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US budget deal averts most agency cuts

01 May 2017 20:48 (+01:00 GMT)
US budget deal averts most agency cuts

Washington, 1 May (Argus) — Republican and Democratic leaders in the US Congress have reached a tentative agreement that would reject President Donald Trump's calls to slash spending at environment and energy agencies over the next five months.

The spending agreement, released today, would slightly increase funding at the US Interior Department and other energy-related agencies while cutting the US Environmental Protection Agency's (EPA) budget by just 1pc to $8bn. The bill overall would authorize about $1.2 trillion in government spending for all of fiscal 2017, which ends on 30 September.

Trump had asked lawmakers to reduce spending at non-defense agencies such as EPA, Interior and the US State Department by $18bn for the rest of fiscal 2017 to help offset a $30bn increase in military spending and $3bn increase in border security spending. Trump wants even greater non-defense cuts in next fiscal year, including a proposed 31pc budget cut at EPA and 28pc cut at State.

But Republican and Democratic leaders today rejected most non-defense cuts while providing half of the requested increase to military and border security, signaling that Congress is unlikely to sign off on far deeper cuts in fiscal 2018. Congress will need to vote to pass the bill, and have Trump sign it, by 5 May to avert a government shutdown.

The bill would prevent the expiration of health benefits for coal miners and exclude most policy riders related to the environment and energy. US House of Representatives minority leader Nancy Pelosi (D-California) said Democrats eliminated 160 "poison pill riders" in the bill. US House speaker Paul Ryan (R-Wisconsin) lauded the agreement and said it met Trump's efforts to boost military spending.

Some policy riders did survive. The bill directs regulators to issue a report on a mining permit backlog, expedite a switch to online oil and gas lease sales, and adopt policies that recognize the "carbon neutrality" of biomass. It also asks EPA to draft a report within 90 days on ways it could ease compliance with tighter ozone air quality standards through cooperative agreements.

The bill would boost energy program funding at the US Energy Department by 2.5pc to $11.3bn, of which $668mn would focus on research on fossil fuel. The US Bureau of Land Management would see a 1pc funding increase, while the US Bureau of Ocean Energy Management and the US Bureau of Safety and Environment Enforcement would see nearly flat funding levels.

The agreement would keep the US Commodity Future Trading Commission's budget at $250mn, the same amount it has been for the last two years. The US Federal Energy Regulatory Commission, which self-funds its budget with fees on industry, was authorized to spend $347mn this year, an increase from the $320mn it spent last year.