Agency Budget Roundup

February 6, 1997

Agriculture: Agriculture Secretary Glickman today announced a USDA budget of $58.8 billion in outlays, including $26 billion for the food stamp program, $5.7 billion in Freedom to Farm payments -- down from $6.35 billion in 1997 -- and $15.2 billion in discretionary spending. Glickman said he would ask Congress to impose $390 million in user fees on the livestock and poultry industries for new food safety inspection programs. The budget also increases money for farmers' risk management programs, and a USDA official said he hoped new insurance products combining price and yield risk would be used on as many as 40 million acres. The budget also increases funding to $4.1 billion for the Women, Infants and Children (WIC) program and, as part of the administration's plan to "fix" welfare reform, the administration will ask for legislative changes so people who are not working can have access to food stamps six out of 12 months rather than three out of 36 months under current law. The budget provides $90 million for the Market Access Program, unchanged from the current fiscal year, but increases the Export Enhancement Program by $400 million to $500 million and also increases the Dairy Export Incentive Program.

Education: In addition to President Clinton's already announced plans to spend more on literacy programs, charter schools, Pell Grants and tax breaks for postsecondary education, the administration today proposed recalling $2.5 billion in reserves from federal student loan guarantee agencies. The proposal -- tucked deep into the budget proposal and not announced by Education Secretary Riley at his press conference today -- would clarify that the federal government is the sole insurer of student loans, paying 100 percent of each eligible lender's default claim. As a result, "guarantee agencies would no longer need to hold federal funds in reserve. Therefore, the administration proposes to recall some $2.5 billion in unneeded reserve funds over the next five years," the Education Department budget says. An Education Department official said afterward the funds could be recalled administratively, but that "we want to do this with congressional concurrence. It will bring a lot of money back into the federal budget."

Energy: The Energy Department is requesting $19.2 billion in FY98, $2.7 billion over last year's level and nearly equal to the $19.3 billion the agency received in FY93. Of the $2.7 billion increase over FY97, nearly all of it, $2.3 billion, will support a change in how construction projects are financed and the expansion of a privatization pilot project launched last year. Beginning in FY98, the DOE will begin requiring full up-front costs for construction projects, as most other federal agencies do, rather than requesting the monies incrementally each year as it currently does. The other part of the $2.3 billion increase will support the environmental management privatization project initiated by the last Congress. Of the remaining $400 million increase in the agency's proposed budget, the biggest chunk, $200 million, will support energy efficiency and renewable energy research.

EPA: EPA Administrator Browner today released the administration's FY98 request for the EPA, which calls for an $846 million increase to $7.6 billion. A $700 million jump for the Superfund program accounts for most of the increase. Browner said the increase would allow the EPA to double the pace of Superfund cleanups and complete cleanup at 500 more sites by the year 2000. The budget includes a $35 million increase for efforts to inform citizens about toxic pollution in their communities and a $36 million increase for implementation of the Food Safety Act and the Safe Drinking Water Act amendments passed last year. The budget calls for a $158 million cut in funding for water infrastructure projects, including a cut in funding for drinking water treatment projects from $1.3 billion to $725 million. Browner said the current year drinking water infrastructure appropriation also provides funding revoked in FY96. The request for sewage treatment projects represents a $100 million cut in funding, but the EPA said that will not significantly affect the amount of money available to states from revolving loan funds.

HHS: The administration's FY98 budget not only kept the White House's vow to trim Medicare payments to providers while sparing beneficiaries; it actually proposes several benefit increases. They include a new "respite care" program for those caring for Alzheimer's patients; a bipartisanly backed package of preventive services, including colorectal cancer screening; diabetes management; and annual instead of the current biennial mammograms for women. The budget also includes a proposal guaranteeing that Medicare beneficiaries who try managed care plans and decide to return to traditional Medicare can repurchase their supplemental "Medigap" insurance, a provision rejected by Republicans in 1995. Also, President Clinton's vow in his State of the Union address that his new children's health plan would cover half of the 10 million uninsured children includes one million children now scheduled to be covered by Medicaid expansions enacted in 1990.

Transportation: Spending on highways would fall slightly and funding for mass transit would increase under President Clinton's FY98 transportation budget released today. The administration proposed $18.17 billion for the highway program, down from $18.19 billion in FY97. The proposal also includes a $318 million supplemental request for FY97 to distribute to states that received lower than expected funds due to a Treasury Department accounting error with the Highway Trust Fund. The administration also proposes to fund Amtrak out of the Highway Trust Fund -- $344 million for operating assistance and $423 million for capital investment. Mass transit spending in FY98 would be $4.2 billion, a $390 million increase. Funding for the Congestion Mitigation and Air Quality Improvement Program would rise 30 percent. For aviation, the administration proposes to increase air traffic control spending by 8.7 percent, including the hiring of 500 air traffic controllers. The plan would cut funding for airport construction grants by $1 billion.


February 6, 1997

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