Obama 2010 budget highlights by agency

February 26, 2009 11:24:45 AM PST
Available details of President Barack Obama's proposed government spending for the 2010 budget year that begins on Oct. 1. A more extensive budget outline is expected in April. In most cases, the figures are for discretionary spending and do not include mandatory entitlement programs like Social Security. The percentage change is based on what Obama wants to spend next year compared with what he anticipates the government will spend in 2009 once Congress completes appropriations for this year.

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Health budget aims toward universal coverage
Agency: Health and Human Services
2010 proposal: $821.7 billion ($78.7 billion for discretionary spending, plus $453 billion for Medicare and $290 billion for Medicaid)
Change from 2009 estimate: 7.5 percent increase
Highlights: The government's gargantuan health insurance programs for the elderly and poor would grow more slowly under Obama's proposed health care budget.

Obama wants to squeeze Medicaid and Medicare spending to help create a 10-year, $634 billion fund billed as a "down payment" on his goal of providing health insurance for all. He would use $316 billion in savings from those entitlement programs and predicts other savings by reducing the rate by which wealthier people can cut their taxes through certain deductions.

Obama's budget proposal acknowledges that "additional funding will be needed" for health coverage for all, but doesn't say how much or where it would come from.

Experts say achieving universal coverage could top $1 trillion over 10 years.

The 2010 budget for Medicare, the health insurance program for people 65 and older, is proposed at $453 billion. That's a 6.5 percent increase from 2009.

Medicaid, which covers certain poor and disabled people, would be funded at $290 billion in 2010, up 12 percent from 2009.

Some of the Medicare savings would come from scaling back payments to private insurance plans that serve older Americans, which many analysts believe to be inflated.

Other proposals include charging upper-income beneficiaries a higher premium for Medicare's prescription drug coverage, and increasing the amount of money drug manufacturers rebate to states for prescription drugs covered under Medicaid.

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Environment would get large increase
Agency: Environmental Protection Agency
2010 proposal: $10.5 billion
Change from 2009 estimate: 34.6 percent increase
Highlights: Obama's budget signaled that the environment is a priority by providing the biggest increase for the Environmental Protection Agency in eight years.

The proposal nearly triples - to $3.9 billion - funding for states, local governments and tribes. They can use the money to improve sewage treatment plants and drinking water systems and to protect drinking water sources. These programs already received $6 billion in the recently approved stimulus package.

The EPA budget also would provide families, communities and businesses billions to offset the higher energy prices expected if Congress passes legislation to control greenhouse gases.

Starting in 2012, the budget proposes to invest $15 billion a year in clean energy - money generated from auctioning permits to companies that emit the gases blamed for global warming. The rest of the climate cash will be returned to taxpayers.

But it is far from certain that legislation will pass this year.

In another move that could increase energy prices, the EPA budget calls for reinstating taxes on petroleum products, chemical feedstocks and crude oil to pay for cleaning the country's most hazardous waste sites. These taxes expired in 1995. They would start up again in 2011 under Obama's budget.

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Big increase sought for poor neighborhoods
Agency: Housing and Urban Development
2010 proposal: $47.5 billion
Change from 2009 estimate: 18.5 percent increase
Highlights: Obama proposed spending more to house the poor and invest in poverty-stricken neighborhoods.

In past years, President George Bush proposed cuts for some of the Housing and Urban Development Department's biggest programs, including the Community Development Block Grant. Communities rely on the grants to help lure businesses and to improve neighborhoods.

Obama takes a different approach. He would increase spending from $3.9 billion to $4.5 billion and change the funding formula to give distressed neighborhoods more money.

One of the largest spending increases was recommended for the HOPE for Homeowners program - from $225 million to nearly $1.4 billion next year. The program helps eligible families refinance their mortgages into new 30-year or 40-year loans with lower payments.

Obama would create some new programs within HUD as well. He would provide $1 billion to start a trust fund that will be used to rehabilitate housing for the poorest families. The money would be spent over the next six years. He would also dedicate an unspecified amount to renovate older homes to make them more energy efficient.

The administration would also increase spending on vouchers to subsidize rent for more than 2 million families.

The president recommending eliminating two of the smallest programs within HUD, saving about $16 million.

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College tuition aid would increase
Agency: Education
2010 proposal: $46.7 billion
Change from 2009 estimate: 12.8 percent increase
Highlights: Obama is calling for a huge expansion of the government's role in making college more affordable and putting it within reach of more kids.

In his budget proposal to Congress, Obama seeks to tie the Pell Grant program to inflation for the first time since it began. The Pell Grant program would grow by more than 150 percent over the next decade.

And in a proposal sure to rile the nation's lenders, Obama seeks to end government-guaranteed loans and to boost the government's own direct lending in an effort to insulate students from turmoil in financial markets.

Such a move would end a long-standing partnership between the government and the private sector - a partnership that has begun to crumble in recent months under the weight of the credit crisis.

Government-subsidized loans currently dwarf the direct loans.

The subsidized program provided $56 billion in loans to around 6 million students last year. The government's direct loan program provided $14 billion in loans to 1.5 million students.

Lawmakers have struggled to keep Pell Grants growing, frequently failing to increase the size of the grants even as college costs soared.

Obama proposes to take Pell Grants out of lawmakers' hands, giving the program a mandatory stream of dollars like Social Security and Medicare, and to index Pell Grants to the annual inflation rate.

Pell Grants mostly support students from families earning under $30,000 a year.

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Farm payments would be slashed
Agency: Agriculture
2010 proposal: $26 billion
Change from 2009 estimate: 8.8 percent increase
Highlights: Big farms that receive large government subsidies would lose some of that money under Obama's budget.

Obama would break from the five-year farm bill that Congress enacted last year, with his support. He proposes eliminating what are known as direct payments - subsidies that are paid to farmers regardless of crop prices or how much they grow - for producers with more than $500,000 in annual sales revenues.

The budget also proposes eliminating other agricultural subsidies, putting a cap on the amount of money an individual farmer can receive. President George Bush made similar proposals to cut payments for the largest corporate farms in many of his annual budgets, but he was rebuffed each year by Congress.

Southern lawmakers in particular oppose cutting farm subsidies because cotton and rice crops there are more expensive to grow. The farm bill, enacted over Bush's veto, raised subsidies for some crops.

Nutrition would get a boost under this budget, with $1 billion more each year to improve child nutrition programs and enhance the nutritional quality of school meals. Obama also would direct more money to loans and grants for renewable fuels production.

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Slight increase sought for defense spending
Agency: Defense
2010 proposal: $533.7 billion
Change from 2009: 4 percent increase
War spending (addition to annual budget): $130 billion for 2010, $75.5 billion for 2009
Highlights: Obama wants only a modest increase in defense spending for 2010.

His proposal of at least $533.7 billion is only a 4 percent increase from estimated 2009 spending. Such a sizable sum shows the new administration plans to take a moderately conservative approach to the nation's defense.

But some weapon systems may take big cuts as officials and contractors decide how existing programs fit into that budget after adjustments for inflation.

Obama's request to Congress on Thursday also includes a separate $205.5 billion for the wars in Iraq and Afghanistan between now and fall 2010. More than a third of the war money - $75.5 billion - would be spent before October, when the new budget year begins.

Obama's senior defense advisers have warned that extraneous defense spending would be cut but said a detailed plan won't be released until April.

The administration said Thursday that big-ticket programs were risky and vowed to set "realistic requirements" for military priorities.

The administration said it also planned to increase the size of the Army and Marine Corps and increase salaries for service members by 2.9 percent. It also will try to improve care for wounded veterans.

While the rhetoric does not bode well for contractors developing pricey weapon systems, the 2010 budget plan still reserves a considerable amount for the military, including some $10 billion a month for combat operations in Iraq and Afghanistan.

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Energy budget promotes 'green' projects
Agency: Energy
2010 proposal: $26.3 billion
Change from 2009 estimate: 0.4 percent decrease
Highlights: A dramatic shift away from support for fossil fuels to new "green" energy is at the core of Obama's first proposed budget.

The Energy Department's spending plan would pay for "significant increases in basic research" into developing clean and renewable energy including solar, wind and geothermal sources, and to make motor fuel from plants.

Overall spending for the department would change little from what Congress is providing now, but would be about 5 percent higher than what President George Bush proposed a year ago. Compared to the Bush budget, it proposes a major redirection of spending to reflect Obama's strong support for renewable energy and away from fossil fuels.

While the budget summary provides few specific numbers, it would pump more money into: - Creating a "smart" electric transmission grid.

- Loan guarantees to bring solar, wind, geothermal and other renewable energy sources to market.

- Determining commercial viability of capturing carbon from coal-burning power plants.

- Helping low-income families improve the energy efficiency of their homes, a program the Bush administration wanted to eliminate.

While spending on nuclear weapons programs would remain about the same, Obama calls for scrapping a Bush administration program to build a new, more reliable warhead.

Obama would funnel more money to combat global nuclear proliferation, including safeguarding "loose nukes" in Russia.

The budget calls "a new strategy toward nuclear waste disposal" from commercial power plants and would cut spending on the proposed Yucca Mountain waste dump in Nevada.

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Sizable expansion sought in veterans spending
Agency: Veterans Affairs
2010 proposal: $52.5 billion
Change from 2009 estimate: 10 percent increase
Highlights: Obama proposed a Veterans Affairs budget that takes a step toward expanding health care access to non-disabled veterans whose incomes exceed about $30,000 annually.

Those veterans didn't qualify for VA health care under the Bush administration. By 2013, the administration said 500,000 of the qualifying "Priority 8" veterans would be eligible.

Obama's budget also would provide extra funding for homeless veterans and those in rural areas. It would fund upgrades to the VA's technology system to help eliminate the average six-month wait to have a disability claim processed, and to resources to implement the post-9/11 GI Bill.

Sen. Patty Murray, D-Wash., a member of the Senate Veterans Affairs committee, called the proposed increases encouraging, but expressed concern.

"I believe that we need to move quicker to get our 'Priority 8' veterans within the system, so that's one area I'll be looking at," Murray said.

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High-speed trains, rural air service would benefit
Agency: Transportation
2010 proposal: $72.5 billion
Change from 2009 estimate: 2.8 percent increase
Highlights: Obama's transportation budget would make a $5 billion installment payment on his campaign promise to build a national network of high-speed passenger trains.

But it sidesteps how to shore up the essentially insolvent highway construction program.

The federal Highway Trust Fund depends in part on gas tax revenue, which is declining. Last fall, Congress transferred $8 billion to the trust fund from the Treasury to make up for a shortfall between money promised to states for highway and bridge projects and money available in the fund. Obama said he wants to work with Congress to find a solution, but his budget outline provided no specifics.

The high-speed rail money would be spread out over five years. That's on top of the $8 billion for high-speed trains in the recently enacted economic stimulus bill.

In Europe and Japan, some trains travel over 180 miles per hour. The only similar train in the United States is Amtrak's Acela, which travels 150 miles per hour in some places between Washington and Boston.

Former President George Bush wasn't a proponent of high-speed rail and proposed eliminating funding for Amtrak.

Also in Obama's transportation proposal:
- $800 million for the Federal Aviation Administration's program modernize the nation's air traffic control system. That's up from about $660 million, but on course for what FAA was expected to spend.

- A $55 million increase in subsidies for commercial air service to rural communities - up about 50 percent over the 2009 budget year that ends Sept. 30. Bush tried to cut the program by more than half.


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