President Bush's $2.8-trillion budget proposal for fiscal year 2007 seeks to cut domestic discretionary spending, hitting some construction accounts, but there are bright construction spots, particularly highways and military construction, which would be in line for increases.

House Budget Committee staffers unpack documents outlining administration's fiscal 2007 budget proposal (Photo courtesy of House Budget Committee)

Besides the regular budget, the administration also says it will seek $52.3 billion in supplemental spending, most of which is expected to go to the war in Iraq.

The Feb. 6 release of the President's 2007 spending blueprint is only the start of months of debate on Capitol Hill. It will be up to congressional appropriators to set the final numbers, which won't emerge until the fall. Election-year politics will color the outcome.

In his budget message, Bush said, "Again, I am proposing to hold overall discretionary spending below the rate of inflation and to cut spending in non-security discretionary programs." The plan seeks to pare domestic budget authority other than for Dept. of Defense and homeland security programs, by 0.5%, to $398.3 billion.

Transportation construction is one area that escaped Bush's cutbacks, thanks to last year's SAFETEA-LU measure, which ensures increases in federal road and transit spending through 2009. The administration's budget includes a $39.1-billion highway obligation ceiling, up 8% from 2006, plus $8.8 billion for the Federal Transit Administration, up 4%.

Overall DOD spending would rise 7%, to $439.3 billion, which includes increases in construction. The general military construction accounts would edge up 1%, to $6.4 billion, military family housing construction would climb 11%, to $2.1 billion and funding to carry out the new round of base closures would jump more than 200%, to $5.8 billion. Much of the base closure money would go for construction at posts that will add personnel transferred from installations to be shut.

Programs pegged for cuts include the Environmental Protection Agency's water infrastructure account, which would be trimmed 14%, to $2.8 billion. Within that program, called State and Tribal Assistance Grants, aid for clean water state revolving funds would be slashed 24%, to $688 billion.

Also in line for reductions are the Dept. of Energy defense cleanup account, which would be cut 13%, to $5.4 billion

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  • The Corps of Engineers civil works program would get $5.8 billion, down 34% from this year's $7.4 billion. The 2006 total includes $2.9 billion in supplemental spending to rebuild levees and carry out other work in the Gulf Coast in the aftermath of Hurricane Katrina. Excluding the post-Katrina money, the budget still represents a reduction of 11%.

    Federal buildings accounts show mixed results. The General Services Administration's construction program would be down 13%, to $690 million, with $306 million of that for a new Coast Guard headquarters and other development of the St. Elizabeths hospital campus in Washington, D.C. Bureau of Prisons buildings and facilities would rise 30%, to $117 million.

    The budget seeks to cut Dept. of Veterans Affairs major construction 34%, to $399 million, but provide a 2% hike to State Dept. embassy security, construction and maintenance, which would receive $1.5 billion.