The budget proposals that President Bush recently submitted to Congress, covering fiscal year 2007 and beyond, would put new demands on the nation’s private, nonprofit organizations at the same time they would reduce the federal support going to these organizations to provide services. In particular, our analysis of the president’s FY 2007 budget indicates that:
* Over the five years, FY 2007-2011, the Bush Administration’s latest budget proposals would reduce federal spending on programs of interest to nonprofits, outside of Medicare and Medicaid, by a cumulative total of $78.6 billion below current FY 2006 levels, after adjusting for inflation.
* If the president’s proposals were enacted, federal funding of nonprofits, excluding support of nonprofit health organizations through the Medicare and Medicaid programs, would decline during the five years, FY 2007-2011, by a cumulative total of $14.3 billion below FY 2006 levels after adjusting for inflation.
* The impact of the president’s proposed spending plan on the nation’s nonprofit organizations would be even more severe were it not for the projected continued growth of the Medicaid program, which now delivers important assistance to nonprofit organizations outside of the health field. But significant pressures exist at the state level to reduce Medicaid spending. If Medicaid support of non-health organizations (e.g. social service organizations) is also excluded (along with Medicare and Medicaid support of health organizations), then during FY 2007-2011 federal support of non-health nonprofits would decline by a cumulative total of $23.8 billion below FY 2006 levels under the president’s budget.
The balance of this report examines these findings in greater detail and puts them into context in terms of the recent history of federal spending changes and their impact on the country’s nonprofit organizations.
