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Environment

2010 Budget

Obama Administration releases overview of budget request for fiscal 2010

by Jeff Johnson and Britt Erickson
February 27, 2009

President Barack Obama released on Feb. 26 a $3.6 trillion 2010 spending plan with sweeping increases in energy, education, health care, and sciences. The plan also ends $2 billion in tax breaks for oil and gas companies, as well as other tax advantages for corporations, and wealthy individuals. But it creates a $1.2 trillion deficit.

The plan is a policy document that only lays out general funding increases, except in a few areas that are particularly important to the Administration. The document discusses the $787 billion stimulus package but does not include these funds in the 2010 spending proposal. A detailed budget is expected in April.

Looking at energy spending, the Department of Energy would receive $26.3 billion in 2010 under Obama's proposal, slightly down from the $27 billion expected in the 2009 appropriation, which has yet to clear the Senate. But the department is also slated to benefit from $38.7 billion in stimulus revenues over the next two years.

Perhaps the big winner is the Environmental Protection Agency, which would receive $10.5 billion in 2010, a 34% jump over this year's likely appropriation. The budget overview includes plans to reinstate $1.2 billion by 2011 for EPA's Superfund industrial cleanup program. The funds will be collected starting in 2011 through an industry excise tax that had expired in 1995.

The Obama budget also includes future funding that will be generated through a carbon dioxide cap and trade program. The goal, the document says, is to cut greenhouse gas emissions 14% from 2005 levels by 2020 and approximately 83% from those levels by 2050, which mirror the more aggressive approaches to greenhouse gas reductions being considered in Congress.

All of the CO2 allowances will be auctioned off to companies unable to make their assigned reductions of greenhouse gas emissions. About $79 billion in CO2 cap-and-trade revenues will be generated starting in 2012, under the budget, and the new revenues will be divided between taxpayers and programs for clean energy development.

For health-related work, Obama's proposal provides $76.8 billion for the Department of Health & Human Services (HHS), down from $78.4 billion in 2009. Although details about spending levels for agencies within HHS were not provided, additional funds are expected to be given to FDA and NIH, which is also set to receive $10 billion from the stimulus package.

One of the most contentious parts of the president's FY 2010 budget for HHS are two proposals related to lowering drug costs. One supports an FDA effort to allow Americans to purchase prescription drugs from foreign countries. The other supports FDA efforts to approve generic biologics, which are biomolecule-based drugs typically produced in living cells. News of the proposals caused stock prices for many large drug companies to tumble on Thursday, some by more than 5%.

In other areas, funding for NSF, NASA, NIST and NOAA are all expected to increase. Support for the Yucca Mountain repository would be scaled back to ???costs necessary to answer inquiries from the Nuclear Regulatory Commission, while the Administration devises a new strategy toward nuclear waste disposal,??? the budget proposal says.

The budget also would eliminate many long-running tax breaks for oil and gas operations: $2 billion worth of tax loopholes would be eliminated in 2010 and more in later years, reaching $4 billion per year by 2019.

The proposal was strongly supported by members of Congress and groups that see it as a spur for energy development and to slow down climate change. But the proposed spending plan was blasted by conservatives for its deficit spending and its reliance on revenues generated through the CO2 reduction program.

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