President Releases FY 2014 Budget Request

On April 10, President Obama released his $3.77 trillion budget for fiscal year (FY) 2014.  The budget, which was submitted two months late, sets a path to cut the deficit by as much as $1.8 trillion over 10 years.  The president’s budget maintains his call for taxing the wealthy by letting the Bush-era tax cuts expire for households that earn more than $250,000 a year, while imposing a new 30 percent minimum tax on millionaires and repealing established tax rules for oil and gas companies.  Construction spending accounts total about $166 billion; however, that number needs to be taken with a grain of salt as it includes an unrealistic $50 billion “up front” infrastructure investment paid for with the savings from the drawdown of the wars in Iraq and Afghanistan.  This proposal has been tried before and was a non-starter in both the House and Senate.  Several infrastructure financing provisions long supported by AGC were included in the president’s budget, including: the elimination of the volume cap for private activity bonds for water infrastructure; increasing the national limitation amount for qualified highway facility bonds; and the creation of a permanent program that would provide conventional taxable bonds to state and local governments to finance new investments in governmental capital projects. Federal Construction The president’s FY 2014 budget request for military construction on the whole provides a slight gain over FY 2013 funding levels with about a $400 million - or approximately  5 percent – increase  for direct service military construction accounts. The U.S. Army Corps of Engineers Civil Works Program construction accounts would experience a slight decrease of $160 million – or about 3 percent – under the president’s 2014 budget request when compared to FY 2013 appropriations levels, albeit without including Hurricane Sandy aid.  The General Services Administration’s FY 2014 budget request includes $816 million for the new construction and acquisition account, more than $760 million above the FY 2012 and FY 2013 funding levels, and $1.3 billion for the repairs and alterations account - an increase of over $1 billion compared to FY 2012 and FY 2013 levels. For additional details on the Federal Construction accounts, please click here. Transportation President Obama’s budget proposal for transportation includes many of the same ideas that the administration has proposed over the past several years, but none of which have been met with much support in Congress. Included in the transportation request for FY 2014 are more details on the $50 billion “Fix It First” initiative most recently proposed by the president in his State of the Union address.  More information on the transportation programs can be found here. Water Infrastructure President Obama released his Budget Proposal for FY 2014 on April 10. In it, he proposes cuts to both the Environmental Protection Agency’s (EPA) state revolving loan funds (SRFs) and the Rural Utilities Service’s Rural Water and Waste Disposal program. He also proposes changes to the tax code that would affect water infrastructure funding. Click here for more information on the water infrastructure programs. Tax As part of the administration’s FY 2014 Budget Request to Congress, the Department of the Treasury released the General Explanations of the administration’s FY 2014 Revenue Proposals, or “Greenbook.” President Obama’s budget maintains a focus on taxing the wealthy by reiterating his plan to let the Bush-era tax cuts expire for households that earn more than $250,000 a year, including reinstating the limit on itemized deductions (Pease) and Personal Exemption Phase-out (PEP), as well as  taxing qualified dividends at ordinary income rates and capital gains at a 20 percent rate. Additional information on the president’s tax proposals can be found here. Labor/Employment The president’s FY 2014 budget contains information on the administration’s enforcement and employment initiatives. The budget is ultimately subject to congressional approval – where it faces considerable opposition – but shows the administration’s priorities and illustrates how employers can prepare for greater enforcement and regulatory activity in the coming years. Details on the requested funding for labor and employment programs can be found here. The entire budget can be found here. A full analysis of federal construction accounts can be found here. For more information, please contact Sean O’Neill at (202) 547-8892 or oneills@agc.org.