President Obama Unveils $3.8 Trillion Budget Proposal

The Obama Administration released a $3.8 trillion Fiscal Year (FY) 2011 budget proposal to Congress February 1. The plan includes $1.415 trillion in discretionary spending and projects an FY10 deficit of 1.56 trillion. It also includes policies to achieve $1.2 trillion deficit reduction over 10 years (excluding war savings), more than $300 billion in tax cuts over 10 years and $100 billion for immediate job-creating investments in infrastructure, clean energy and small business tax cuts.

Discretionary spending is broken into two categories: security and non-security spending. Security spending would increase by 5.2 percent to $719.2 billion, while non-security spending would drop by $5 billion, or 1.1 percent to $441.3 billion.

Congress has begun hearings on the proposed budget. Following is an overview of the budget’s proposals for various public works and infrastructure programs.

Transportation

The proposed budget includes $79 billion for the US Department of Transportation (DOT) and its programs, about a $2 billion increase over the current year.

· Recommends extending the current SAFETEA-LU authorization through March 2011. SAFETEA-LU, the federal surface transportation law, expired September 30, 2009. The budget states that during this extension period the Administration will work with Congress to reform surface transportation programs and put the system on a viable financing path. A temporary extension expires February 28.

· Proposes $4 billion to create an infrastructure bank. The National Infrastructure Innovation and Finance Fund would invest in projects of regional or national significance. Established as a new operational unit within DOT, the fund would provide resources for projects through, grants, loans or a blend of both and will leverage non-federal resources, including private capital.

· Proposes establishing a new $30 million Transit Safety Program. The Administration late last year proposed legislation to establish nationwide safety standards and for federal enforcement of those standards.

· Proposes $527 million for livable communities. As part of the Partnership for Sustainable Communities’ multi-agency initiative with the Environmental Protection Agency (EPA) and the Department of Housing and Urban Development (HUD), the funding will assist state and local governments to invest in transportation that helps advance sustainable development.

· Proposes $1 billion to sustain large-scale multi-year support for high-speed rail. The economic recovery act provided $8 billion for high speed rail.

· Proposes small increases for highway and transit funding. Highway funding would increase by about $200 million from $41.1 billion in FY10 to $41.3 billion in FY11. The funding includes $200 million for a competitive Livable Communities grant program. Transit funding would increase by about $70 million, from $10.73 billion in FY10 to $10.8 billion in FY11.

· Proposes $20 million to establish an Office of Livable Communities in the Office of the Secretary. The office would coordinate multimodal and interagency (HUD and EPA) livability efforts and lead DOT’s investment decisions that focus on livable communities.

· Proposes $1.14 billion, more than a 30 percent increase from 2010, for the Next Generation Air Transportation System, the Federal Aviation Administration’s long-term effort to improve safety, efficiency and capacity of the aviation system.

Environment

Environmental Protection Agency
The President proposed a budget of $10 billion for the Environmental Protection Agency, a three percent cut from FY 2010 enacted levels. The proposal trims the agency’s operating budget, water infrastructure loan programs and Superfund programs.

· Proposes $1.3 billion for the Superfund program to clean up contaminated sites.

· Proposes $215 million for the Brownfields program to clean up abandoned commercial and industrial sites.

· Proposes $27 million for the Healthy Communities initiative to address community water priorities, promote clean, green and healthy schools; improve air toxics monitoring in at risk communities and encourage sustainability by helping to ensure that policies and spending at the national level do not adversely affect the environment and public health or disproportionally harm disadvantaged communities.

· Proposes $43 million for efforts to address climate change and work toward a clean energy future, including implementing the greenhouse gas reporting rule; provide technical assistance to ensure that any permitting under the Clean Air Act will be manageable; perform regulatory work for the largest stationary sources of Greenhouse Gas (GHG) emissions; develop standards for mobile sources such as cars and trucks and continue research of carbon capture and sequestration technologies.

· Proposes $3.3 billion for water and wastewater infrastructure programs, down from $3.5 billion in FY 2010.

· Proposes $1.3 billion or a 14 percent increase in State Tribal Assistance Grants for clean air and water grants to states and tribes.

U.S. Army Corps of Engineers
The President’s budget proposal recommends a 10 percent cut to the Army Corps of Engineers’ budget for FY 2011. The Army Corps would receive $4.9 billion, down $5.4 billion from FY 2010.

· Proposes $2.4 billion for operating and maintaining existing projects.

· Proposes $15 million to expand a national database of federal levees.

· Proposes $10 million for a program to assess the effects of climate change on civil works projects.

· Proposes $1.7 billion for the construction budget.

· Proposes $30 million in funding for flood control and coastal emergencies.

· Proposes $193 million for agency regulatory program.

Homeland Security

The proposed budget includes $56.34 billion for the US Department of Homeland Security and its programs, which is a $1.13 billion or 2.68 percent increase.

· Proposes $2.36 billion for the National Protection and Programs Directorate, an increase of $402.7 million. The National Protection and Programs Directorate leads the protection and risk reduction for the Nation’s physical and virtual critical infrastructure and key resources from man-caused disasters, natural disasters and other catastrophic incidents.

· Proposes $10.5 billion, an increase of $48.7 million, for the Federal Emergency Management Agency.

· Proposes $1.95 billion for the Disaster Relief Fund, an increase of $0.35 billion. The Disaster Relief Fund provides a portion of the total federal response to victims in declared major disasters and emergencies.

· Proposes $4 billion for State and Local Programs, an increase of $985.3 million compared to FY 2010. These grants provide training, exercises and technical assistance to improve emergency planning, response and recovery efforts. Specific state and local grant programs received the following allocations:

o State Homeland Security Grants – $1.05 billion, an increase of $100 million.
o Regional Catastrophic Planning Grants – $35 million, an increase of $1 million.
o Emergency Management Performance Grants - $345 million, an increase of $5 million.
o Urban Area Security Initiative – $1.1 billion, an increase of $248 million.
o Transportation and Infrastructure Protection Grants – $600 million, an increase of $12 million.
o Citizen Corps, Interoperable Emergency Communications and Emergency Operations Centers did not receive and funding for FY 2011.

· Proposes $100 million for Pre-Disaster Mitigation Grants, a decrease of $135 million. Pre-Disaster Mitigation Grants provide program support and technical assistance to state, local and tribal governments to reduce the risks associated with disasters, support the national grant competition, and provide the required $500,000 per state allocation. Funds will support the development and enhancement of hazard mitigation plans and the implementation of pre-disaster mitigation projects.

· Proposes $169 million for the National Flood Insurance Fund, an increase of $23 million. The National Flood Insurance Fund provides necessary resources to operate the National Flood Insurance Program.

· Proposes $194 million for Flood Map Modernization, a decrease of $26 million. Flood Map Modernization funding will support the review and update of flood hazard data and maps to accurately reflect flood hazards and monitor the validity of published flood hazard information. This funding will support the review and update of flood hazard data and maps.