Monday, February 14, 2011

A Tale of Two Spending Plans (2012 and 2011)

2012 Fiscal Year Budget
The Obama Administration released its 2012 Fiscal Year budget proposal this morning  in a move that is sure to kick off weeks, and possibly months, of debate among fiscally conservative and progressive members of Congress and the Administration regarding which Federal programs to cut, and by how much.

The Obama budget proposal would arguably reduce the national debt by $1.1 trillion in the next 10 years through a combination of cuts, spending freezes and tax increases. About one-third of the Obama deficit reduction would be reached by raising taxes, and two-thirds of the reduction would come from spending cuts, many to popular programs, including several to programs that further ecosystem restoration, and land and water conservation in the Mississippi River watershed.  

EPA's budget would see a decrease of $1.3 billion below Fiscal Year 2010 enacted levels.  EPA's "Budget in Brief" is available here and contains details and justifications on their proposed budget.

The Administration proposes to fund a Mississippi River Basin program in 2012 at a level of $6.6 million (although not funded in Fiscal Year 2011, the Administration proposed to fund this program at a $17 million level in its fiscal 2011 budget proposal).  The EPA Budget in Brief describes the program as a competitive grant program in cooperation with States that will address excessive nutrient loadings contributing "to water quality impairments in the basin and, ultimately, to hypoxic conditions (dead zones) in the Gulf of Mexico."  The EPA budget brief goes on to say that, "Working with the Gulf Hypoxia Task Force, EPA will help target efforts within critical watersheds to implement effective strategies that can yield significant progress in addressing nonpoint source nutrient pollution.  A key emphasis will be coordinating with USDA and USGS to promote sustainable agricultural practices, to reduce nutrient loadings in the Mississippi River Basin and to implement monitoring programs to measure nutrient reductions."  The proposed $6.6 million budget Includes $0.6M for "enforcement actions in the Basin."

Two key Environmental Protection Agency budget reductions proposed by the Administration are cuts in the Clean Water and Drinking Water State Revolving Funds (SRFs), and to the Nonpoint Source Grant program.   
  • SRF programs would be reduced $947 million from Fiscal Year 2010 appropriated levels to $2,540 million.  SRFs provide grants to States to capitalize their State-run revolving funds, which provide loans to support improvements in municipal wastewater and drinking water systems.  The Administration contends in its "Terminations, Reductions and Savings" document, accompanying the budget release, that the proposed SRF funding levels, while representing cuts from "historically high funding levels provided in 2010," are not draconian in the sense that they are a "total of $1 billion more than provided in regular appropriations in 2009." 
  • Nonpoint Source Grants would be reduced $36 million from Fiscal Year 2010 appropriated levels to $201 million. Through these grants, States fund nonpoint source staff, watershed planning, and project implementation to address water pollution runoff from urban, agricultural, and other sources.
With the proposed cuts to USDA’s mandatory Farm Bill conservation programs, overall, conservation programs will lose more than $1 billion from what they would have received under the funding growth levels envisioned in the 2008 Farm Bill.  Among the cuts, however, the budget proposal includes the largest funding levels ever for the Wetlands Reserve and Environmental Quality Incentives programs. Here are some USDA conservation program 2012 funding levels included in the President's budget:
  • Agricultural Management Assistance Program: $3 million - provides cost share assistance to agricultural producers to voluntarily address issues such as water management, water quality, and erosion control by incorporating conservation into their farming operations.
  • Agricultural Water Enhancement Program: $60 million - operated under EQIP, AWEP promotes the conservation of ground and surface water and the improvement of water quality.
  • Conservation Reserve Program: $1.995 billion - CRP provides technical and financial assistance to eligible farmers and ranchers to address soil, water, and related natural resource concerns on their lands in an environmentally beneficial and cost-effective manner. The program provides assistance to farmers and ranchers in complying with Federal, State, and tribal environmental laws, and encourages environmental enhancement.
  • Conservation Stewardship Program: $788 million - CSP is a voluntary program that provides financial and technical assistance on Tribal and private agricultural working lands to support ongoing conservation stewardship. The program provides payments to producers who maintain and enhance the condition of natural resources.
  • Environmental Quality Incentives Program: $1.408 billion - EQIP provides assistance to landowners who face serious natural resource challenges that impact soil, water and related natural resources, including grazing lands, wetlands, and wildlife habitat.
  • Farm and Ranch Lands Protection Program: $200 million - FRPP provides funding for the purchase of conservation easements or other interests in land for the purpose of protecting agricultural use and related conservation values by limiting non-agricultural uses of the land.
  • Grasslands Reserve Program: $67 million - GRP is a voluntary program to help landowners and operators restore and protect grassland, including rangeland, pastureland, and certain other lands, while maintaining the lands’ suitability for grazing.
  • Sustainable Agriculture Research and Education: $15 million - The SARE program advances the growth of farming systems that are profitable, environmentally sound and good for communities through a nationwide research and education grants program.
  • Wetlands Reserve Program: $785 million - WRP is a voluntary program in which landowners are paid to retire cropland from agricultural production if those lands are restored to wetlands and protected, in most cases, with a long-term or permanent easement.
  • Wildlife Habitat Incentives Program: $73 million - WHIP provides financial and technical assistance to eligible participants to develop habitats for upland wildlife, wetland wildlife, threatened and endangered species, and fish and other types of wildlife.
Army Corps of Engineers
The Army Corps' Fiscal Year Program Budget Press Book is available here (pdf file).  In that press book (page 19), the Corps reports that its Upper Mississippi River Restoration work (i.e., in Illinois, Iowa, Minnesota, Missouri and Wisconsin) would be funded at a $18.15 million level in 2012, which would represent a $1.65 million increase from 2010 appropriated levels (although a decrease from the President's $21 million 2011 budget proposal).  The Army Corps' construction budget for Mississippi River programs (which goes mostly for dredging and flood control in the Lower Mississippi River) would take a 39 percent cut from Fiscal Year 2010 levels, down to $210 million in Fiscal Year 2012.

We are reviewing the Press Book now for further details on the Army Corps of Engineers Civil Works budget related to Mississippi River Basin navigation, operation and maintenance, other construction and environmental restoration, although, in general, nationally, "environmental projects" are cut significantly from the appropriated 2010 fiscal year's $795 million to $221 million in the President's 2012 proposal; "aquatic ecosystems" program funding is cut from $39 million (2010) to $12 million (2012 proposal), and "project modification for environmental restoration" would be reduced from $22 million (2010) to $18 million (2012).  
What's Next - Keep in mind that the Administration budget proposal is just that - a proposal.  In the meantime, House Budget Committee Chair Paul Ryan (R-WI-1st) is reported to be preparing his own 2012 budget plan, called a budget resolution, which he plans to release in April.  The budget resolution will be Congress’s response to the President’s proposed budget, and, in part, is used to set spending ceilings for appropriations in the upcoming fiscal year.

2011 Fiscal Year Appropriations
Late Friday night, House Republicans released a Fiscal Year 2011 Continuing Resolution (CR) that would appropriate money for Federal spending from the beginning of March, when the current CR expires, through the remainder of the 2011 Fiscal Year, which ends September 30. Like the President's Fiscal Year 2012 proposal, the GOP plan would cut Federal spending in numerous programs that relate directly to Mississippi River Basin restoration and conservation (however, the House Fiscal Year 2011 would do so to a considerably more significant extent when compared to the President's 2012 proposal).  The detailed list of the House Republicans' proposed cuts can be found here (as a pdf file; in alphabetical order, by Appropriation's Committee Subcommittee). It is noteworthy that, in addition to cutting the Environmental Protection Agency’s budget by $3 billion the Republican proposed CR contains language that would block the agency from implementing its climate change rules.

Here is a link to the full (360-page) House Continuing Resolution, which the House will begin considering on Tuesday, with debates scheduled throughout the remainder of the week.  

What's Next - A House vote on the CR may occur as soon as late this week.  Once the 2011 Fiscal Year CR passes the House, it will then move on to the Senate, where many of the House's spending cuts will undoubtedly be removed, setting up a showdown between the House and Senate.  The two chambers will have to work out a compromise by March 4, when the current CR expires, to avoid a potential government shutdown. Alternatively, the possibility exists that Congress will pass yet another short-term CR to keep the government running while the two chambers work out their differences.

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