The Non-Profit Sector and the Federal Budget: Analysis of President Bush's FY 2007 Budget

President George W. Bush's 2007 budget proposals submitted to Congress covering fiscal year (FY) 2007 and beyond, would put new demands on the nation's private, non-profit organizations at the same time they would reduce the federal support going to these organizations to provide services. Over five years, funding for the activities for all non-profit organizations could decline by a cumulative total of $23.8 billion in a worst case scenario analysis.

Federal support for non-health or social service related organizations outside of Medicare and Medicaid will cut by 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 non-profits, excluding support of non-profit 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.

Continued growth of the Medicaid program will buffer some non-profit organizations from immediate impact from the president's proposed spending plan. However, 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 from analysis (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.

President Bush submitted his FY 2007 budget proposal to Congress on February 6, 2006. This plan projects federal spending for FY 2007?2011. The federal fiscal year begins on October 1, 2006, and runs through through September 30, 2007. 

Excerpt