Federal Budget Proposals


By Libby Casey

Alaska takes some lumps in the budget proposed by President Obama on Monday. But it could’ve been worse.  The President’s $3.7- Trillion budget cuts or eliminates more than 200 programs, yet invests in education and other areas.  It calls for a freeze in annual domestic spending over five years.

Some of the Alaskan items on the chopping block have been there before.

Reading President Obama’s budget can bring on a case of déjà vu, because he asked for some of the same cuts to Alaska programs last February… but they survived the year.  One of them is the Denali Commission program that helps build local health clinics.  The President is repeating his call to eliminate all $10-million from it.

Denali Commission co-chair Joel Neimeyer says they were expecting the health care facilities construction program to be targeted.

I guess you could say we’re not surprised to see it.  What it affectively means though is for the 6-8 projects which are nearing completion of their preconstruction activities, they’ll have to find other sources to help fund their projects.  We’ll see what we can do there.

Neimeyer says projects could be affected in places such as Willow, Hoonah, and Shishmaref.  But he says it’s not like they’d be abandoned – he says the Commission works with projects to become sustainable and attractive to funders, even in the early stages.

The federal funds for the Denali Commission’s health care clinics program was as high as 40 million dollars at one point, but that pot of money started out as an earmark, and so is exactly the kind of thing the White House is targeting.

The President is giving the Denali Commission $12-million of federal money in the base budget, which Neimeyer says he’s pleased with.

We see this as positive sign.  What it demonstrates is continued support of the work we’re doing.

Obama’s National Economic Council Director Gene Sperling held a call Monday with reporters, and said cuts such as the Denali Commission’s clinic program are necessary – especially this year:

There’s just no question there are going to be programs like that that are going to be eliminated that are going to be very tough.  And we’re not pretending otherwise.  We’re not pretending that the things being eliminated are all just waste and abuse.

Alaska Senator Mark Begich says more than ever, everyone in Washington is trying to balance the intense need to cut the deficit, while making sure programs that are good investments still get funded.

At the end of the day, if we don’t deal with the sustainability of the federal budget, everything we hold dear to our state in the sense of some of these basic core programs that are important, we’re not going to be able to fund in the future.

One proposed cut that could hit Alaska is the President’s plan to eliminate the High Energy Cost Grants Program, which sends money to utilities in rural areas where rates are especially high.  A lot of its funding goes to Alaska.

The budget would also chop in half the $34-million that goes to the Alaska Land Conveyance Program.  That was threatened last year but never actually got cut.

And the President wants to reduce by half the Low Income Home Energy Assistance Program, or LIHEAP, which helps struggling families across the country pay their heating bills.

Acting Director for Alaska’s Division of Public Assistance, Ron Kreher says — bottom line —  the cuts could hurt.

If the president’s proposed budget is enacted and there’s a significant reduction in federal funding for the LIHEAP program, it will be more of a challenge for us to meet the needs of low income Alaskans.

Kreher says of the 23 million dollars Alaska got from LIHEAP in the last  budget, about two thirds went to the state, but there are also eleven tribal groups that get LIHEAP funds.

In all likelihood if there was a significant cut in level of federal funding, those tribal entities would be challenged to meet the needs of all the eligible households they’ve served in the past.

But it’s difficult to speculate, because we don’t know in the final analysis what the funding will be.  But as it’s proposed it’s a significant cut in our federal funding.

“Difficult to speculate,” Kreher says, because this is just a proposal.  It’s not written in stone.

Alaska Representative Don Young put out a statement saying while he appreciates curbing spending, he thinks President Obama’s proposals heap burdens on the backs of rural America… and Young says it’s up to Congress to decide what to do next.



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