountable for finding ways to reduce the cost of agency operations.”

On March 13, Trump issued an executive order calling for a plan to reorganize the executive branch. According to the proposed budget, the president and the director of the Office of Management and Budget will submit this reorganization plan to Congress “in roughly a year.”

Although the overall budget proposal would eliminate many programs and positions that the administration has said are either under-performing or duplicative, it does lay out a management agenda that focuses on removing “cumbersome” regulations that restrict the ability of Federal managers to make timely decisions, particularly on hiring new talent and acquiring new technologies.

“The Administration will use available data to develop targeted solutions to problems Federal managers face, and begin fixing them directly by sharing and adopting leading practices from the private and public sectors,” the budget proposal states. “Among the areas that will be addressed are how agencies buy goods and services, hire talent, use their real property, pay their bills, and utilize technology.”

Some industry groups, however, have come out against the budget proposal, arguing that cuts to grant programs (particularly those at the Small Business Administration, which we detail below) will hurt America’s growing innovation economy.

“If these cuts were to be enacted, they would signal the end of the American century as a global innovation leader,” wrote Joe Kennedy, a senior fellow at the Information Technology and Innovation Foundation (ITIF). “America’s lead in science and technology was built on the fact that in the 1960s the U.S. government alone invested more in R&D than the rest of the world combined, business and government. The Trump budget throws this great legacy away and puts the country on a path to being an economy that is a ‘hewer of wood and drawer of water.’ ”

Although Trump’s proposal would eliminate 19 agencies and dozens of grant programs managed by the Commerce and Education departments, such proposals rarely survive the entire budget process in Congress.

“This is the beginning of the budget process,” said House Speaker Paul Ryan, R-Wis.

Mike Hettinger, managing principal at Hettinger Strategy Group, said it will be interesting to see if the numbers between civilian agencies and defense spending shift during the appropriations process.

“Congress has to put its own stamp on it. It’s a blueprint,” Hettinger said. “We have a long way to go. How the blueprint translates into an appropriations bill has yet to be seen.”

— Dan Verton, Executive Editor

Trump’s Budget Blueprint Rundown

 

Commerce

$7.8 billion, 16 percent decrease

The 2018 budget requests $7.8 billion for the Department of Commerce, a $1.5 billion or 16 percent decrease from the 2017 annualized continuing resolution level. Although Commerce would receive less funding than last year under Trump’s plan, the Census Bureau would receive $1.5 billion, an increase of $100 million, to invest in “information technology and field infrastructure.”

The proposed budget zeroes out more than $250 million in grants for the National Oceanic and Atmospheric Administration. However, NOAA’s Geostationary Operational Environmental Satellite  programs will remain in place to provide weather data. The 2017 budget allotted increased funding to improve data flow between NOAA’s critical information technology systems and the office of the chief information officer.

Defense

$639 billion, 10 percent increase

Although the vast majority of the defense spending increase will go toward personnel and revitalizing aging big-iron systems, the budget proposal does focus heavily on the Defense Department’s growing role in cybersecurity and the urgent need to maintain the military’s technology edge.

The budget earmarks $2.1 billion for a wide range of technological activities, including unmanned aerial systems, missile defense, electronic warfare, and cyber operations technology.

The administration’s budget “lays the groundwork for a larger, more capable, and more lethal joint force, driven by a new National Defense Strategy that recognizes the need for American superiority not only on land, at sea, in the air, and in space, but also in cyberspace,” the budget document states. “As the world has become more dangerous—through the rise of advanced potential adversaries, the spread of destructive technology, and the expansion of terrorism—our military has gotten smaller and its technological edge has eroded.”

Energy

$28 billion, 5.6 percent decrease

The Department of Energy would receive $28 billion in the proposed budget, a $1.7 billion or 5.6 percent decrease from the 2017 budget. Technology programs are projected to suffer at DOE, according to the proposed budget. The blueprint eliminates the Advanced Research Projects Agency-Energy, the Innovative Technology Loan Guarantee Program, and the Advanced Technology Vehicle Manufacturing Program.

“The private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies,” the budget document states.

Hettinger is familiar with the Advanced Technology Vehicle Manufacturing Program. He said he interacted with this program frequently during a previous position at Grant Thornton.

Hettinger said it was interesting the budget highlights the private sector’s potential in doing research because the private sector already does a large amount of research, which DOE funds. He said DOE’s private sector funding for vehicle technology has been somewhat successful, as there has been “tremendous growth” in electric car use in the past decade.

“It’s not clear to me why that’s on the chopping block,” Hettinger said.

While Trump’s budget eliminates the Weatherization Assistance Program and the State Energy Program, the Office of Electricity Delivery and Energy Reliability would remain. This office received $262 million in last year’s budget that went toward grid modernization research.

The Office of Electricity Delivery and Energy Reliability will continue to “carry out cybersecurity and  grid resiliency activities that would help harden and evolve critical grid infrastructure,” the proposed budget states.

Homeland Security

$44.1 billion, 6.8 percent increase

Trump’s proposed budget outlines $44.1 billion for the Department of Homeland Security, a $2.8 billion or 6.8 percent increase for the agency. DHS is one of three agencies, along with Veterans Affairs and the Department of Defense, that receive increased funding in the proposed budget; $2.6 billion of the $44.1 billion will go toward border security technology, including the construction of a physical wall along the southern border.

“Border security tech is something we all expected to see,” Hettinger said. “It’s good to see tech is at least part of what they’re thinking about.”

The 2018 budget invests $15 million to start a mandatory nationwide E-Verify Program, an online system that would allow businesses to determine the eligibility of their new employees to work in the U.S. The budget document states that E-Verify would reduce the number of unauthorized workers.

Last year’s budget devoted $745.9 million for the Continuous Diagnostics and Mitigation program and National Cybersecurity Protection System, both of which DHS used to defend against cyberattacks. The 2018 budget sets aside $1.5 billion for cybersecurity measures, including a network for DHS to share cyber incident information with other Federal agencies and private companies.

Justice

$27.7 billion, 3.8 percent decrease

The proposed budget allots $27.7 billion for the Department of Justice, a $1.1 billion or 3.8 percent decrease from the previous budget. However, the Federal Bureau of Investigation would receive a $249 million increase. Sixty-one million dollars of this funding would go toward combating foreign cyber threats, $35 million would go toward sharing intelligence data with Federal partners, and $9 million would go toward improving the accuracy of violent crime data.

Small Business Administration

$827 million, 5 percent decrease

The administration plans to save $12 million “through identifying and eliminating those SBA grant programs where the private sector provides effective mechanisms to foster local business development and investment,” the budget proposal states. Eliminations include PRIME technical assistance grants, Regional Innovation Clusters, and Growth Accelerators.

These are primarily Obama-era programs designed to provide multiagency grants for coordinated economic development, small business, and workforce-training investments in 20 regions around the country. Many of these efforts focused on high-tech startups.

State

$25.6 billion, 28 percent decrease

The State Department would receive one of the widest cuts from Trump’s proposed budget.

“The FY 2018 budget advances the national security interests of the United States by focusing on diplomatic efforts and foreign assistance programs that advance the security and prosperity of the American people,” a spokesperson for the State Department said in a statement.

This cut could affect the agency initiative to teach overseas youth to use technology to counter extremism, the agency’s work on the international cybersecurity framework, and the agency’s IT strategic plan.

The State Department’s 5-year-old TechCamp initiative works to bring solutions to challenges using low-cost, easy-to-use technological tools to various countries. The State Department has run more than 40 TechCamps for students in more than 110 countries.

The agency has been trying to gain support from other countries for its cybersecurity framework that includes global affirmation of the applicability of international law on cyberspace, development of international consensus of norms of state behavior in cyberspace that apply during peacetime, and development of practical, confidence-building, and transparency measures that can aid states and prevent inadvertent misunderstanding and escalation.

The State Department’s chief information officer, Frontis Wiggins, released his strategic plan for IT for fiscal years 2017-2019 in December. Wiggins’ IT Strategic Plan focuses on innovative diplomacy, global IT infrastructure, and IT business management. The State Department requested $295 million in fiscal year 2017 for its IT fund.

“We must maintain optimal performance of IT systems while protecting our users, information, network, and global IT assets,” Wiggins said in a message attached to the plan.

Transportation

$16.2 billion, 13 percent decrease

Trump’s budget would initiate a multiyear shift of the air traffic control function of the Federal Aviation Administration to an independent, nongovernmental organization.

“This would benefit the flying public and taxpayers overall,” the budget proposal stated.

The budget proposal said that this transition would make the agency more efficient, while maintaining safety.

MeriTalk reported in January that Rep. Bill Shuster R-Pa., said he was optimistic about getting support from Trump on a plan to privatize the FAA. Shuster proposed last year that air traffic controllers and FAA modernization staff should become a Federally chartered nonprofit organization run by a board of directors. The plans would sever about 14,000 air traffic controllers and 16,000 other FAA workers from the payroll. Despite this, the FAA would keep its role as an oversight agency.

The plan was never voted on by the House of Representatives, but now has more of a chance of becoming a possibility.

A report from the inspector general of the Department of Transportation in January found that the FAA lacks the ability to respond to system failures because of lack of training for controllers, new technology that could enable improvement will not be available for years, contingency plans are incomplete, and the FAA doesn’t have effective plans to share information internally and externally. A Government Accountability Office report also found that the FAA’s NextGen program, which is tasked with modernizing flight systems, is moving too slowly.

Shuster said that the report lends support to his proposal to privatize the agency. Other members of Congress expressed concerns about putting the responsibility for 24,000 commercial flights a day in the hands of an “airline-dominated board.”

The FAA’s budget for fiscal year 2017 was $16 billion.

Treasury

$12.1 billion, 4.1 percent decrease

Trump’s proposed budget allocates money for the Treasury Department to invest in a departmentwide plan to strengthen cybersecurity systems and respond to cyberattacks.

Treasury spends a total of more than $109 million on its Cybersecurity Enhancement Account, which allocates funds to the Internal Revenue Service and to agencywide programs. The program is designed to handle cybersecurity threats within the agency and assist in mitigating threats throughout the nation’s financial infrastructure.

Trump’s budget only mentions internal agency cybersecurity networks and does not mention assisting private businesses. Trump’s budget also does not mention how much money the Treasury Department’s cybersecurity program will get out of the entire agency budget.

In fiscal year 2017, the Treasury Department spent $48 million on making improvements to the agency’s networks, and $62 million on cyber defense and authentication of the IRS’s networks.

The president’s budget for fiscal year 2017 gave the Treasury Department $13.3 billion.

Veterans Affairs

$78.9 billion, 5.9 percent increase

The administration’s budget proposal continues what it calls “critical investments aimed at optimizing productivity and transforming VA’s claims processes.” Efforts have been underway for years to reduce the backlog in veterans’ disability compensation claims and to leverage emerging technologies to reduce the time it takes to process those claims.

Trump’s budget “invests in information technology to improve the efficiency and efficacy of VA services. Provides sufficient funding for sustainment, development, and modernization initiatives that would improve the quality of services provided to veterans and avoid the costs of maintaining outdated, inefficient systems.”

In November, MeriTalk reported on the third update on the “MyVA” transformation initiative, an effort to make VA the No. 1 customer-service agency in the Federal government.

That report showed VA was making progress in transformation and in serving veterans. According to VA, the agency recorded the following improvements:

  • Veteran trust of VA is on the rise. In June 2016, nearly 60 percent (as compared to 47 percent in December 2015) of veterans said they trust VA to fulfill the country’s commitment to veterans.
  • VA is completing more appointments, faster. In FY 2016, VA completed nearly 58 million appointments–1.2 million more than in FY 2015 and 3.2 million more than FY 2014.
  • Processing of disability claims is faster and more accurate. The average wait time to complete a claim has dropped by 65 percent, to 123 days.
  • Urgent care is more available, and wait times are down. By September 2016, the average wait time for a completed appointment was down to less than five days for primary care, less than seven days for specialty care, and less than three days for mental health care.
  • Veteran homelessness has been cut in half. It’s down 47 percent since 2010 nationwide.
  • Quality is improving. Eighty-two percent of VA facilities improved quality overall since the fourth quarter of FY 2015.

 

Recent