2010 Budget Outline Boosts Federal Spending for Most TBED Priorities

First budgets for new presidential administrations are often delayed from their regular February release as new staff within the agencies and White House get settled. The first Bush budget proposal in 2001, for instance, was not released until the 2nd week of April. That contrasts sharply with the Obama Administration's initiation by fire into the federal budget process with introduction and passage of the American Recovery & Reinvestment Act two weeks ago and the budget for the balance of the current fiscal year just passing the House last week and under consideration in the Senate this week. The Continuing Resolution presently keeping the federal government in business expires this Friday so some action must be taken by then. [Note: SSTI will release a special issue of the Digest when a 2009 budget becomes law.]

Because the Obama Administration is calling for significant shifts in spending priorities and activities for the federal government, the White House has released a budget outline in advance of its first formal budget request. The 136-page outline, carrying the heavy title of A New Era of Responsibility: Renewing America's Promise, is an innovation in itself for the budgeting process and is intended to start several discussions on the powers - and limits - of federal spending.

The administration has set an ambitious goal of halving the federal deficit during the next four years - ambitious given the economic downturn, fighting two wars, an aging population, and past federal spending habits. The first 10 pages of the outline lay out the solemn facts and admonish us to behave differently from now on. It also points out that to rein in the federal  deficit, each dollar must be spent strategically and the outline continues with suggestions on the paths the administration would like federal spending to pursue. Many of these paths are similar directions pursued by tech-based economic development practitioners at the state, local and university levels across the country, regardless of their geographic location, population size, and political persuasion.

Department of Agriculture
The total USDA request of $26.0 billion is slightly less than the FY 2008 level of $26.1 billion. The request is in addition to the $6.9 billion USDA received in the Recovery Act.

• To spur the development of small business and value-added agriculture in rural America, the president's budget provides $61 million for five Rural Development programs supporting TBED goals: the rural microentrepreneur assistance program, rural cooperative development grants, value-added producer grants, grants to minority producers, and cooperative research agreements.
• $1.3 billion in loans and grants to increase broadband capacity and improve telecommunication service and education and health opportunities in rural areas.
• $250 million for loans and grants to support renewable and alternative fuel development in rural areas (biofuels and wind power are specifically mentioned).
• $70 million for competitive research grants that provide incentives for teachers working in rural areas, to pursue professional development, and to enhance existing rural research and extension programs at land grant and minority-serving institutions.

Department of Commerce
The total DOC request of $13.8 billion is 75 percent higher than FY 2008 spending of $7.9 billion, attributable in large part to a $4 billion increase to conduct the 2010 Census. The request is in addition to the $7.9 billion DOC received in the Recovery Act.

• $250 million for the Economic Development Administration which is divided into three components, two of which are new:
• $125 million for the Hollings Manufacturing Extension Partnership to enhance the competitiveness of the Nation's manufacturers by facilitating the adoption of more efficient manufacturing processes.
• $70 million for the Technology Innovation Program, which invests in high-impact research that will address critical national needs and advance innovation.
• The U.S. Patent and Trademark Office would get full access to its fee collections, which will provide resources to strengthen the Office's ability to encourage innovation and safeguard the value of intellectual property through more efficient and higher quality patent and trademark examinations.
• $1.3 billion for National Oceanic and Atmospheric Administration to fund the development and acquisition of vital weather satellites and climate sensors.
• No new funding for the National Telecommunications and Information Administration, which will be focused on administering the $4.7 billion provided by the Recovery Act for programs to expand broadband deployment, adoption, and data collection.
• $50 million in new regional planning and matching grants to support the creation of regional innovation clusters that leverage regions' existing competitive strengths to boost job creation and economic growth.
• A new $50 million initiative to create a nationwide network of public-private business incubators to encourage entrepreneurial activity in economically distressed areas.
• $150 million to distribute as economic adjustment assistance and infrastructure funding, with priority for areas experiencing severe job losses.

Department of Defense
The total DOD request of $663.7 billion is slightly less than the $666.0 billion in FY 2008 (both figures include the cost of the wars in Iraq and Afghanistan.)  The request is in addition to the $7.4 billion DOD received in the Recovery Act.

Base FY 2010 funding, which excludes the wars, would increase four percent in the request. Details for Defense in the request focus on non-research issues.

Department of Education
The total DOEd request of $46.7 billion is $1.7 billion higher than FY 2008 appropriation levels. The request is in addition to the $81.1 billion DOEd received in the Recovery Act.

• Supports a $5,550 Pell Grant maximum award in the 2010-2011 school year, indexes future Pell grant amounts to the Consumer Price Index plus one percent, and makes the Pell Grant program a mandatory spending item.
• A new five-year, $2.5 billion Access and Completion Incentive Fund to support innovative state efforts to help low-income students succeed and complete their college education.

Department of Energy
The total DOE request of $26.3 billion is $2.2 billion higher than FY 2008 spending level of $24.1 billion. The request is in addition to the $38.7 billion DOE received in the Recovery Act. There are no specific FY 2010 funding levels presented for any TBED-related DOE priorities in the budget outline.

Department of Health & Human Services
The total HHS request of $76.8 billion is $6.3 billion higher than FY 2008 levels. The request is in addition to the $22.4 billion HHS received in the Recovery Act.

• Invests more than $6 billion for cancer research at the National Institutes of Health as a first step in the administration's multi-year commitment to double cancer research funding.
• Invests $330 million to increase the number of doctors, nurses, and dentists practicing in areas of the country experiencing shortages of health professionals.
• New but an unspecified level of funding to broaden the Medicare and Medicaid research agenda.
• $211 million for research into the causes of and treatments for Autism Spectrum Disorders (ASD), ASD screenings, public awareness, and support services.

Department of Homeland Security
The total DHS request of $42.7 billion is $7.3 billion less than the FY 2008 spending level. The request is in addition to the $2.8 billion DHS received in the Recovery Act.

The only research related mention in the DHS outline is $36 million to support ongoing projects to improve surveillance technologies to detect enhanced, emerging and advanced biological threats.

Department of Housing and Urban Development
The total HUD request of $47.5 billion is $400 million higher than the FY 2008 spending level. The request is in addition to the $13.6 billion HUD received in the Recovery Act.

• Provides full authorization level funding of $4.5 billion for the Community Development Block Grant program. In addition, the budget request reforms the program's formula to better target economically distressed communities. The program also would stimulate innovations in metropolitan sustainability, university partnerships, and rural housing and economic development.
• Creates a new Energy Innovation Fund, in partnership with DOE, to catalyze private sector investment in the energy efficiency of the nation's housing stock. The funding request for the fund is not specified in the budget outline.

Department of Interior
The total DOI request of $12.0 billion is $300 million higher than the FY 2008 spending level of $11.7 billion. The request is in addition to the $3.0 billion DOI received in the Recovery Act.

• $50 million in increases to conduct the environmental evaluations and technical studies needed to spur development of renewable energy projects, assess available alternative resources, and mitigate the impacts of development.

Department of Justice
The total DOJ request of $26.5 billion is $2.9 billion higher than the FY 2008 spending level of $23.6 billion. The request is in addition to the $4.0 billion DOJ received in the Recovery Act. There are no specific FY 2010 funding levels presented for any TBED-related DOJ priorities in the budget outline.

Department of Labor
The total DOL request of $13.3 billion is $1.5 billion higher than the FY 2008 spending level of $11.8 billion. The request is in addition to the $4.8 billion DOL received in the Recovery Act.

• The administration will direct existing programs to find ways to prepare workers for jobs associated with products and services that use renewable energy resources, reduce pollution, and conserve natural resources.

Department of Transportation
The total DOT request of $72.5 billion is $1.9 billion higher than the FY 2008 spending level of $70.6 billion. The request is in addition to the $48.1 billion DOT received in the Recovery Act.

• The administration proposes a five-year, $5 billion high-speed rail state grant program. Building on the $8 billion down payment in the American Recovery and Reinvestment Act of 2009, the president's proposal is intended to mark a new federal commitment to give the traveling public a practical and environmentally sustainable alternative to flying or driving. Directed by the states, this investment is designed to lead to the creation of several high-speed rail corridors across the country linking regional population centers.

Department of the Treasury
The total Treasury request of $13.3 billion is $1.1 billion higher than the FY 2008 spending level of $12.2 billion. The request is in addition to the $300 million Treasury received in the Recovery Act.

• Doubles funding for the Community Development Financial Institutions Fund (CDFI) to exceed $200 million. Through merit-based grant programs, CDFI helps locally based financial institutions offer small business, consumer and home loans in communities and populations that lack access to affordable credit.

Environmental Protection Agency
The total EPA request of $10.5 billion is $3.0 billion higher than the FY 2008 spending level of $7.5 billion. The request is in addition to the $7.2 billion EPA received in the Recovery Act.

Following enactment of the FY 2010 budget, the administration will work to develop an economy-wide emissions reduction program to reduce greenhouse gas emissions approximately 14 percent below 2005 levels by 2020, and approximately 83 percent below 2005 levels by 2050. This program would be implemented through a cap-and-trade system, which would use a 100-percent auction to generate a $150 billion fund over ten years, beginning in 2012, for clean energy investments. The balance of the funds generated through the cap-and-trade auction would be used to help families, communities, and businesses to help the transition to a clean energy economy.

NASA
The total NASA request of $18.7 billion is $1.5 billion higher than the FY 2008 spending level of $17.2 billion. The request is in addition to the $1.0 billion NASA received in the Recovery Act.  There are no specific FY 2010 funding levels presented for any of the TBED-related NASA priorities in the budget outline. Worth highlighting however, are two points:

• Using the National Research Council's recommended priorities for space-based Earth science research as its guide, NASA would develop new space-based research sensors in support of the Administration's goal to deploy a global climate research and monitoring system. The funding level of this new initiative is not specified.
• NASA would renew its commitment to cutting-edge, fundamental research in traditional and emerging disciplines to help transform the nation's air transportation system and to support future aircraft.

National Science Foundation
The total NSF request of $7.0 billion is $950 million higher than the FY 2008 spending level of $6.1 billion. The request is in addition to the $3.0 billion NSF received in the Recovery Act.  The administration has stated a commitment to doubling funding for basic research over ten years. 

There are no specific FY 2010 funding levels presented for any of the TBED-related NSF priorities in the budget outline. Noteworthy initiatives described briefly in the outline state the budget request:

• Establishes a climate change education program to help develop the next generation of environmentally engaged scientists and engineers;
• Increases support for promising, but exploratory and high-risk research proposals that could fundamentally alter understanding of nature, revolutionize fields of science, and lead to radically new technologies;
• Increases support for the Advanced Technological Education program, which focuses on two-year colleges and supports partnerships between academic institutions and employers to promote improvement in the education of science and engineering technicians; and,
• Provides substantial increases for NSF's prestigious Graduate Research Fellowship and Faculty Early Career Development programs.

Small Business Administration
The total SBA request of $700 million is $900 million lower than the FY 2008 spending level of $1.6 billion. The request is in addition to the $700 million SBA received in the Recovery Act. Loan guarantee levels, however, would be increased to $28 billion, including:

• $17.5 billion for Section 7(a) Guarantees, and increases the guarantee level to 90 percent on new loans;
• $7.5 billion for Section 504 guaranteed debentures through Certified Development Companies;
• $3.0 billion in authority for Small Business Investment Companies debentures; and,
• $25 million in microloan volume.

Corporation for National and Community Service
The total CNCS request of $1.1 billion is $200 million higher than the FY 2008 spending level of $900 million. The request is in addition to the $200 million CNCS received in the Recovery Act.

• The budget request would create a new social innovation fund, charged with testing promising new approaches to major challenges, leveraging private and foundation capital to meet these needs, and scaling up research-proven programs. No specific funding level is mentioned in the Budget outline.