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Obama Budget Hikes Roads, Rails But Cuts Other Construction Programs

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President Obama's $3.7-trillion fiscal 2012 budget proposal would freeze total non-security related discretionary funding, but within that overall freeze, calls for sharp increases in surface transportation accounts, to kick off a proposed $556-billion, six-year highway-transit-rail measure.

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On the other hand, Obama's budget request, sent to Congress on Feb. 14, recommends cuts in other construction accounts, including airport grants, Environmental Protection Agency water infrastructure and General Services Administration new construction.

The release of the budget proposal intensifies the debate that has already begun over federal spending. Congressional committees will dig into the details in hearings over the next several months.

Congressional Republicans, who now control the House and increased their minority in the Senate, are sure to oppose the Obama plan. House Budget Committee Chairman Paul Ryan (R-Wisc.), a major GOP voice on spending issues, declared: "The President's budget spends too much, taxes too much, and borrows too much...."

One of the constructin highlights in Obama's budget is his proposed $556-billion, six-year surface transportation bill. It would combine authorizations for highways, transit, and, for the first time, passenger rail and a national infrastructure bank.

The administration is seeking to launch the multi-year plan with an initial booster shot of $50 billion more than current funding for the combined program.

Specifically, the 2012 budget blueprint includes: $69.7 billion in obligations for highways, $22.2 billion for transit, $8 billion for passenger rail and $5 billion for the infrastructure bank.

The budget repeats Obama's recent statement that the new transportation bill would be "paid for," but again doesn't spell out exactly how it would be paid for.

The budget states: "The President is committed to working with the Congress to ensure that funding increases for surface transportation do not increase the deficit."

Highway and transit programs have been operating under stopgap measures since Sept. 30, 2009, when the last multi-year surface transportation measure expired.

Here are the figures for some major construction accounts:

Major Outlays
Highway obligation ceiling
High-speed rail
Airport improvement grants
EPA water infrastructure
Corps of Engineers construction
VA construction, major projects
GSA construction
*Fiscal 2011 spending generally equals 2010 levels through March 4
**Funding is for "high speed corridor development"
Source: Office of Management and Budget

While the fight begins in earnest over fiscal 2012 spending, construction industry groups first face a more immediate threat: House Republicans' proposed sharp reductions in domestic spending for the rest of the current fiscal year.

The House Appropriations Committee on Feb. 12 released a revised spending bill for the last seven months of fiscal 2011, including $60.9 billion in cuts from 2010 enacted levels.

Among the construction programs that would be trimmed are: high speed rail, GSA federal buildings, Corps of Engineers civil works construction, and EPA water infrastructure.


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