Biden's budget outline calls for new health agency and 16% rise in non-defense, discretionary spending

MW Biden's budget outline calls for new health agency and 16% rise in non-defense, discretionary spending

By Victor Reklaitis

The Biden White House on Friday took the wraps off its fiscal 2022 discretionary spending proposal, with the budget outline calling for a new health agency as well as a 16% increase in non-defense outlays.

The outline, often called a "skinny budget," requests $6.5 billion to launch the "Advanced Research Projects Agency for Health," or ARPA-H. The new outfit would have an initial focus on cancer and diseases like diabetes and Alzheimer's, and ultimately would aim to help drive transformational innovations in health research, Biden administration officials told reporters.

Administration officials said the U.S. has been under-investing in core public services, benefits and protections over the last 10 years, and their request for $769 billion for non-defense discretionary spending -- a 16% rise over fiscal 2021's enacted level -- would return this category of spending to 3.3% of GDP, roughly the historical average over the last 30 years.

The budget outline calls for $715 billion for the Defense Department, representing a 1.6% rise from the current level and making up the bulk of the $753 billion requested for national defense programs. While progressive groups are criticizing the stepped-up money for the Pentagon, administration officials said a large chunk of that increase is to pay for the pay raise for men and women in uniform and the civilians that support them.

Other highlights include $36.5 billion in Title I grants to provide funding for high-poverty schools, $10.7 billion for fighting the opioid epidemic, $8.7 billion for the Centers for Disease Control and Prevention and $2.1 billion to address gun violence.

The discretionary spending request is "a package of proposals to help build on efforts to combat the COVID-19 pandemic and improve the public health infrastructure; create an economy that works for everyone; mount a historic, whole-of-Government approach to combating climate change, advance equity across the Nation and economy; and restore America's standing around the world," said Shalanda Young, acting director of the Office of Management and Budget, in a letter to lawmakers.

Ahead of the budget outline's rollout, critics suggested it could raise more questions than it answered in the wake of a $1.9 trillion stimulus package and Biden's $2.3 trillion infrastructure proposal.

"The central issue is what are they going to assert they get in the way of economic growth out of their combination of the American Rescue Plan, the American Jobs Plan and whatever sequel it might have and how does that fit into some sort of budgetary strategy regarding the structural deficit that we have? And one year of discretionary numbers doesn't shed light on either of those things," Douglas Holtz-Eakin, president of the conservative American Action Forum think tank and a former head of the Congressional Budget Office, told MarketWatch.

See:Cascade of red ink poses risks for Biden's budget rollout

Discretionary funding makes up only about a third of annual spending by the government, as Medicare, Social Security and other entitlement programs take up more and more resources. It has become customary for new administrations to release their proposed discretionary spending for the next budget year around this time, and their outlines then can be used by lawmakers on Capitol Hill to begin writing the annual appropriations bills.