The Obama administration is portraying its fiscal 2013 budget proposal for the Army Corps of Engineers as a boon for businesses that rely on navigable inland waterways.

As Jo-Ellen Darcy, the Army's assistant secretary of civil works, puts it, the spending plan reflects "the importance the administration places on navigation."

Navigation interests have long grumbled about what they see as the Army Corps' emphasis on ecosystem restoration at the expense of dredging shipping channels, maintaining locks and other projects aimed at keeping waterways open.

President Obama's overall $4.7 billion Army Corps budget proposal, Darcy said at a briefing Monday, would send 37 percent of the agency's cash to navigation projects, compared with 33 percent for environmental restoration and 30 percent for flood control.

And even though Obama's budget proposal is 5.4 percent smaller than what the agency is spending this year, Darcy said, there would be $176 million more for navigation, an 11 percent increase over fiscal 2012 levels. And the corps would spend $848 million on harbor maintenance, up 12 percent from last year.

The industry's reaction? "Overall, disappointment," said Amy Larson, president of the National Waterways Conference, whose members include levee managers, shipping companies and engineering firms.

Despite boosting waterways projects, industry officials say, the budget proposal fails to provide enough for navigation and levees to ensure U.S. water infrastructure can adequately provide flood protection and help meet Obama's goal of doubling the nation's exports by 2015.

The corps is under unprecedented pressure to do more with less. Spending caps imposed last year during the White House's debt-limit showdown with Congress have rendered the Army Corps' budget a zero-sum game for competing interests of navigation, flood control and ecosystem restoration.

Adding to the pressure were epic floods last year along the Mississippi and Missouri rivers, which forced the agency to raid other accounts for its response. Congress provided $1.7 billion for the estimated $2 billion disaster.

With so many needs and so little cash, few groups are thrilled by their prospects in the corps' budget sweepstakes. And waterways interests are pressing lawmakers to spend more on locks, levees and harbors and less on environmental restoration.

A big competitor for cash is the massive Everglades restoration. Last year, about 10 percent of the Army Corps' construction budget went to the Everglades effort. The 30-year, $13.5 billion project was approved overwhelmingly by Congress and the Florida Legislature in 2000 as being essential to securing water supplies for 7 million people and protecting Everglades National Park and other federal parks and wildlife refuges.

But Larson is telling lawmakers that some of that cash could pack more of an economic punch if spent on waterways.

"It would seem to me," she said, "that the nation would be better served with a portion of that money focused on other projects which contribute more to the creation of jobs and our place in the global economy."

Inland waterways face an $8 billion repair backlog, said Mike Toohey, president of the Waterways Council, a coalition of inland navigation interests.

"The funding doesn't get anywhere near what the need is," Toohey said.

'Merit-based system'

Environmentalists, whose interests see slight funding cuts in Obama's Army Corps budget proposal, cheered what they saw as the administration's continued support for ecosystems restoration, which also gets funding through the Interior Department and U.S. EPA.

The Everglades project -- by far the most expensive environmental restoration project in the corps portfolio -- would receive $153 million under Obama's fiscal 2013 budget request for the agency, about $15 million less than the administration sought last year. Congress ultimately chopped last year's request to $142 million.

Under pressure from Congress to cut spending and environmental programs in particular, the administration has pulled back on funding bestowed on the Everglades after Obama took office in 2009. The 2013 budget request is down significantly from more than $220 million the restoration received from the corps budget and federal stimulus in 2009 or the $214 million the administration requested in 2010.

"They're trying to, I think, respect the message that's being given by Congress, while still putting forward their own priorities and their needs," said Julie Hill-Gabriel, Audubon Florida's director of Everglades policy.

Overall, she said, there's reason for Everglades advocates to be pleased. All restoration projects authorized by Congress are now under construction, and Interior's budget proposal includes $58 million in Everglades-related spending -- including $3 million for establishing a new 150,000-acre wildlife refuge at the ecosystem's headwaters.

"They're still making this a priority," Hill-Gabriel said.

But the Everglades is facing competition for the corps' attention. The agency faces a $60 billion backlog in projects authorized but never funded by Congress. To appease as many congressional patrons as possible, a large number of projects are given small amounts of funding, leading to crippling construction delays and cost overruns.

In a report last year, the National Research Council cited the corps' shrinking budget and ever-increasing list of demands from Congress in characterizing its mission as unsustainable (Greenwire, March 25, 2011). The report called the dilemma a fundamental paradox of how the nation manages its water resources.

"It's not just up to the corps to change themselves," David Dzombak, an engineering professor at Carnegie Mellon University and the panel's chairman, said in an interview last year. "But the nation needs to rethink how we go about developing, prioritizing and implementing water resources projects."

Congress' self-imposed earmark ban failed to provide a cure. The agency last week released its civil works plan for 2012, essentially a list of projects to be funded in fiscal 2012. Congress, it turns out, had spread $507 million across 26 corps-controlled funds, which the agency redistributed to fund, among other things, $212.7 million in new projects requested by individual lawmakers.

Maj. Gen. Merdith "Bo" Temple said this week that the corps made a point to fund fewer projects more generously to help see as many over the finish line as possible and chip away at the backlog.

"There may be fewer projects started in the coming year, but we're going to fund them efficiently, get them done and out the door, so they can get benefits to the nation sooner," he said.

Steven Stockton, the Army Corps' deputy director of civil works, said in a recent interview that politics didn't drive project selection. "We have a merit-based system, and all projects have to go through that process," he said.

Paying for waterway maintenance?

Another big problem for the waterway industry: the administration's push to force waterway users to pay more for maintenance.

To date, waterways have been maintained almost entirely by the federal government.

And a congressional spending binge over the past 15 or so years has emptied a maintenance trust fund.

So industry officials are promoting a proposal to hike a fuel tax of 20 cents a gallon to raise money for maintenance. But critics say other conditions of their proposal would offset their offer to take on a larger share of the burden.

The Obama administration countered with its own proposal to add industry fees to raise $1.1 billion over the next decade (Greenwire, Oct. 3, 2011). That proposal, which the administration handed to Congress last year, was once again floated as part of yesterday's budget proposal.

Although both sides continue to negotiate behind the scenes, neither side appears willing to give any ground.

"They're very rigid with their proposal," the Waterways Council's Toohey said. "And so we'll both go to Congress to seek a resolution."

Toohey suggested the real headline to emerge from the corps' budget briefing Monday was that the cost estimate for the Olmsted Locks and Dam project on the Ohio River -- originally authorized in 1988 and expected to cost $775 million and take seven years to complete -- had now climbed to $2.9 billion.

Waterways industry officials say the project is an example of why they are unwilling to assume a greater share of the Army Corps' construction costs. Toohey said the project will chew up most waterway funding.

"It means," he said, "that there will be only enough money for the next decade for Olmsted and just a little bit for everyone else -- nothing on the upper Mississippi, nothing for the Illinois, nothing for the other Ohio River projects, nothing on the Tennessee and nothing on the Cumberland."

The corps is in a poor financial position to prepare the nation's ports and harbors for the widening of the Panama Canal, which is expected to bring an influx of supersize freighters to the U.S. East Coast from Asia when it's completed in 2014.

"We want to grow our export markets for grain and coal," Toohey said. "We have to rely on locks and dams that are 80 years old. That's a high-risk strategy."