Budget winners and losers

Politico - John Ward Anderson

In a $3.7 trillion budget, there should be something for everyone. And there is, including — as hard as it may be for some to believe — pain.

In shifting the nation's spending priorities, President Barack Obama highlights his plans for the rich to pay more and for the poor to get more. And he also focuses on key campaign pledges to make the country greener and more energy independent, to expand access to affordable health care, and to improve the nation's schools.

The full details will not be known for weeks, but the 134-page snapshot of Obama's 2010 budget that was released Thursday gives a clear indication of who gets the elevator, and who gets the shaft. So herewith, five big losers and five key winners in Obama's spending blueprint.

LOSERS

Rich people, and the even the upper middle class

Making $250,000 a year doesn't exactly make you Donald Trump these days, but to Barack Obama's team, that means your family is wealthy - and they're shifting a greater share of the tax burden onto you.

They're doing it two ways - the one Obama campaigned on through his whole run for president is no surprise, by allowing Bush's income tax cuts for the wealthy expire in 2011, meaning the marginal rates jump up again.

The other was something of a surprise. Obama wants to roll back income tax deductions for people in that income bracket as well, steps that would reduce the amount saved in taxes by claiming mortgage interest and the like. He'll funnel that money to his health-care reserve fund.

The numbers: Although this wealth redistribution scheme would hit rich people the hardest, most Americans will end up feeling some pain in one way or another, because the plan foresees a projected deficit of $712 billion in 2019, and by then, the national debt will have increased to about $23.1 trillion.

Rich farmers

Farmers who make more than $500,000 a year would see their farm subsidies phased out. The budget notes dryly that "direct payments are made to even large producers regardless of crop prices, losses, or whether the land is still under production." In other words, farmers getting paid on land that's not growing anything.

But as in other parts of the budget, it's energy efficiency that comes to the rescue - don't grow corn, grow wind farms, Obama says.

"Large farmers are well positioned to replace those payments with alternate sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat."

The numbers: Reducing the farms subsidies will cost farmers about $9.7 billion over the next 10 years. Cutting federal subsidies to crop insurance companies and farmers will cost those two groups another $5.2 billion in the next decade.

Rich oil companies

Oil prices are down now but most Americans have gotten fed up with quarter upon quarter of record profits at ExxonMobil and the like. So Obama would close loopholes enjoyed by some oil, gas, coal and mining companies, and also raise the royalties and fees they pay to provide "a better return to taxpayers."

In addition, Obama would levy a new excise tax on offshore oil and gas production in the Gulf of Mexico "to close loopholes that have given oil companies excessive royalty relief." And it would increase the return from oil and gas production on Federal lands through "administrative actions, such as reforming royalties and adjusting rates" - aka higher taxes.

The numbers: Closing loopholes, raising taxes and fees and repealing various deductions for gas, coal and oil companies will add $16.7 billion to federal coffers in 2011, increasing to about $48 billion by 2019.

The Pentagon (but not veterans)

Only in Washington is a 4 percent hike viewed as taking a hit, but so it goes for the Defense Department. Compared to the sort of increases enjoyed in the Bush administration, it's a sign that the salad days are over at the Pentagon. Homeland Security even faces a real cut in five years, as 9/11 fades further into memory. But Obama campaigned hard on the idea of improving health care for veterans and his budget puts his money where his mouth is.

The numbers: Defense budget increases to $533.7 billion. Homeland Security rises slightly to $42.7 billion this year, but dwindles to $40.9 billion by 2014. The VA's $55.9 billion budget would be an 11 percent increase over the current year.

George W. Bush

While Obama's proposed budget will hit Bush hard in the wallet, just like other wealthy Americans, the main blow may be aimed at his reputation.

The 134-page spending plan opens with a 10-page preamble entitled "Inheriting a Legacy of Misplaced Priorities" that lays blame for many of today's problems at the doorstep of the former president.

"It is no coincidence that the policy failures of the past eight years have been accompanied by unprecedented Governmental secrecy and unprecedented access by lobbyists and the well-connected to policymakers in Washington. Consequently, the needs of those in the room trump those of their fellow citizens," the plan says.

But others get blamed in a broad-brush condemnation: "For the better part of three decades, a disproportionate share of the Nation's wealth has been accumulated by the very wealthy," the budget says. It blasts "a legacy of irresponsibility," adding, "It's our responsibility to change it."

WINNERS

Sick people, but not all of them

Obama wants to put America "on a path to health insurance coverage for all Americans." That's well short of universal health care right now, but more like a down-payment. And a hefty one, $634 billion over 10 years. The budget is short on details of exactly who would be covered, and when.

He'd send more doctors, nurses and dentists to place in the country that don't have enough of them. And Obama also kicks in an increase for cancer research at the National Institutes of Health, as part of a down-the-road commitment to double cancer research funding.

The numbers: HHS would receive $76.8 billion for FY 2010 under the president's proposed plan. The plan proposes over $6 billion for cancer research, and another $330 million to help underserved areas.

Hillary Rodham Clinton

Somewhere, Colin Powell is jealous. The Bush White House funneled all the money to the Pentagon, especially after 9/11, but now the diplomats are getting a little budgetary love.
Clinton came into the job promising to fight hard for a bigger State Department slice of the fiscal pie, and in her first outing, she succeeded. It's in keeping with Obama's goal to turn a more friendly face to the world, and try to rebuild some of the global relationships that grew strained under Bush.

Obama's budget calls for putting the U.S. on a path to doubling its foreign assistance funding to "renew its role as a leader in global development and diplomacy." Global health programs, anti-terror and anti-proliferation efforts get a boost.

The plan also lays out a added component to fighting the resurgence of al Qaeda and the Taliban in Afghanistan and Pakistan -by increasing "non-military assistance to both countries, providing additional funding for governance, reconstruction, counter-narcotics, and other development activities that will help counter extremists."

The numbers: The federal spending plan increases the State Department's budget by a healthy 9.5 percent, to $51.7 billion in FY 2010.

Environmentalists

The budget includes big new spending for investments in "clean energy" technologies to reduce dependence on foreign oil.

Obama sees a nation dotted with wind farms and solar panels - and ties the effort to an effort to grow "green jobs" to pull the nation out of the recession.

He also proposes loan guarantees to reduce air pollution and greenhouse gases through a variety of means -- renewable energy projects, transmission projects, and carbon sequestration projects to keep smokestack gasses.

The numbers: The budget proposes $26.3 billion for the Energy Department, on top of $38.7 billion included for energy programs in the recent stimulus package.
People stuck in traffic

The spending plan includes a five-year $5 billion high-speed rail state grant program, on top of $8 billion targeted for rail expansion in the stimulus package. "The President's proposal marks a new Federal commitment to give the traveling public a practical and environmentally sustainable alternative to flying or driving," the budget plan says.

But there's plenty of good old fashioned roads and bridges money, too. And if you must fly, Obama's kicking in about $800 million for long-term efforts to improve the efficiency, safety, and capacity of the air traffic control system.

The numbers: Transportation spending would rise to $72.5 billion in the proposed budget, a slight increase over the current fiscal year, along with $48.1 billion approved in the recent stimulus package.

College students looking for a job

If you want to go to college, get a career, or are learning English as a second language, Obama wants to help you. Low-income students would get help completing college from a new five-year, $2.5 billion Access and Completion Incentive Fund.

The numbers: The budget proposes $46.7 billion for education next year, a small increase over this year, but it comes on the heels of $81.1 billion in additional education spending recently approved by Congress in the $787 billion stimulus package.