Friday, June 23, 2017

Trump Administration Releases 2018 Fiscal Year Budget Proposal

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PNN: Fiscal 2018 Budget

On May 23, the Trump administration released its proposed budget for fiscal year 2018 (October 1, 2017 – September 30, 2018). The budget proposal includes many items that would affect payroll operations.

Trump Administration Priorities
In his budget message to Congress, President Trump listed “eight pillars of reform”. Two would directly affect payroll processes.

• Health care reform
Trump reiterated his campaign promise to repeal the Affordable Care Act (ACA) and “its burdensome regulations and mandates, and replace it with a framework that restores choice and competition.” With the House of Representatives’ approval of the American Health Care Act, Congress has taken the first step in the process to repeal and replace the ACA. The Senate is reportedly working on its own health care legislation, which the Republican leadership has indicated it would like to try to pass before the July 4 recess.

The budget projects $250 billion in deficit savings associated with health care reform. It also would expand health savings accounts.

• Immigration reform
Although Trump did not specifically mention any program in his message, the budget requests necessary funding for the continued modernization of E-Verify as well as to begin the implementation of nationwide mandatory use of the E-Verify program.

Parental Leave Proposal
The budget also proposes a new parental leave program. The program would provide six weeks of paid family leave for new mothers and fathers, including adoptive parents. States would be required to establish these programs using the Unemployment Insurance (UI) system as a base. The funding for the program is described as “fully offset by a package of sensible reforms to the UI system,” including reforms to reduce improper payments, help unemployed workers find jobs more quickly, and encourage states to maintain reserves in their Unemployment Trust Fund accounts. The budget’s description of the program concludes that “the Administration looks forward to working with the Congress on legislation to make paid parental leave a reality for families across the Nation”.

Individual Agency Budgets
The budget proposal requests specific dollar amounts for various agencies, including:

• Department of Labor
The 2018 budget proposal is $9.7 billion (down from $12.1 billion), a 19.8% budget reduction. However, the Wage and Hour Division would see a slight increase from $230 million to $233 million.

• IRS
The 2018 budget provides $10.975 billion for the IRS to administer the tax code and implement key strategic priorities. This is a reduction from $11.2 billion for 2017. The budget proposal also renews two provisions related to payroll service provider (PSP) fraud. First, change-of-address confirmations relating to an employer making employment tax payments must be sent to both the old and new addresses. Second, the IRS must give special consideration to an offer-in-compromise from a victim of PSP fraud.

• Social Security Administration (SSA)
The SSA would see a 0.3% increase in its budget, from $9.0 billion to $9.1 billion.

Additional informational materials, such as fact sheets and historical tables, are also available on the Office of Management and Budget website. The Appendix page contains budget estimates for individual federal agencies. It is important to remember that the items listed above are merely proposals and have not yet been enacted into law.

Check back with Pay News Now as we continue to monitor the 2018 Fiscal Year Budget Proposal.