Budget breakdown: How agencies, programs fared

Winners and losers in President Bush's fiscal 2009 budget proposal, courtesy of CongressDaily: Agriculture

As he had proposed for this year's farm spending, President Bush Monday unveiled another hold-the-line budget for the Agriculture Department for fiscal 2009. Down to the dollar, the president's budget calls for slightly more than $94.7 billion in total agriculture spending for discretionary and mandatory programs in the next fiscal year. That is slightly less, $10 million, than the amount he estimates will be spent this year on USDA programs. Discretionary spending for the Food and Nutrition Service and for commodities and international programs would be increased, while spending for the Forest Service, research, and conservation programs would be cut. Under mandatory outlays, the Agricultural Marketing Service, Natural Resources Conservation Service and crop insurance programs would receive boosts in spending, along with food and nutrition. Savings would be achieved, according to the budget plan, by "tightening overly broad waivers from eligibility criteria" for the food stamp program, while 33 other programs would be terminated or reduced. Among the terminations would be the Resource Conservation and Development, Commodity Supplemental Food, and Watershed Surveys and Planning programs. The first two, the budget document maintains, duplicate other USDA efforts; the latter "is not a core responsibility of the federal government." In all, the plan noted, about $2.3 billion would be saved by these spending cuts.

Agriculture Secretary Ed Schafer tacitly acknowledged that the overall spending was flat because the department is awaiting congressional action on a new farm bill and that he will not propose any changes to the definition of who is "actively engaged" in farming and thus eligible for federal subsidies until the legislation is enacted. He also said most of the 10 percent cut in research represents congressional earmarks.

In policy initiatives, the president proposes to reduce trade barriers by calling for adoption of free trade agreements with Colombia, Panama and South Korea, which he argues would "level the playing field for U.S. producers." And he reiterated his support for the Northwest Forest Plan to open national forests for logging of 3.5 billion board feet of timber, including 800 million board feet in FY09.

-David Hess and Ira Allen

Commerce

President Bush's final budget calls for a hefty spending increase of nearly $900 million for Commerce Department activities with a new focus on initiatives to monitor climate change and natural disasters. The White House is proposing an overall $8.2 billion budget for Commerce for fiscal 2009, compared to an estimated $7.3 billion for fiscal 2008. Total discretionary budget authority is also slated at almost $8.2 billion.

The department is highlighting $634 million for the so-called American Competitiveness Initiative for investments in quantum and neutron research, nanotechnology and other scientific efforts at the National Institute of Standards and Technology, a 20 percent hike over fiscal 2008 enacted levels. But international interest in global warming is attracting increased attention by the outgoing administration with a proposed $981 million to develop and acquire weather satellites and climate sensors-$220 million over fiscal 2008 enacted levels and $31 million over the Bush fiscal 2008 budget request-to step up forecasts of severe weather changes, fires and drought.

But the Commerce budget also includes six programs valued at $375 million that will either be cut or ended. These include Manufacturing Extension Partnership centers due to become independent as originally envisioned, reduction of economic development grants that will be refocused to economic adjustment assistance, and public telecommunications grants for supporting public broadcasters' transition to digital signals.

-Michael Posner

Defense

Education

The $64.9 billion fiscal 2009 budget proposed for the Education Department would slightly increase support for the No Child Left Behind Act's main funding source and restore backing for a controversial literacy program. President Bush's request, a small boost from the $62.6 billion proposed for fiscal 2008 but a decrease from the $68.6 billion appropriators approved for this year, would increase Title I funding to $14.3 billion. That's a slight increase from the $13.9 billion Bush requested for fiscal 2008. According to budget documents, this would mark a 63 percent increase since 2001.

Bush's proposal also calls for $1 billion for Reading First, a grant program aimed at increasing literacy instruction for low-income primary school students. Congress cut about $600 million from the initiative for fiscal 2008 following an investigation into whether it favored schools using textbooks backed by the administration. "I know there is great support of this program in the field, and I hope that Congress will have a sense of that" this year, Education Secretary Margaret Spellings said at a briefing.

The Pell Grant program, meanwhile, would be increased by $2.7 billion in fiscal 2009 for a total of $18.9 billion, which would allow an annual award of up to $4,800 per student in 2009. Part of the Pell Grant increase would go toward the creation of a $300 million grant program for children aimed at promoting private school choice for students at low- and under-performing schools. Spellings said the grants should be looked at as "lifelines" for students at drop out factories." Under the President's American Competitiveness Initiative, the proposed budget would give $175 million to train math and science teachers in fiscal 2009, an increase from the estimated $44 million for fiscal 2008. The White House's plan would eliminate a total of 47 programs considered to be "duplicative and ineffective," Spellings said. The purged programs, which include the Even Start literacy initiative, would result in $3.8 billion in savings.

--Theresa Poulson

Energy

The Bush administration is proposing to slash low-income energy assistance amid a bipartisan Senate effort to boost such aid in the economic stimulus plan. The administration's fiscal 2009 budget request eliminates low-income weatherization assistance-which Congress allocated more than $220 million for this year. The administration is proposing $2 billion-a 17 percent, or $570 million cut-for the Low Income Home Energy Assistance Program. President Bush proposed to cut LIHEAP by $400 million in fiscal 2008, but Congress instead gave it a $400 million boost. Sens. Jack Reed, D-R.I., and Susan Collins, R-Maine, are expected to offer a floor amendment to the stimulus bill this week seeking another $1 billion for LIHEAP.

The fiscal 2009 Energy Department budget request would double the capacity of the Strategic Petroleum Reserve to 1.5 billion barrels despite Democrats' push to use some of the reserve to increase domestic supply and stabilize gas prices. Senate Energy and Natural Resources Chairman Jeff Bingaman, D-N.M., issued a statement saying he will hold a hearing this month "to examine the rationale and effects of the government competing with refineries for the highest quality crude oil."

Energy Secretary Samuel Bodman Monday said the overall budgetary goals of the department "remain largely unchanged" from past years. The department's research in the physical sciences would get a boost of $4.7 billion, or 19 percent. The department is seeking $1.4 billion-a $386 million increase-for the nuclear energy office and $494.7 million-a $108 million raise-for the oft-delayed and embattled Yucca Mountain nuclear waste repository in Nevada. The administration wants $648 million for the Energy Department's advanced coal technology research, development and demonstration program, which is 25 percent more than Bush requested for fiscal 2008. For the second year in a row, the administration is proposing to eliminate funding for oil and natural gas research and development, which Congress provided $23 million for this year from the general revenue and $50 million from offshore production royalties. Bingaman said the administration's proposed cuts are "short sighted." The administration is not assuming revenue next year from a 54-cent U.S. tariff on imported ethanol that expires this year, though a Senate-passed farm bill extends the tariff another two years.

-Darren Goode

Environmental Protection Agency

The Bush administration is proposing a $7 billion budget for the Environmental Protection Agency in fiscal 2009, a reduction of about $400 million, or 5 percent, from the fiscal 2008 budget and $600 million less than what the agency actually received from Congress in fiscal 2007. Many of the reductions-$143 million-were represented by cuts or terminations of so-called earmark projects that the budget document said were added by Congress. Much of the rest came from reductions in grants to states and Indian tribes, continuing the EPA's trend of having local governments shoulder more of the burden for environmental issues. The funding for grants went from approximately $2.9 million in fiscal 2008 to $2.6 million in fiscal 2009. Cuts in clean water programs also were included in the EPA budget proposal, including $34 million reduction in the Leaking Underground Storage Tank Trust Fund from fiscal 2008.

The EPA continued its emphasis on homeland security programs, increasing them about $4 million from fiscal 2008 levels. Those programs include $102 million for decontamination research and $10 million to increase lab capacity, which Congress has criticized. The popular Superfund program stays essentially stagnant at $1.3 billion, but appears to be a cut when taking inflation into account. However, OMB said the funds would be enough to clean up the nation's "most contaminated" hazardous waste sites. The budget dedicates $166 million to assess more than 1,000 contaminated "brownfields" properties and to make some of them ready for development.

-Elaine S. Povich

Federal Communications Commission

The White House proposed Monday that the Federal Communications Commission receive $338 million in fiscal 2009, a $25 million increase over the $313 million the agency secured from Congress in fiscal 2008. That appropriations matched the amount the Bush administration had recommended in its last budget. "The requested fiscal 2009 funding level would provide funding to conduct an outreach campaign to educate consumers about the impact and benefits of the transition to digital television," the FCC emphasized in a statement. The switch to digital signals will occur Feb. 17, 2009.

The agency listed several other initiatives that would benefit from increased funding, including efforts to improve interoperable communications for emergency first responders. The budget request notes that the administration supports efforts to overhaul the multibillion-dollar universal service fund, including "reverse auctions" that award funding to carriers agreeing to receive the smallest subsidies. The agency is considering this and other modifications to the program, which aims to make phone service more affordable in rural and low-income areas. But the White House said it "strongly opposes" efforts to exclude the fund from the Anti-Deficiency Act, along with other steps that might limit the FCC's ability to implement changes. Rural lawmakers, including Sens. Ted Stevens, R-Alaska, and John (Jay) Rockefeller, D-W.Va., support exempting the program from the act, which bars federal agencies from spending unbudgeted funds without prior congressional approval. "These provisions unnecessarily increase the risk of financial mismanagement of the fund and limit reforms" that could improve the program and benefit ratepayers, the budget warns. The administration said it remains committed to strengthening the financial management of the USF and reducing waste, fraud and abuse.

Separately, the White House proposed legislation to give the FCC the authority to phase-in user fees for license holders of available spectrum. A source said the charges would be aimed at television broadcasters but also could affect other services. "Fee collections are estimated to begin in 2008 and total $4.1 billion through 2018," the budget request says. But the administration's previous requests did not result in new payments.

-David Hatch

Food and Drug Administration

An increase of $42 million for the Food and Drug Administration's efforts to protect the nation's food supply was requested in Bush's new budget, with most of the increase, $32 million, to go directly to FDA's food safety center to boost its budget to $538 million. The money will help the agency implement its food protection plan and the Health and Human Services Department's import plan, both of which were released in November minus funding proposals. Congress immediately criticized FDA and HHS for skirting the money issue and has since tried to get FDA to reveal how much money the agency needs to fill gaps in its food oversight efforts made evident through a string of high-profile and sometimes deadly recalls in the last year and a half. FDA particularly wants to increase its presence at food production and handling facilities and increase food testing. FDA also plans to open an office in China, the country responsible for many recent contaminated food problems. FDA officials also said they are working on legislative language to approve generic versions of biologic drugs.

-Anna Edney

Health and Human Services Department

Health and Human Services Department officials are proposing a 0.4 percent automatic pay cut to Medicare health providers every year that the total federal outlays in the program exceed 45 percent of general revenue. Medicare spending has exceeded that threshold over the past two years, according to program trustees. Reductions in health provider payment rates and regulatory changes under Medicare are expected to raise $183 billion over five years, with $64 billion coming solely from cuts to hospitals. Senate Finance Chairman Max Baucus, D-Mt., said the proposed Medicare cuts are "dead on arrival" on Capitol Hill. HHS is proposing roughly $18 billion in Medicaid cuts and a host of legislative proposals that have not fared well in Congress. On the legislative front, increased health premiums for higher-income seniors may be the least popular among Democrats of the administration's ideas. HHS is proposing to eliminate the tax-free status of employer-sponsored health insurance, allow employers and community groups to band together across state lines in association health plans, and ease medical liability law.

The administration would add almost $20 billion to the State Children's Health Insurance Program, which is on par with the recent SCHIP extension signed into law last year. The proposed SCHIP allotment includes $450 million for outreach to find eligible enrollees. The administration also is seeking legislation that would cap eligibility for SCHIP at 250 percent of the federal poverty level. HHS officials said Monday that the income determination would be made based on "gross income." SCHIP recipients who are currently above 250 percent of poverty would continue to receive those benefits until the state waivers allowing that coverage expire.

-Fawn Johnson

Homeland Security

Housing and Urban Development Department

The Housing and Urban Development Department is slated to receive a 2.8 percent increase in discretionary spending under the Bush administration's fiscal 2009 budget, although the proposal is balanced by $1.6 billion in cuts that are likely to be ignored by Congress. The budget proposes a total of $38.5 billion in discretionary spending that would continue a small uptick trend in funding as in previous years.

The administration has proposed a $263 million increase for the HOME Investment Partnership Program, which provides formula grants to states and cities to buy, build, or rehabilitate affordable housing units. Within the HOME program, the administration calls for $50 million-a fourfold increase-for its American Dream Down Payment Program, which provides funding to certain low-income households for down payment and closing costs. Homeless assistance grants also are slated to increase 5 percent to $1.6 billion, while tenant-based rental assistance via vouchers that pay for rent will increase 2 percent to $16 billion.

The spending increases were offset by the proposed termination of four programs -including one $100 million program that rehabilitates public housing units -and a $900 million reduction in the Community Development Block Grant program. The administration has repeatedly targeted the CDBG program, arguing that it needs to be revamped because its funds are not spent for the neediest communities and it has not produced any demonstrable results. Each year, Congress essentially blows off the budget request and increases funding. For example, the program increased from $3.77 billion in fiscal 2007 to $3.87 billion in fiscal 2008.

-Bill Swindell

Interior

The Interior Department budget asks for $10.5 billion, a cut of $832 million from last year, with increases for fighting and preventing wildfires and guarding national monuments. The Wildland Fire program would get $850 million, a substantial increase over the $809 million budgeted the previous year. The U.S. Park Police, criticized for lax security at national monuments by the department's inspector general, would get an 8 percent increase to $94 million. All other major program spending proposals are decreased from last year's request, notably the Fish and Wildlife Service, the Office of Surface Mining, the Bureau of Indian Affairs and the U.S. Geological Survey.

The Interior budget would expand domestic energy production by encouraging more exploration and studying potential new areas for offshore drilling. The fiscal 2009 budget reflects an increase in the royalty rate to 18.75 percent for oil and gas drilling leases in the Gulf of Mexico up for sale next month. The president asked for $25 million in additional start-up funds for the National Parks Centennial Initiative. The department says the initiative could bring up to $2 billion in donations and government matches to spruce up and expand parks by 2016, the system's 100th anniversary. Under the President's Migratory Bird Initiative, the department will prepare a "State of the Birds" report, listing the status of all birds and identifying species in need of greater protection. In addition, the department requests $8 million for a "census" of aquifers, reservoirs, surface and groundwater flow, water quality and water use.

-Ira Allen

Justice

The Justice Department would face a cut of more than 10 percent in President Bush's fiscal 2009 budget, reducing funding to programs aimed at helping local police but proposing new spending for border security and the Federal Bureau of Investigation. The White House requests cutting Justice's budget to $20.3 billion from the estimated $22.7 billion for fiscal 2008. In a news conference Monday, however, Justice Department officials noted their budget contains more than $2 billion in scorekeeping offsets which they said made a slight budget decrease appear much larger.

As in recent years, the administration wants to slash funding for the Community Oriented Policing Services program, which will receive more than $500 million in fiscal 2008. That cut is part of a plan to combine more than 70 state and local law enforcement assistance initiatives into four programs and in the process trim about $2 billion total from COPS and other programs intended to help local police target issues like violence against women. "This will eliminate earmarks and formulas and improve the ability of states, localities and tribes to respond to increases in violent crime by better targeting funds," a department budget summary says. But the proposal is unlikely to gain traction in Congress. Appropriators have previously ignored similar plans, rejecting a 94 percent proposed cut to COPS last year.

Justice, meanwhile, is seeking increases to homeland security and anti-terrorism initiatives. Attorney General Michael Mukasey last week proposed $100 million in new funds for the Southwest Border Initiative, a multi-agency program targeting Mexican trafficking groups. The increase would fund 265 new positions at the Drug Enforcement Agency, the U.S. Marshals Service and other agencies. The president's proposal would also boost the FBI's budget to $7.1 billion from the estimated $6.5 billion in fiscal 2008. Much of that increase -$362 million- would go to anti-terror programs for surveillance technology and cybersecurity.

-Dan Friedman

Labor

The White House is seeking to slash $900 million from the Labor Department's budget by cutting duplicative programs and again proposing to tighten unemployment insurance oversight. The Labor Department's fiscal 2009 budget request of $10.5 billion relies on a legislative proposal to reduce improper unemployment insurance payments by $3.6 billion and recover $200 million in delinquent taxes over 10 years. Some senators are pushing to extend unemployment benefits as part of the economic stimulus plan under consideration. The budget seeks to get rid of or cut $1.4 billion in programs that duplicate other efforts, such as Employment Service State Grants, the Office of Disability Employment's grant program and the Migrant and Seasonal Farmworkers program.

After asking for an increase of about 13 percent for the Mine Safety and Health Administration in fiscal 2008 following a rash of deaths in the mining industry, the president is looking to reduce the mine safety office's budget in fiscal 2009 by $2 million to $332 million. According to the Labor Department's budget document, funding is mostly flat, but $11 million for coal inspectors who were hired over the last two years has been allocated to enforcement activities and increases in salaries, benefits and rent. The administration will attempt again to overhaul states' job training programs. It proposes to create career advancement accounts that would direct states to spend federal funds on modernizing job training for new workers and those who lost their jobs or want to change careers. This year, the administration proposed requiring a 20 percent match from states for the career advancement accounts. The accounts would be as high as $6,000 over two years per worker. Businesses would see their pension insurance premiums rise under a repeated administration request to avoid any future taxpayer bailouts. The president requested last year that businesses underfunding their pension plans be required to pay higher premiums to help fill the $19 billion gap between the Pension Benefits Guaranty Corporation's liabilities and assets.

-Anna Edney

National Aeronautics and Space Administration

President Bush proposed a $17.6 billion fiscal 2009 budget for National Aeronautics and Space Administration, which would provide increases for space operations and exploration to support an ambitious schedule of space shuttle launches to complete the International Space Station and efforts to develop a replacement for the shuttles. The proposal, however, also makes cuts in several programs popular with Congress. The budget seeks $3 billion for continued development of the Orion crew exploration vehicle and the Ares I rocket system, which are to replace the space shuttles after their planned 2010 retirement. But Deputy NASA Administrator Shana Dale said the new system would not be ready until 2015, even if NASA receives full funding. The just under $3 billion requested for shuttle operations is down from the current year's funding, even though NASA wants five shuttle flights compared with three last year.

The budget request of $3.5 billion for exploration programs includes $1.4 billion for unmanned exploration of Mars, the moon and elsewhere in the solar system. And the $5.8 billion for space operations covers $2.1 billion for the U.S. share of space station operations and $173 million for demonstrations of commercial capabilities to service the ISS after the shuttles. The request of $4.4 billion for science, $447 million for aeronautics and $115.6 million for education would cut programs highly popular in Congress. But Dale said the budget actually increases spending for the earth science efforts that Congress has pushed and the aeronautic funding fully supports the effort to develop the urgently needed next generation air traffic control system.

-Otto Kreisher

National Telecommunications and Information Administration

The National Telecommunications and Information Administration in the Commerce Department would receive $19.2 million in fiscal 2009 under President Bush's new budget proposal. A spokesman said the agency would comment on the request later this week. The amount is $1.7 million more than the $17.5 million Congress appropriated for fiscal 2008, which matched the White House request for this year. The agency is playing a key role in shepherding the nation's transition to digital television in early 2009. It has been tasked with overseeing a $1.5 billion coupon program that will issue $40 vouchers toward the purchase of converter boxes that owners of analog TV sets with over-the-air reception will need to operate after Feb. 17, 2009. The agency primarily serves as the White House's main adviser on domestic and international telecom policy matters. The budget notes that NTIA's Public Telecommunications Facilities Program tentatively plans to cease awarding grants in early 2009. "Since 2000, almost 70 percent of PTFP awards have supported public television stations' conversion to digital broadcasting, and mandated conversion efforts are now largely completed," the document states. It adds that additional DTV conversion funding is available from other sources. NTIA also provides grants in conjunction with the Homeland Security Department to assist public safety agencies in their efforts to adopt interoperable communications systems. Other priorities include financial assistance to eligible low-power television stations, which mostly serve rural areas, and improving "enhanced 911" emergency services that work with Internet-based telephone providers. -David Hatch

Patent and Trademark Office

The Patent and Trademark Office would receive about $2 billion in fiscal 2009 under the budget plan President Bush released Monday. That's a slight bump from the $1.9 billion approved by Congress for fiscal 2008. This is the fifth consecutive year that the Bush administration has recommended that Congress allow the agency to keep fees collected from patent and trademark applications. Fee diversion has sparked the interest of lawmakers wrangling with legislation that would overhaul the U.S. patent system. The House passed its patent overhaul bill in September and the Senate is expected to bring its bill to the floor this month. Sen. Tom Coburn, R-Okla., offered an amendment that would permanently end the offsetting. According to Bush's request, the money would boost the number of patent and trademark examiners tasked with handling the growing workload, help the agency retain its workforce, and improve patent and trademark enforcement practices worldwide. The PTO's backlog is roughly 760,000 applications and the agency received 467,000 applications in fiscal 2007-almost double the number of applications filed a decade ago. PTO Director Jon Dudas said the request will support his agency's five-year strategic plan to "optimize patent and trademark quality and timeliness, improving intellectual property both domestically and abroad, and achieving organizational excellence." The 2009 proposal eliminates a $1 million set-aside granted the previous year for the multiagency National Intellectual Property Law Enforcement Coordination Council, whose success has been questioned on Capitol Hill and by the Government Accountability Office. A bill introduced last year by Sens. Evan Bayh, D-Ind., and George Voinovich, R-Ohio, and companion legislation in the House would phase out the council and expand on the idea by creating a body with agency representation at higher levels of authority.

-Andrew Noyes

Science and Technology

President Bush's plan to double research and development funding at key science agencies over a decade inched forward Monday with his budget request for fiscal 2009. He asked for $12.2 billion, an overall increase of 15 percent for the Energy Department's Office of Science, the National Science Foundation, and the National Institute of Standards and Technology. Under the proposal, Energy's science programs would get $4.7 billion, which is a $300 million increase over the fiscal 2008 request; NSF's budget would climb $425 million, to $6.85 billion; and NIST would get a $40 million bump to $634 million for its core research missions. White House Office of Science and Technology Policy Director John Marburger told reporters that Bush's total federal R&D budget is $147 billion, an increase of $3.9 billion over fiscal 2008. Non-defense outlays are "modest" but "more than adequate" to meet the needs of the agencies involved, he said.

The proposal also includes $1.7 billion for basic research at the Defense Department, $270 million more than requested for 2008, as well as $3.2 billion for Bush's advanced energy initiative-a 25 percent increase over the fiscal 2008 amount. Said Marburger, "The continued erosion of the physical science budget really is a serious problem"-as are forthcoming rounds of layoffs at national research laboratories, which are anticipated to begin this month. House Science and Technology Chairman Bart Gordon, D-Tenn., said the R&D budget proposal is "an incomplete and short-sighted plan to promote U.S. competitiveness." While the request does increase research funding, it does not make education a priority, Gordon said. Association of American Universities President Robert Berdahl called the budget request a mixed bag for U.S. research universities. He lauded the science program increases but said it was disturbing that the proposal flat-lined funding for the National Institutes of Health at $29.3 billion.

-Andrew Noyes

Securities and Exchange Commission

The Securities and Exchange Commission would receive a 1 percent increase in fiscal 2009 under President Bush's budget proposal, providing $913 million to the agency in the midst of investigations into the subprime mortgage crisis. The modest increase comes after appropriators allocated a 3 percent increase in fiscal 2008 to the agency that oversees the trading of public companies. About two-thirds of the agency's budget is for personnel. Under the budget proposal, the SEC's enforcement division would get $3 million in new funding-a 1 percent increase- and the compliance inspections and examinations division would get an additional $1 million, a 0.05 percent increase. The number of full-time personnel would drop 3 percent to 3,473. SEC officials cautioned the projected decrease is not that unusual given the rate of attrition at the agency. The decrease would come at a time when it has approximately 3,000 open investigations into problems in the subprime mortgage market, where many predatory loans were gobbled up by investment firms, bundled and resold as mortgage-backed securities. "We do think this is sufficient funding to fulfill the mission of the SEC," said Diego Ruiz, the agency's executive director. The SEC did create seven positions last year to implement a law that loosened the standards over how a credit-rating agency could be "nationally recognized" under SEC designation, Ruiz said. He said that staffing is currently sufficient for that task. The agencies have come under stinging criticism from lawmakers for not sufficiently forecasting the credit risk of many mortgage-backed securities, which were later greatly devalued when their borrowers went into foreclosure.

-Bill Swindell

Small Business Administration

The Small Business Administration is presenting a hold-the-line fiscal 2009 loan guarantee budget with a cap of $28 billion for small businesses- roughly the same maximum as in the fiscal 2008 budget. But SBA Administrator Steven Preston said he expected only about $20 billion in actual loans in fiscal 2008 when the year is completed, similar to the amount in fiscal 2007. Most of the $28 billion cap is $17.5 billion in the SBA's flagship 7(a) guaranteed loan program that assists small businesses in working capital and other expenses. That basic SBA program guarantees loans from participating banks that lend the money to small firms. Another $7.5 billion is through the section 504 guaranteed loan program that backs private development companies offering long-term loans for business property and machinery.

The agency is asking for $657 million in new budget authority for operating the SBA, a 6 percent increase over fiscal 2008, and has budgeted about $1 billion for disaster relief. "This is a fiscally responsible budget proposal which supports SBA's mission to foster small business growth and assist home and business owners affected by a major disaster," Preston said. Once again, although rebuffed by Congress, the Bush administration is advocating ending the federal subsidy for microloans-under $35,000 -to start up the smallest businesses. Senate Small Business Chairman John Kerry, D-Mass., commented: "Unfortunately this budget is more of the same from the Bush administration for America's 27 million small businesses. The Bush budget fails to provide critical investment to finance start-ups and grow existing businesses."

-Michael Posner

Transportation

The White House's fiscal 2009 budget would cut overall discretionary funding for the Transportation Department from this year's projected $69.2 billion to $63.4 billion while boosting allocations for some key Federal Aviation Administration air traffic control programs. The spending plan calls for hiring 306 air traffic controllers at a cost of $11.3 million and for nearly tripling-to $688 billion -funding for the plan to modernize the air traffic control system over the next 15 years from a ground-based to a satellite-based network with greater capability for reducing airport congestion and flight delays.

Meanwhile, to guarantee sufficient funding to finish the $15 billion Next Generation project, the budget -for the second year -calls for scrapping the 7.5-percent passenger ticket tax and replacing it with a "market-based" aviation financing system of user fees. The switch is favored by the airlines, which ante up 90 percent of the contributions to the Aviation Trust Fund through the ticket tax, and opposed by owners of corporate jets, who now pay only the jet fuel tax.

The budget also calls once again for slashing funding for Amtrak to force it to jettison money-losing long distance lines. Under the spending plan, the federal passenger railroad's funding would drop $455 million to $900 million, $100 million of which would be earmarked for subsidizing state efforts to take over inter-city rail passenger routes. "Amtrak needs to continue to reform and make strong business decisions," Transportation Secretary Mary Peters told reporters in a conference call. In other cuts, the budget plan would slash funding for the federal bridge rehabilitation program from this year's $ 5.2 billion to $4.5 billion. The fiscal 2008 figure included $1 billion added by Congress after last summer's disastrous bridge collapse in Minneapolis. Peters said she believed the $4.5 billion would be enough to "meet critical needs" as the states proceed with their inventories of bridges to determine which are in need of repair.

-Terry Kivlan