Thursday, February 17, 2011

FY 2012 Budget and Where the Budget Process Stands

The release of the President’s FY 2012 budget has been met with mixed reactions from advocates concerned about supporting families and individuals during times of highest need while also tackling the challenge of a rising deficit. The budget includes a five year freeze on non-security discretionary spending as well as significant cuts in discretionary spending. However, in key areas such as education and infrastructure, the President makes important investments that can help communities move towards the goal of creating opportunity-rich neighborhoods in which all families thrive and have equal access to the supports, services, and opportunities they need to ensure their children succeed.

These investments in infrastructure and education are critical levers for increasing the economic well-being of all individuals and families during this challenging economic environment. As the nation recovers from the recession, studies show that the U.S. will have one million fewer college graduates than will actually be needed to rebuild a strong economy for the future. In 2007, college degrees were awarded to 76 percent of students from high-income families but only 10 percent of students from low-income families. According to the Economic Policy Institute, one in three roads is in poor or mediocre condition, while one in four rural and one in three urban bridges is structurally deficient or functionally obsolete. Additionally, the lack of a modernized road, rail, and transit system leads Americans to spend more than 4 billion hours a year stuck in traffic, costing nearly $80 billion time and fuel costs. Weak transportation infrastructure has a significant economic impact on communities of color who rely more than others on public transportation to get to work and school. By investing in these areas, the president’s budget proposal helps to ensure that families have equal access to the supports and tools needed to both endure the current economic climate and prepare for the future.

Given CSSP’s focus on neighborhood strategies like workforce development, asset building, education success, building organizational capacity and creating strong community partnerships, some highlights of the FY 2012 funding that we will be following include:

• $ 150 million for the Promise Neighborhoods Initiative

• $ 250 million for Choice Neighborhoods

• $150 million for the Sustainable Communities Initiative

• An additional $2.1 billion to the investment made to community health centers through the Affordable Care Act

• $20 million for the Strengthening Communities Fund which was last funded through ARRA to build the capacity of nonprofit organizations to address local economic recovery needs

• $380 million for the Workforce Innovation Fund jointly administered and funded by the U.S. Department of Education (DOE) and the U.S. Department of Labor (DOL) for competitive grants to test and replicate research-based strategies that would improve the skills and employment outcomes for adults and youth.

• $40 million for Growth Zones, an interagency effort between the Department of Housing and Urban Development (HUD) and the Department of Commerce’s Economic Development Administration that would support job creation and economic development in distressed communities receiving federal investments through flexible grants for technical assistance, seed money and other planning costs.

• $30 million for the Byrne Criminal Justice Innovation Program which would support innovative evidence based approaches to fighting crimes and improving public safety through integrated public investments

In addition, the budget allocates, five million dollars each from HHS, DOE, and the Department of Justice (DOJ) through the Neighborhood Revitalization Initiative (NRI) that would be distributed in 4-7 competitive grants to local governments or local organizations partnering with local government to fill gaps that would otherwise hamper revitalization efforts and build organizational capacity for data utilization and evidence based planning.

Unfortunately, the FY 2012 proposal arrives during a time of great uncertainty regarding the federal budget. To date, Congress has yet to resolve the FY 2011 budget which ends September 30, 2011. The government is currently operating under a continuing resolution (CR) that has kept funding at FY 2010 levels. This CR is set to expire on March 4 unless further action is taken by Congress. On February 11, House Republicans crafted a CR containing spending reductions that would cover the rest of the fiscal year and amount to $100 billion below the President’s proposed FY 2011 budget.

As more information becomes available, we will continue to provide updates.

For more analysis of the federal budget process and the most recent budget proposal, please visit

Center for American Progress

Center on Budget and Policy Priorities



Economic Policy Institute


Voices for America’s Children

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