President Obama released the final budget of his presidency on February 9, laying out his blueprint for 2017 and the next decade. The total spending outlays for FY2017 would be $4.1 trillion,
As expected, the FY2017 budget includes public policy items of importance to the Zurich Advocacy team that we have been closely following.
Foreign Affiliated Reinsurance
For the seventh straight year, the budget included a proposal to disallow the deduction for foreign affiliated reinsurance transactions. This year’s ten year revenue estimate comes in at $7.8 billion in contrast to last year’s $7.3 billion. The general language remains identical to FY 2016 and, at present, it is unclear how Treasury arrived at this score.
The budget contains $18 billion in cuts over ten years to mandatory dollars in crop insurance. The proposed cuts are very similar to those proposed last year. The proposed savings is achieved through:
- A 10% reduction in all policies containing a “harvest price option.”
- Reforms to coverage for prevented planting.
The budget proposes numerous pilot projects and proposals to develop and strengthen resilience and mitigation programs across government agencies.
- The creation of a Costal Climate Resilience program for at risk coastal states to prepare and adapt to climate change ($2 billion).
- Multi-hazard Resilience projects through the Federal Emergency Management Agency’s (FEMA) to include mitigation planning, facilities hardening, and buyouts and elevation structures ($54 million).
- Department of Defense pilot project to develop a regional “whole government” and “whole community” approach to sea level rise preparedness and resilience planing as a template for other regions.
- Increase for National Flood Insurance Program Risk Mapping efforts to update the Nation’s flood maps to help communities and businesses understand the flood risks they face ($311 million).
The budget proposes $19 billion for cyber security across the federal government, with $3.1 billion specifically for technology modernization within various departments and agencies. It also cites the creation of a Cyber Security National Action Plan.