WASHINGTON (AP) — President Barack Obama has proposed a $3.8 trillion budget for fiscal 2014 that aims to slash the deficit by $1.8 trillion over 10 years, raise taxes on the wealthy and trim popular benefit programs including Social Security and Medicare. The numbers do not reflect automatic annual spending cuts of 5 percent for domestic agencies and 8 percent for defense. In his 2014 budget, Obama proposes doing away with those cuts.
The agency-by-agency breakdown:
Total Spending: $145.8 billion
Percentage Change from 2013: 5.9 percent decrease
Discretionary Spending: $21.5 billion
Mandatory Spending: $124.4 billion
Highlights: Similar to years past, Obama’s budget proposes savings by cutting farm subsidies. The proposal envisions a $37.8 billion reduction in the deficit by eliminating some subsidies that are paid directly to farmers, reducing government help for crop insurance and streamlining agricultural land conservation programs.
The Obama administration says many of these subsidies can no longer be justified with the value of both crop and livestock production at all-time highs. Farm income is expected to increase 13.6 percent to $128.2 billion in 2013, the highest inflation-adjusted amount in 40 years.
Obama and his Republican predecessor, President George W. Bush, have proposed similar cuts every year and Congress has largely ignored them. There is congressional momentum for eliminating some subsidies paid directly to farmers this year, though, as farm-state lawmakers search for ways to cut agricultural spending and pass a five-year farm bill. There is less appetite among lawmakers to cut crop insurance.
The budget also would overhaul the way American food aid is sent abroad, a move largely anticipated by farm and food aid groups. The United States now donates much of its food aid by shipping food overseas, a process many groups say is inefficient. The budget would transfer the money used to ship the food to cash accounts at the United States Agency for International Development. The administration says that would help two million more people annually and save an estimated $500 million over 10 years. Farm and shipping groups are strongly opposed to the idea.
The bulk of the USDA budget is dollars for the Supplemental Nutrition Assistance Program, or food stamps, which are expected to cost around $80 billion in the 2014 budget year. Costs for the program have more than doubled during Obama’s presidency, driven by an ailing economy and an expansion of the benefit in 2009. Conservatives have called for cutting or overhauling food stamps, but the budget says the Obama administration strongly supports the current program “at a time of continued need.”
Total Spending: $11.7 billion
Percentage Change from 2013: 34.3 percent increase
Discretionary Spending: $8.6 billion
Mandatory Spending: $3.1billion
Highlights: Obama wants to boost investments in research and development and export promotion in hopes of spurring economic growth.
The president is asking for $1 billion to set up a nationwide network of manufacturing innovation institutes to develop cutting-edge technologies to make U.S. manufacturing firms more competitive.
Obama’s budget request also calls for $754 million for the National Institute of Standards and Technologies laboratories aimed at making American manufacturers more competitive in the global marketplace. The money is for promoting advances in areas such as cyber security, manufacturing, communications and disaster resilience.
The president also wants $113 million to create the Investing in Manufacturing Communities Fund. The money would go to projects such as industrial parks and industry academic centers to promote long-term economic growth.
Obama’s budget would also boost funding for the National Oceanic and Atmospheric Administration, including its weather satellite programs.
The president is seeking $21 million for the Advanced Manufacturing Technology Consortia program, which is a public-private partnership aimed at finding answers to manufacturing challenges that U.S. businesses face.
Obama also is requesting $520 million for the International Trade Administration.
Agency: Education Department
Total Spending: $56.7 billion
Percentage Change from 2013: 10.8 percent decrease
Discretionary Spending: $71.2 billion
Mandatory Spending: $0
Highlights: Obama’s proposed education budget calls for expanded programs for young people before they reach kindergarten and offered Congress two options to consider: a $750 million preschool program for 4-year-old students from four-member families earning $47,100 or less; or a more expansive $2 billion option that would provide universal access to pre-school programs for low- and moderate-income families, with incentives for states to offer programs for all families. The proposal requires that up to 5 percent of those funds be used to measure student achievement and collect data.
The president’s preschool plan would be paid for by a higher tax on tobacco, which the administration said would raise $78 billion over a decade by almost doubling the federal tax on cigarettes to $1.95 per pack.
The budget also sets aside $11.8 billion to help local districts keep teachers on staff while the economy returns to pre-recession levels.
Obama’s budget also would move student loan interest rates away from Congress’ control and peg them to market rates. That shift is a nod to concerns that student borrowing is set in a vacuum by politicians and not by the economy. Interest rates on new Stafford student loans were set to double, from 3.4 percent to 6.8 percent, on July 1. Consumer advocates worried that could cost students who take new student loans at the maximum levels some $5,000 over the life of the loan. Obama’s budget would let new borrowers dodge that rate hike for now, but could open students to higher rates if the markets change in the future.
Obama’s budget also includes $1 billion in funds for a college affordability initiative, which would give money to states in exchange for keeping costs down and investing in improving results, similar to the Race to the Top competition the department used to spur innovation in primary and secondary education.
The maximum Pell Grant amount would increase to $5,645 for each student each year and some 112,000 new students would be added to federal work study programs.
While the budget only asks Congress for the $56.7 billion, the Education Department stands to spend closer to $71.2 billion. That difference — $14.5 billion — is the amount the agency collects from student loan interest, fees and other sources, letting the Education Department ask for less than it spends.
Total Spending: $32.5 billion
Percentage Change from 2013: 35.3 percent increase
Discretionary Spending: $28.4 billion
Mandatory Spending: $4.1 billion
Highlights: Obama again would increase spending for two priorities: clean energy and national security. The budget proposal calls for an additional $615 million to increase use of renewable energy such as solar, wind, geothermal and hydropower and spends more than $2.1 billion to modernize the U.S. nuclear weapons stockpile and $5.3 billion to clean up nuclear waste at defense-related sites across the nation, including one in Washington state used to build the atomic bomb.
The budget calls for spending $575 million on cutting-edge vehicle technologies, $282 million to develop new biofuels such as ethanol made from switchgrass or other materials and $200 million for a new Energy Security Trust to expand research into electric cars and biofuels to wean automobiles off gasoline. Obama envisions cars that one day can go coast to coast without using any traditional gasoline. Obama says the trust would use revenues from federal leases on offshore drilling without adding to the deficit.
As he has each year in office, Obama again calls for repealing more than $4 billion per year in tax subsidies to oil, gas and other fossil fuel producers. The budget proposal says the plan eliminates “unwarranted and unnecessary subsidies that impede investment in clean energy sources and undermine efforts to address the threat of climate change.”
The budget slashes funding for a project to turn weapons-grade plutonium into fuels for nuclear reactors and questions the viability of the nearly $8 billion effort. The budget seeks $503 million for the mixed-oxide fuel plant being built at South Carolina’s Savannah River nuclear site — $200 million less than current funding. The plant is part of an international nonproliferation effort, with the United States and Russia committed to disposing of at least 34 metric tons each of weapons-grade plutonium to be turned into commercial nuclear reactor fuel.
The so-called MOX project has undergone years of delays, and the Government Accountability Office says the plant is $3 billion over budget. In its budget request, the administration says it supports the theory behind the project but says it “may be unaffordable.”
The budget also includes $386 million — a $76 million increase over current spending — for the Advanced Research Projects Agency-Energy (ARPA-E), a program that seeks to research on new ways to generate, store and use energy.
Agency: Environmental Protection Agency
Total Spending: $8 billion
Percentage Change from 2013: 9 percent decrease
Discretionary Spending: $8.1 billion
Mandatory Spending: 0
Despite President Barack Obama’s tough talk on addressing global warming, his budget for the agency with the biggest role in reducing the heat-trapping pollution contains few bold moves. In fact, Obama’s fiscal 2014 budget request for the Environmental Protection Agency presents his fourth consecutive cut for the agency, a 9 percent reduction from 2013 levels.
On climate, the EPA will continue on the course it was on during Obama’s first term: pushing for greater fuel savings so the nation uses less oil from cars, trucks and other mobile sources and supporting voluntary programs to boost energy efficiency. There’s no mention of whether the EPA will control the gases blamed for global warming from coal-fired power plants, as it probably will be compelled to do by law. But the budget envisions a role for EPA in preparing communities for the unavoidable impacts of future climate change, by helping them prepare for extreme weather events linked to global warming.
The cleanup program for the nation’s most hazardous waste sites gets a $67 million increase in the budget request, but that is compared to the deep cuts put in place by automatic spending cuts. It means that no new cleanups will start. But there will be enough money to deal with emergency releases from contaminated sites.
States will also see less federal money to help improve infrastructure and treatment plants for drinking water, meaning the focus will be on small, underserved communities.
The budget also suggests that the agency will beef up its regulation of pesticides, by developing methods to better detect and enforce limits for residues on food and by applying health-based standards to the registration of new pesticides.
Agency: Health and Human Services
Total Spending: $949.9 billion
Percentage Change from 2013: 5.4 percent
Discretionary Spending: $78.3 billion
Mandatory Spending: $871.6 billion
Highlights: The rollout of Obama’s health care law next year drives spending increases in the Health and Human Services budget, but the president is also proposing to trim Medicare costs as he tries to draw Republicans into negotiations to reduce government red ink.
Ninety percent of HHS spending is “mandatory,” meaning it goes for benefit programs like Medicare and Medicaid that aren’t subject to routine annual budgeting in Congress.
Under Obama’s health care law, Medicaid spending will rise significantly next year as the program is opened up to low-income people who aren’t currently eligible, mainly adults with no children living at home. Middle-class people who don’t get coverage on the jobs will be eligible for tax credits to help them buy private health insurance, but those costs aren’t reflected in the HHS budget under government accounting practices.
Obama is proposing to cut Medicare spending about $400 billion over 10 years from currently projected levels. In percentage terms, that translates into a single-digit trim for the giant health program that serves seniors and disabled people. The biggest chunk, more than $130 billion, would come from drug company rebates, including a new proposal that speeds up closing Medicare’s prescription drug coverage gap.
Upper middle-class and well-to-do seniors would face higher monthly premiums for outpatient care and prescriptions, an idea that Obama has floated before and that also has Republican support. Newly joining beneficiaries would pay somewhat more for home health care and for outpatient services.
The budget generally holds the line on funding for medical research, with about $31 billion for the National Institutes of Health.
The Centers for Disease Control and Prevention gets a boost from a new $40 million program to more quickly track emerging infections and determine if bugs are resistant to antibiotics. And there’s a new $130 million initiative to expand mental health treatment and prevention, focusing on young people.
Agency: Homeland Security
Total Spending: $45.2 billion
Percentage Change from 2013: 34.8 percent decrease
Discretionary Spending: $44.6 billion
Mandatory Spending: $572 million
Highlights: Obama has proposed broad budget cuts for the Homeland Security Department to be spread over several agencies, including the Secret Service and the Coast Guard.
The proposal includes a reduction of more than $100 million from the Secret Service budget for protection details for presidential candidates and several million dollars for other special security events. Last year the Secret Service was responsible for costly security details for both Obama as he campaigned for a second term and Republican presidential nominee Mitt Romney ahead of the November election. The agency was also responsible for providing security for several other international meetings, including the NATO Summit in Chicago. Obama’s budget also proposes tens of millions of dollars in savings from a technology integration program.
The president has also proposed reducing the Coast Guard’s budget for maritime activities by several hundred million dollars. Coast Guard commandant Adm. Robert J. Papp has said his agency has been prepared to reduce air and marine patrol hours because of previous budget cuts, including mandatory government-wide spending reductions implemented earlier this year. Additional budget cuts, he has said, would mean less time on the water and could result in both more drugs and migrants being smuggled into the United States by sea.
Obama’s budget includes proposed cuts of more than $100 million to the Federal Air Marshal program. The suggested cuts for the program that puts armed agents aboard planes come in the wake of a decision by the Transportation Security Administration to allow small knives and other formerly prohibited items, including miniature replica baseball bats, to be carried on planes. Unions representing flight attendants and some law makers have objected and are asking TSA to reconsider the policy change.
The president has also proposed cuts to DHS’s biodefense activities and the agency’s analysis and operations, which includes the Office of Intelligence and Analysis and the Office of Operations and Coordination and Planning. The proposed cuts for biodefense come amid continuing debate over the future of the National Bio- and Agro-Defense Facility that is currently set to be built in Kansas.
Agency: Housing and Urban Development
Total Spending: $47.2 billion
Percentage Change from 2013: 50.7 percent decrease
Discretionary Spending: $33.1 billion
Mandatory Spending: $14.1 billion
Highlights: The president is asking for $37.4 billion to provide rental housing assistance for 5.4 million families, including new rental vouchers for homeless veterans. HUD’s programs serve primarily the poor, elderly and disabled.
The president’s budget blueprint calls for $2.8 billion for the Community Development Block Grant program, a modest cut. The program got about $3 billion in fiscal year 2013 according to HUD. States and cities use the money to build streets and sidewalks, provide water and build sewers and make other infrastructure improvements in low-income neighborhoods. The program is popular with local officials struggling to balance budgets.
Obama’s budget request would also provide funding for 10,000 new vouchers for homeless veterans.
Obama calls for a slight increase to $950 million for the HOME Investment Partnerships Program that provides grants to states and local communities for things like buying or rehabilitating affordable housing and rental assistance. The program got $948 million for 2013. It is the largest federal block grant program to state and local governments aimed solely at providing affordable housing for the poor.
At the same time, Obama wants to reduce costs in HUD rental assistance programs by simplifying administrative procedures, doing a better job of targeting rental assistance to the working poor and setting more equitable public housing rents.
Obama is seeking $20 billion for the Housing Choice Voucher program to provide rental assistance to 2.2 million poor families, a modest increase. The program received about $18 billion in 2013, according to HUD. The vouchers are the federal government’s major program to assist low-income families, the elderly and the disabled. Renters in this program, most of whom are poor families with children, seniors or people with disabilities, generally pay 30 to 40 percent of their income to rent and the voucher makes up the difference.
The president is also seeking $726 million for the housing needs native American tribes.
Total Spending: $30.5 billion
Percentage Change from 2013: 13 percent decrease
Discretionary Spending: $16.3 billion
Mandatory Spending: $14.1 billion
Highlights: Amid the political battle in Washington over gun control, the FBI is proposing to double the capacity of the bureau’s National Instant Criminal Background Check System. NICS is used by federally licensed firearms shops to determine whether a prospective buyer is eligible to buy firearms or explosives.
On other law enforcement fronts, the FBI is proposing an additional $215 million to support national security, cyber security and criminal investigations of financial fraud and mortgage fraud.
The Justice Department is proposing $166.3 million to alleviate prison overcrowding, using some of the money to begin activating facilities in West Virginia, Mississippi and Thomson, Ill. The Thomson facility being purchased from the state of Illinois was envisioned as a place to house terrorist suspects from Guantanamo Bay. The idea of bringing Gitmo detainees to Thomson stirred political controversy and the Obama administration abandoned it. The Bureau of Prisons has been a focus of growing concern at the department because of tight budgets.
Last month, Attorney General Eric Holder moved $150 million to the prison system from other Justice Department accounts to stave off daily furloughs of 3,570 federal prison staffers. The step was necessary because of the $1.6 billion in budget reductions at the department that took effect March 1. For the fiscal year beginning next Oct. 1, the department is proposing a $6.9 billion budget to run the nation’s 122 federal prisons that hold 222,400 offenders.
Total Spending: $72.6 billion
Percentage Change from 2013: 33.4 percent decrease
Discretionary Spending: $12.1 billion
Mandatory Spending: $60.5 billion
Highlights: The bulk of proposed cuts at Labor would come from a decrease in mandatory spending on unemployment insurance as the economy improves and more jobless people reenter the work force. Spending on long-term unemployment benefits is also declining because Congress approved a measure last year reducing the current maximum of 99 weeks of unemployment benefits to 73 weeks.
The agency’s discretionary budget would target $100 million in new spending to help military veterans find jobs in the civilian work force, part of the Obama administration’s broader effort to combat high unemployment levels among veterans. Some of the money would go to state grant programs that help disabled veterans find work. The department would also expand programs to help wounded service members who have not left the military, but are about to transition to civilian life. National Guard and reserve members would also be eligible for the first time.
Another $80 million would boost grant money to states for job training services for adults, youth and dislocated workers. It would increase from 5 percent to 7.5 percent the amount of money that governors could use for innovative statewide programs.
In enforcement, the Occupational Safety and Health Administration would get $5.9 million to hire more staff to investigate whistleblower allegations. The Wage and Hour Division would see an increase of $3.4 million to improve enforcement of overtime and minimum wage laws as well as the Family and Medical Leave Act.
The Mine Safety and Health Administration would see a $5.8 million increase for investigating safety at coal and other mines, and another $2.5 million to implement recommendations for improved safety following the deadly explosion at the Upper Big Branch mine in West Virginia.
Total Spending: $17.7 billion
Percentage Change from 2013: 0.1% decrease
Discretionary Spending: $17.7 billion
Mandatory Spending: 0
Highlights: Obama’s budget includes $105 million to start an ambitious joint human-and-robot space mission that may eventually cost about $2.6 billion. The mission would have a robotic spaceship lasso a small asteroid, haul it to near the moon and then spacewalking astronauts would explore the space rock. The idea is to test technologies and methods to protect Earth from being hit by dangerous asteroids and prepare astronauts for a future mission to Mars. Some of the initial money would be used to better scan the solar system for asteroids.
The proposal increases by almost $300 million money to help private companies develop commercial spaceships to carry astronauts to the International Space Station instead of the Russian Soyuz rocket and the now-retired space shuttle fleet. Republicans in Congress have at times balked at increases in this program. It also generally continues current spending levels for NASA’s biggest ticket items, $5 billion a year for science, $3 billion a year for the International Space Station, construction of a new heavy-lift rocket and a capsule to hold astronauts, and what will eventually be an $8 billion replacement for the Hubble Space Telescope.
NASA’s education spending would drop by $45 million — nearly one-third of the agency’s education budget — because science education would be consolidated and augmented at other agencies, especially the Department of Education.
After sequestration, NASA’s 2013 spending has dropped to about $16.6 billion.
Total Spending: $47.3 billion
Percentage Change from 2013: -17.7 percent
Discretionary Spending: $51.8 billion
Mandatory Spending: $0
Highlights: Improving security at America’s 274 diplomatic posts abroad in the wake of the Sept. 11, 2012, attack on the mission in Benghazi, Libya, is a main aim of Obama’s proposed 2014 State Department budget. The proposal calls for spending more than $4 billion on security upgrades and additional protective personnel, as recommended by an expert panel convened after the Benghazi attack that killed the U.S. ambassador to Libya and three other Americans.
Significant reductions in the proposed budget reflect the Obama administration’s scaling down of operations in Iraq, Afghanistan and Pakistan. Although contingency programs in those frontline states account for $6.8 billion of the proposed budget, that is $4.2 billion less than requested in 2012. It includes $1.7 billion for civilian programs in Iraq, $3.1 billion for Afghanistan and $1.3 billion for Pakistan.
The budget honors commitments in assistance to U.S. allies in the Mideast: Israel, $3.1 billion in military aid, Egypt, $1.5 billion in military aid and economic support, and $660 million for Jordan. And, it contains a request for $580 million for programs to encourage reform in the Middle East and North Africa in the aftermath of the revolutions that have rocked the Arab world.
It also earmarks $8.3 billion for global health initiatives, including $6 billion for AIDS programs, $1.1 billion for food security and $481 million for efforts to combat climate change. In addition, the budget sets aside $4.1 billion for humanitarian assistance around the world.
Agency: Veterans Affairs
Total Spending: $149.5 billion
Percentage Change from 2013: 10
Discretionary Spending: $63.5 billion
Mandatory Spending: $86 billion
Highlights: The president is proposing to increase spending by nearly $300 million for that part of the VA responsible for handling disability claims, an increase of more than 13 percent. More veterans are seeking compensation for wounds and illness incurred or aggravated while on active duty. The VA is struggling to keep up and the number of claims pending long than 125 days has soared over the past four years.
The VA estimates that it will treat 6.5 million veterans in the coming fiscal year at its medical centers and outpatient clinics. Overall spending for VA health care will increase by about 2.5 percent, but certain services would grow at a much faster pace. For example, an increase of more than 13 percent is sought for mental health care, and an increase of 15 percent is sought for geriatric care.
The budget proposes to pare spending on major constructions projects, but includes money for the completion of a mental health center in Seattle and for the addition of three new national cemeteries: two in Florida and one in Omaha, Neb. The VA’s spending on research would flatten under the president’s budget.
The president is also repeating his call for establishing a Veterans Job Corps, which would dedicate $1 billion over five years putting veterans to work improving public lands and working in law enforcement and firefighting jobs, but the same proposal went nowhere last year.