USDA, EPA budgets face among largest federal cuts

By J.R. Pegg

WASHINGTON, DC, February 8, 2005 (ENS): The federal budget plan proposed Monday by President George W. Bush calls for reduced spending on the environment, agriculture, education, low-income housing aid, and health care.

The $2.58 trillion spending plan cuts funding for 12 of 23 government agencies, with the Environmental Protection Agency (EPA) and the U.S. Department of Agriculture (USDA) facing some of the larger cuts.

Bush told reporters Monday the budget is "lean" and follows the priorities of "winning the war on terror, protecting our homeland, growing our economy."

The plan contains a 4.8 percent increase in defense spending and a 1.2 percent increase in spending for homeland security.

The proposed funding for the Department of Defense and the Department of Homeland Security totals some $449 billion.

Bush said the proposal would trim the current budget deficit of $497 billion to $390 billion – some 3.5 percent of gross domestic product – and would scale back or eliminate 150 federal programs.

"It is a budget that focuses on results," Bush said. "Taxpayers in America don't want us spending their money on something that's not achieving results."

A slew of the proposed reductions were offered by the administration – and rejected by Congress – last year.

The overall budget request increases discretionary federal spending by some 2.1 percent over 2005 appropriations.

White House Office of Management and Budget Director Josh Bolton said that bar defense, homeland security, and entitlement programs, the $2.58 trillion spending plan trims discretionary federal spending by 0.5 percent.

Bolton said the budget proposal represents the first proposed reduction in spending since the Reagan administration and puts the nation on track to meet Bush’s promise to halve the federal deficit by 2009.

Speaker of the House Dennis Hastert, an Illinois Republican, said the proposal "reflects there are tough fiscal challenges ahead, but challenges that can be overcome through strong economic policies and spending restraint."

House Democratic Leader Nancy Pelosi said the budget proposal is "fiscally irresponsible, morally irresponsible, and a failure of leadership."

The California Democrat called the plan a "hoax" because it does not include funds for the war in Iraq or for the administration’s proposed reform of Social Security, which could cost billions of dollars.

Administration officials said they would soon submit a supplemental request for some $81 billion to fund the U.S. war effort in Iraq.

The plan slashes the budget of the Department of Housing and Urban Development (HUD) by 11.5 percent, the Transportation Department by 6.6 percent, the USDA by 9.6 percent and the EPA by 5.6 percent.

The cuts at HUD center on housing aid to the poor and the much of the decrease at the Transportation Departments comes from a major reduction in subsidies for the Amtrak rail system.

The budget decrease in the USDA budget includes cuts to food stamp payments and farm subsidy payments. Still, Agriculture Secretary Mike Johanns said Monday that while Food Stamp participation increases by 10 percent each year, the budget "includes resources to fully fund estimated Food Stamp participation and also provides a $3 billion contingency fund should actual costs exceed the estimated level."

The plan would drop the maximum amount of subsidies a farmer could receive annually from $360,000 to $250,000, a move the administration says that could save some $5.7 billion over the next 10 years.

The budget provides an increase of $7.5 million for an enhanced mad cow disease research program and funding for continued testing and implementation of the National Animal Identification System to help prevent the spread of the fatal brain wasting disease.

The USDA budget proposal includes $100 million, an increase of 15 percent over 2005, for food and education for women and children in need elsewhere in the world, Johanns said.

The annual budget for the U.S. Forest Service, which falls under USDA, would drop from $4.28 billion to $4.06 billion under the budget request.

The $7.57 billion proposed for the EPA is some $500 million less than the current budget for the agency, with the bulk of the cuts coming from grants to states for upgrades to sewage treatment facilities and clean water infrastructure.

President Bush is asking Congress to spend just $730 million on the Clean Water State Revolving Loan Fund for the 2006 fiscal year, slightly more than half of what was spent in 2004.

The administration proposed similar cuts last year, but Congress reinstated the funds.

A coalition of local elected officials, drinking water and wastewater service providers, state environmental and health program administrators, labor, engineers and environmentalists, the Water Infrastructure Network (WIN), said Monday that Congress should again reject the Bush administration's proposed cuts to water infrastructure.

Studies by the EPA, the Congressional Budget Office, the Government Accountability Office and WIN estimate a water infrastructure funding gap of more than$300 billion over the next 20 years. Given this mounting funding gap, WIN believes "it is untenable" for the federal government to cut support for clean water in America.

American Rivers called on lawmakers to reject the proposed clean water cuts and increase spending to $3.2 billion. "The administration continues to turn a blind eye to the plight of local communities, and putting off repairs just makes the final bill more expensive," said Betsy Otto, director of river advocacy for the river conservation organization.

Officials said the cut to the EPA budget does not reflect a lack of commitment to safeguarding the environment.

"The President's budget, coupled with our proven ability to leverage outcomes through strategic partnerships, insures we will continue to pick up the pace of protecting the public and the environment, while fulfilling EPA's role in homeland security," said EPA Acting Administrator Steve Johnson.

Johnson touted a $79 million increase for the agency’s homeland security efforts, a $124 million increase for the Superfund program as well as a $47 million boost for brownfields development.

The homeland security boost comes in the form of $44 million to launch a pilot program of monitoring and surveillance in select cities to provide early warning of contamination; an increase of $19.4 million for environmental decontamination research and preparedness, with an additional $4 million requested for the Safe Buildings research program; and $11.6 million in new resources to support preparedness in environmental laboratories.

The $10.8 billion budget for the U.S. Interior Department is a one percent decrease from 2006 and includes cuts in funding for the National Park Service and the U.S. Fish and Wildlife Service.

The Interior budget again calls on Congress to open the Arctic National Wildlife Refuge to oil and gas drilling, and estimates the federal government could see some $1.2 billion in leasing revenues by 2007 if Congress acts on the matter this year.

Interior Secretary Gale Norton told reporters the increased Republican majorities in both the House and Senate means this year appears to offer the "strongest opportunity" to open the refuge to drilling.

The U.S. Army Corps of Engineers also faces a cut of 7.2 percent under the Bush plan from $4.66 billion in 2005 to $4.3 billion in 2006.

American Rivers likes this part of the budget proposal. These savings are achieved in part by cutting funding for "outdated, wasteful, and environmentally destructive projects in the Mississippi River and Tributaries Program," said the conservation group. Other projects that received zero funding include the "destructive" Grand Prairie Irrigation Demonstration Project in Arkansas, and the Dallas Floodway Extension Project in Texas.

The budget prioritizes four restoration projects that, if properly implemented, will provide environmental benefits for the nation, American Rivers said. The budget provides $34 million for Upper Mississippi River Restoration; $83 million for Missouri River Fish and Wildlife Recovery; $102 million for Columbia River Fish Recovery; and $137 million for Everglades Restoration.

"If the Missouri River restoration money is spent on the priorities identified by the basin states and river stakeholders, it could help improve the ecological condition of the Missouri River and river's contribution to the economy of the basin," said Chad Smith, director of American River's Nebraska Field Office.

The Bush budget would also cut spending at the National Oceanic and Atmospheric Administration (NOAA) and the U.S. Department of Energy.

NOAA’s National Ocean Service is set for a $360 million decrease and NOAA Fisheries is earmarked for a funding cut of $45 million.

The $23.4 billion proposed for the Energy Department is a two percent decrease from the current year, but over $1 billion is budgeted to support the development of what Bush called "reliable, affordable, and emissions-free sources of energy, including hydrogen fuel, clean coal, and cutting-edge nuclear technology."

The Energy Department cuts include a $20 million drop in funding cuts for energy efficiency.

The Sustainable Energy Coalition says when cuts to renewable energy programs are added the cuts amount to nearly $50 million - an overall cut of roughly four percent.

Funds for distributed energy are cut six percent, geothermal energy is cut by eight percent, energy efficient buildings are cut by 11 percent, biomass/biofuels cut 18 percent, industrial energy efficiency cut 24 percent, and hydropower cut 90 percent.

Increased energy budget proposals favor the hydrogen program for a five percent increase and the fuel cells program for a 12 percent increase.

The 85 national and state business, consumer, environmental, and energy policy organizations of the Sustainable Energy Coalition call the Bush budget "penny-wise, pound-foolish" and say it is "bad" for the environment, public health, homeland and national security, jobs, the economy, and the development of new basic industries.

"By cutting federal funding for energy efficiency, the Bush budget takes the wrong approach at the wrong time," said Alliance to Save Energy President Kateri Callahan. "Escalating oil, gasoline, and natural gas prices are putting a stranglehold on business, industry, and consumers alike and causing disruptive fluctuations in financial markets. We need increases - not cuts - for crucial energy-efficiency programs that help the nation reduce overall energy use and lower costs."

The solar energy industry is happier with its slice of the budget pie. Funding for solar energy research was cut by 1.3 percent, but the Bush budget requests for $4.5 million for a new industry-led Crystalline Silicon Initiative. This material is used for over 90 percent of worldwide photovoltaic production.

"We appreciate the administration’s continuing support for solar energy research, especially given this year’s tight budget situation," said Rhone Resch, president of the Solar Energy Industry Association (SEIA). "The Administration’s support for the new Crystalline Silicon Initiative is proof that our federal government is committed to developing a high tech U.S. solar industry."

But disadvantaged communities will suffer under the new Bush budget, according to Mark Pinsky, president and CEO of the National Community Capital Association. He said the budget would all but wipe out the Community Development Financial Institutions (CDFI) Fund by cutting it to $8 million. These 160 financial institutions invest in small businesses, quality affordable housing, and community services that benefit economically disadvantaged people and communities.

Pinsky is a presidential appointee to the CDFI Fund Advisory Board in the Department of the Treasury and also serves as chair of the Federal Reserve Board of Governors’ Consumer Advisory Council. He said, "This seems to be part of a deliberate war of the crumbs strategy under which a variety of interests and groups would be set at each other’s throats to battle over an increasingly small amount of funds."