Green Hill Update: Federal Budget Basics

Jul 13, 2011

Dear Friends,

We have recently combined the Green Team and the Green Hill Update lists and are launching a new e-newsletter to provide you with our analysis of important energy and climate measures being considered by Congress. We hope to keep you informed, about once a month, without overwhelming your inbox. You can always get more detailed information on the environment page of FCNL’s website.


Marcia Cleveland

Energy and Environment Program in the Budget Process

What are appropriations bills, and what do they have to do with renewable energy or the EPA? How are important environmental protection programs faring in Congress’ budget process? Find out in this Green Hill Update, and then write to Congress and let them know your position on subsidies and funding for the environment!

The Deficit/Debt Ceiling Negotiations

Lately the news has been dominated by the negotiations between President Obama and House Republicans on the deficit and raising the debt ceiling. Democrats are willing to cut Social Security and Medicare but only if the wealthy pay more taxes. Some Republicans are opposed to any tax increase; others are willing to “close tax loopholes”, which would result in more revenue. The “tax loopholes” are mostly provisions in the tax code that are enormously valuable for oil and gas companies. If these loopholes are not closed, more cuts will be made in programs FCNL supports.

Press coverage of the negotiations rarely provides details on how energy and environment programs are faring.

The Politics of FY12

Right now Congress is considering the fiscal year 2012 budget, referred to as FY12. It covers the period October 1, 2011 – September 30, 2012. This budget is caught up in the fierce political debate about the deficit and raising the debt ceiling.

The House of Representatives has passed most of its appropriations bills. The Agriculture appropriations bill (H.R. 2112) has passed; the Energy and Water bill (H.R. 2354) will be voted on this week; and the Interior, Environment bill will come to the floor soon after that. These bills spell out how the new conservative majority wants to shrink government and stake out bargaining positions in deficit/debt ceiling negotiations.

The Senate held hearings but has passed no appropriations bills. It apparently wants to avoid taking a position on spending until conservatives make concessions on increasing taxes and closing tax loopholes.

Remember, current press reports of cuts to EPA’s budget, renewable energy programs or conservation, are reporting the bargaining positions of the new conservative majority of the House of Representatives.

EPA’s Budget

The House appropriations bill proposes cutting EPA’s budget to $7.1 billion. To put this in historical perspective, EPA’s budget was more than $7.1billion throughout the George W. Bush administration. EPA’s current budget is $8.6 billion, which is typical of its budgets before the fiscal crisis.

The cuts would deeply hurt the states. The House Committee would cut $1 billion from the State Revolving Funds, which funds construction of sewage treatment plants and drinking water treatment plants. There are also cuts to grants that states use to implement and enforce the Clean Air Act and Clean Water Act. These cuts are explicitly intended to undermine the ability of states to implement new air, water and solid waste regulations that apply to coal-fired power plants.

Click this link for an explanation of the budget process.

Energy Programs

The Energy and Water subcommittee has proposed a budget that would increase funding for nuclear power and fossil fuels and decimate funding for renewable energy research and projects. This bill, like the Interior, Environment appropriations bill, is very much a political statement. It appropriates $35 million for the Yucca Mountain nuclear waste repository in Nevada, a program which was recently cancelled by the Administration and is opposed by Senator Harry Reid. The House Energy and Water appropriations bill would also increases funding for fossil fuel research by $32 million over last year.

The Agriculture appropriations bill would eliminate all funding for farmers and ranchers who raise bio-fuels feed stocks.

Conservation Programs

The departments of Agriculture and Interior have a number of very important programs that fund conservation. Family farms and land trusts have come to depend on these programs to protect watersheds and soil and to preserve habitat and open space.

The Agriculture appropriations bill would eliminate $521 million for the Conservation Stewardship and Environmental Quality Incentives Programs in the Department of Agriculture. The number of acres in the Wetlands Reserve and Grasslands Reserves programs would also be reduced.

The Land and Water Conservation Fund, which was created in 1964, is funded by royalties from offshore oil drilling. The Interior, Environment appropriations bill would cut the LWCF to $62 million, which is an 80% reduction from FY11 funding and a 93% cut in the amount requested by the Obama administration.

Riders, Riders and More Riders

All of the appropriations bills that fund energy and environment programs are loaded with riders to undo almost everything the conservatives do not like. They prohibit listing new endangered species, regulating greenhouse gases or controlling mountain-top removal; they would allow pesticides in run-off that enters rivers and pollution from uranium mining in the Grand Canyon watershed. They would prevent EPA from clarifying the definition of what water is covered by the Clean Water Act, and much, much more.

No Crystal Ball

The final FY12 budget will be determined by the current debt ceiling negotiations. None of the House appropriations bills will pass the Senate without substantial changes. The danger is that the House bills take such an extreme position that they draw the resulting compromise toward the conservative position. That of course is the intent behind them.

Write to your senators today and ask them to end tax loopholes and use the money to restore funding for the programs you care about.

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