Washington, D.C.— President Bush today released the $2.9 trillion budget proposal for fiscal year 2008, which is aimed at funding military and war programs over domestic spending. “While the FY 08 budget request includes an increase in defense and security-related construction accounts over last year, there is a near freeze on domestic spending,” said Stephen E. Sandherr, chief executive officer of The Associated General Contractors of America (AGC).

The defense related construction programs offer the only bright spot for construction. Military construction is increased by $11 billion, including a $5.6 billion for Base Realignment and Closure (BRAC) and Veterans construction is increased by more than $400 million.

“While there is real concern about fiscal restraint and winning the war on terror, this budget does not address our nation’s long-term capital investment needs,” added Sandherr. “For a country that relies so heavily on its infrastructure for increased efficiency and economic growth, the competing budget priorities highlight the need to create a true capital budget to fund long-term infrastructure investment.”

Funding for the U.S. Army Corps of Engineers construction program is cut by more than $500 million, water infrastructure is cut by nearly $400 million, prisons are cut by about 50 percent and General Services Administration Construction is cut by more than $200 million under this budget proposal.

AGC is pleased that the President’s budget proposes to fully fund the SAFETEA-LU guaranteed level of $39.6 billion for the federal-aid highway program for FY 08. However, the budget does not propose to include a $631 million positive adjustment required under SAFETEA-LU to reflect the latest user fee receipts. The budget calls for new user fees to fund growing aviation needs, and it also identifies plans to propose expansion of the existing inland waterways user fee to address system needs but gives no contemplation to enhancing the user fee for the highway trust fund that is nearing insolvency.

The Associated General Contractors of America (AGC) represents more than 32,000 firms, including 7,000 of America’s leading general contractors, and over 11,000 specialty-contracting firms. More than 13,000 service providers and suppliers are associated with AGC through a nationwide network of chapters. Visit the AGC Web site at AGC members are "Building Your Quality of Life.”