BUDGET:

Obama's budget pushes clean technologies, cuts fossil fuel incentives

President Obama's $3.834 trillion budget, to be released today, proposes to inject billions more dollars in clean energy research while slashing federal fossil fuel subsidies, according to White House officials.

The fiscal year 2011 budget will include $6 billion for clean energy technologies, mostly focused on research, development and demonstration, the White House said.

While sending more cash to priority areas, Obama is also seeking a three-year non-military discretionary spending freeze. The move is to help trim a federal deficit that is projected at $1.3 trillion in 2011 and, without efforts to rein it in, expected to balloon further in the next decade.

Obama's budget proposal will include $20 billion-worth of more than 120 terminations, reductions, and savings. The savings are necessary to fund increases in priority areas while keeping the discretionary baseline flat, according to White House Office of Management and Budget Director Peter Orszag.

To further spur a switch to clean energy and trim the deficit, the White House budget will also seek to eliminate tax preferences for oil, gas and coal companies, Orszag said. OMB says the move will raise an additional $40 billion over ten years.

The budget move comes a week after Interior Secretary Ken Salazar and American Petroleum Institute President Jack Gerard exchanged heated words, after Gerard accused the administration for actions that have led to a dramatic drop in oil and gas leases on federal lands and waters (Greenwire, Jan. 27).

The budget cuts are sure to face resistance in Congress from both sides of the aisle. In last year's budget, the White House managed to win Congressional support for 60 percent of the cuts he had proposed, officials said. In that budget, Obama also had proposed to increase fees and eliminate tax breaks for oil and gas companies to raise more than $30 billion in revenue over a decade. But not all of the measures won support from Congress.

One measure he failed push through last year was a new $4-per-acre fee on "nonproducing" oil and gas leases in the Gulf of Mexico.

The White House characterized the budget as a responsible move in tight fiscal times. "It's not a left-wing budget. It's not a right-wing budget. It's a pragmatic budget," said one official.

They also reiterated President Obama's threat last week, during the State of the Union address, to use his veto power if Congress does not act to curb wasteful spending.

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