Obama Administration Releases Details of FY 2010 Budget

Following President Obama's address to Congress Tuesday, his administration today released a blueprint of his upcoming budget request to Congress for fiscal year 2010. The outline provides a glimpse of the administration's budgetary and fiscal priorities for the next four years. Specific details and funding levels will not be available fully until the entire budget is submitted in April. Summaries released today show a significant increase in at least one AGC market area: water and wastewater construction. The administration is recommending $3.9 billion for the Safe Drinking and Clean Water State Revolving Loan Fund Programs, about a $2.4 billion increase over FY 2009 levels (excluding the economic stimulus). However, the budget appears to recommend essentially level funding for the Corps of Engineers and Department of Transportation. The budget also provides insight into the administration's tax priorities for the next four years. Specifically, it shows a proposed tax increase for married couples making $250,000 or more a year or singles making $200,000 or more a year by reinstating the 36 and 39.6 percent rates. The budget also proposes imposing a 20 percent rate on capital gains and dividends for these taxpayers, as well as reinstating the personal exemption phase-out and limitation on itemized deductions. These upper-income tax provisions would raise approximately $637 billion over the next 10 years for deficit reduction. The budget also proposes maintaining the estate tax-set to drop to zero in 2010-at the 2009 level of 45 percent and a $3.5 million exemption. The budget outline also shows about $650 billion in proceeds from the auctioning of emission allowances that would be reserved for clean energy technology initiatives and to compensate families through the Making Work Pay tax cut. Evidence of these revenues shows that the administration intends to seek climate change legislation on Capitol Hill that includes a market-based mechanism (e.g., cap and trade) to control greenhouse gas emissions.