ANALYSIS OF THE PRESIDENT’S FY2006 BUDGET REQUEST

Feb 1, 2005 | 14 min read | Print Article

February 2005

#10 – Advanced Technology Program

FY06 Budget Resources

(Administration Introduces the “Budget of the Living Dead”)

The administration is proposing for the third year in a row to terminate the Advanced Technology Program. This is despite Congress’s history of restoring the funding every year. The Advanced Technology Program (ATP) is one of the worst examples of corporate welfare in the federal budget.

ATP funds corporate research and development grants that would easily survive without government support. The bipartisan Congressional Budget Office (CBO) found that almost half of ATP grant winners “continued their research and development projects despite a lack of ATP funding.” Likewise, a Government Accountability Office (GAO) report found that three completed ATP projects duplicated private sector research.

While approximately 90% of U.S. companies do not receive assistance from the federal government, many corporate welfare recipients are mega corporations. ATP grant recipients include market leaders such as General Electric, Xerox, and Dupont.

Conference Language from Congress’ spending bills:

FY 2005 – $142,300,000

Advanced Technology Program.-The conference agreement

provides an appropriation of $142,300,000 for the Advanced Technology

Program (ATP), instead of $203,000,000 as proposed by the

Senate and no funding as proposed by the House. The conference

agreement does not adopt bill language providing specific funding

for new awards as proposed by the Senate.

FY 2004 – $179,175,000

The conference agreement includes $179,175,000 for the Advanced

Technology Program, instead of $259,600,000 as proposed

by the Senate and no funding as proposed by the House. The conference

agreement does not include a $50,000,000 new program as

proposed by the Senate for ATP focused competitions on homeland

security technologies. The conferees agree that a focused competition

on homeland security technologies should be held out of the

$60,700,000 provided for new awards.

FY 2003 – $180,000,000

Advanced Technology Program-The conference agreement includes

$180,000,000 for the program, of which $60,700,000 is for

new awards. This amount, when combined with approximately

$34,000,000 in prior year funds, provides ATP awards at the fiscal

year 2002 level. Within the amounts made available, $45,000,000

shall be used for administrative costs, internal laboratory support,

and for Small Business Innovation Research Program requirements.

FY 2002-$217,600,000

Advanced Technology Program.-The conference agreement includes

$184,500,000 for the Advanced Technology Program (ATP),

instead of $12,992,000 as proposed in the House bill and

$204,200,000 as proposed in the Senate bill. The amount of carryover

funding available from fiscal year 2001 is $33,100,000, providing

total available funding for ATP of $217,600,000 for fiscal

year 2002. The conference agreement includes bill language, modified

from the Senate language, designating $60,700,000 for new ATP

awards.

#9 – Nuclear Subsidies

The President’s FY 2006 budget contains $510.8 million in funding for nuclear energy science and technology spending, an increase of 5.1% from the year before. The president’s nuclear energy budget includes $191 million in funding for research and development, a $20.4 million dollar increase from 2005 and a $191 million increase from 1998, when the federal government spent no money at all on nuclear R&D.

The President’s budget also proposes $56 million (a 13% increase) for Nuclear Power 2010, a program to make the federal government bear part of the cost of new nuclear power plant development. The Nuclear Power 2010 program is a double-whammy on the taxpayers’ pocketbook – it not only wastes tax dollars now, but it will force taxpayers to fork over millions dollars down the line, when the additional nuclear plants are built and the government inevitably finds out that the plants are too expensive for the private sector to maintain without further federal assistance.

#8 – Alaska Railroad Rehabilitation

It appears that President Bush and Senator Ted Stevens (R-AK) are hooked up in a serious budgetary tango, and the Senator from Alaska is the one taking the lead. Every year since fiscal year (FY) 2002, President Bush has zeroed out the budget for Alaska Railroad Rehabilitation. And like clockwork, Sen. Stevens puts it right back in when the Congressional appropriations process rolls around. President Bush doesn’t mind playing second in this dance, though, because it allows him to look like a good fiscal conservative cutting out a wasteful program. But year after year, it shows up again in the final spending bill Congress submits to him to sign into law. It seems about time that the President either put his foot down and tell the Senator that the dance is over, or include the program in his yearly budget. To do otherwise creates a Presidential budget that does not reflect the items that administration knows taxpayers will be paying for when the final spending bill is approved.

Year

Pres. Budget

Congressional Auth.

FY2002

$20,000,000

FY2003

$20,000,000

FY2004

$25,000,000

FY2005

$25,000,000

FY2006

???

#7 – Trojan Horse Budgeting at Amtrak

In the fiscal year 2006 budget, released today by the President, one program that is slated for elimination is Amtrak, the subsidized company that operates the nation’s long-distance rail travel. The administration’s take is that it will not provide funding until Amtrak is overhauled. This goal is laudable, but not a realistic one for budgeting purposes. Despite the administration’s low-ball budget estimates for Amtrak in the past, Congress has consistently approved higher funding amounts. This is a budgetary Trojan Horse-the President wheels it past taxpayers doors, while Congress lurks inside waiting to tack on a billion dollars or more during appropriations. This tactic helps make the President’s budget look better, but it’s an irresponsible budgeting trick. If the President is serious about pushing Amtrak reform, he needs to stand up to Congress and push them to take action. Otherwise, the budget should include the Amtrak amount, since it’s a near certainty Congress will reauthorize the program.

Social Security’s Solvency Crisis

Year

Pres. Budget

Congressional Auth.

FY2002

$521,000,000

$726,476,000*

FY2003

$521,000,000

$1,050,000,000

FY2004

$900,000,000

$1,225,000,000

FY2005

$900,000,000

$1,217,000,000

FY2006

$360,000,000**

???

* Includes $205 million provided in a mid-year supplemental

** Includes no funding for operating expenses. Would only fund commuter and freight service along the Northeast Corridor and elsewhere.

Keep Clean Energy Tax Credits Clean

#6 – Beach Blanket Budgeting

The President’s FY 2006 budget continues the administration’s fight to reform the nation’s beach replacement program. Following on the FY 2005 initiative, the President only provides funding to beach projects where required by court order (FY05 proposal) or where a federal navigation project directly causes erosion on a neighboring shoreline (FY06 proposal). This funding would come from the Harbor Maintenance Trust Fund. Additionally, the FY06 proposal continues the administration’s policy that no funding should be provided for repeated renourishments on beachs, only for initial construction.

We applaud the President’s proposal, but it remains to be seen whether the administration will back up its bark with even a little bit of bite. Last year, the House and Senate ignored the administration’s proposal and spent $100,001,000 on beach projects.

The President’s proposals on beach replacement have taken a common sense approach – let those who benefit the most from projects pay the most for them. But common sense rarely wins out by itself, you have to fight for it.

#5 – Reforming Power Marketing Administrations

The President’s budget includes a proposal affecting accounting at Power Marketing Administrations (PMAs) such as the Bonneville Power Administration (BPA). Third party financing such as lease-purchase agreements that BPA has been pursuing will count toward’s BPA’s debt limit. No more Enron accounting for them. This would be a huge step forward for taxpayers as Bonneville currently owes the federal Treasury nearly $7 billion and TCS has long advocated for them to look into third party financing options.

Also, the budget includes a provision for all PMA’s which requires they move towards market-based rates. Taxpayers for Common Sense (TCS), the Government Accountability Office and earlier Office of Management and Budget documents all pointed toward this as an important reform. The 2006 budget highlights the General Accountability Office’s conclusion that, “PMA rates are artificially low because taxpayers across the Nation have borne some of the PMAs’ costs. Thus, the general taxpayer has helped subsidize the cost of PMA power purchased by electricity wholesalers.” We believe this movement to end artificially low rates would alleviate the burden taxpayers have shouldered for decades.

According to 2006 Budget summary tables, this proposal is expected raise $3.194 billion between 2006 and 2010.

Read more about the PMA market rates…

#4 – Are the 150 program cuts or eliminations a big deal?

Despite new found religion on budget deficits, the administration’s proposed spending cuts are only a small increase over the 2005 budget request. Last year, the administration’s FY 2005 budget proposed cutting 128 programs; 65 of which would have been eliminated for a total savings of $4.9 billion. Spending reductions were sought in 63 others. This would have reduced spending in 7 of the government’s 16 departments.

#3 – Just Say Veto

Any controversial budget cut is dead on arrival when it gets to Congress if not backed up by a threat of veto. Read TCS’s latest WasteBasket to learn more about the power of the Veto. More (Just Say Veto)

#2 – Administration revives, hides funding for Nuclear Budget Buster

Sources on the hill have informed us that the President’s budget inserts $4 million for the Robust Nuclear Bunker Buster (RNEP) program (Cut Funding for the Nuclear Bunker Buster: Support the Kennedy-Feinstein Amendment to S. 2400), despite Congress’s repeated attempts to cancel the program entirely. In addition, another $4.5 million for the Bunker Buster has been moved to the Department of Defense budget.

The Department of Energy is trying to conceal the true cost of this program by splitting it in half and tucking part of it into the DOD budget, but don’t be fooled. Before Congress cut the program out entirely, RNEP was scheduled to cost $500 million over 5 years. Representative Hobson (R-OH) correctly identified the program as a waste and a drain on important defense priorities and eliminated it from the Energy and Water appropriations bill for 2005. The National Nuclear Security Administration, which oversees the program, doesn’t seem to be getting the message: this weapon would not be substantially more effective than current bunker busters, and should not be receiving funding while we are in the middle of a war where the Pentagon has to pinch pennies just to fund troops on the ground.

#1 Transportation

Preliminary analysis of the President’s Fiscal Year 2006 budget indicates that the administration has reversed course and will now support a much larger reauthorization amount for the renewal of transportation legislation. After spending the last year touting a funding level of $256 billion-a number justified by the amount of gas tax revenues the federal government collects-the presidents FY06 budget calls for a six-year reauthorization level of $283 billion. This departure moves us closer to final passage of the current highway bill that is paved with pork.

From the DOT budget document

“For 2005, grants for highway construction, public transit, and highway safety programs-the Department’s largest program-must be reauthorized by the Congress. The reauthorization will define federal highway policy, and also set funding levels for upcoming projects. The Budget updates the Administration’s proposed reauthorization legislation-Safe, Accountable, Flexible, and Efficient, Transportation Equity Act (SAFETEA)-by supporting reauthorization at a level of $283.9 billion through 2009.