# O f f i c e o f M a n a g e m e n t a n d B u d g e t w w w . b u d g e t . g o v 

# Fiscal Year 2011 

# Budget

of the U. S. GovernmentBudget of the United States Government, Fiscal

Year 2011 contains the Budget Message of the President, information on the President’s priorities, budget over

views organized by agency, and summary tables.

Analytical Perspectives, Budget of the United States Government, Fiscal Year 2011 contains analy

ses that are designed to highlight specified subject ar

eas or provide other significant presentations of budget data that place the budget in perspective. This volume includes economic and accounting analyses; information on Federal receipts and collections; analyses of Federal spending; information on Federal borrowing and debt; baseline or current services estimates; and other techni

cal presentations.

The Analytical Perspectives volume also contains sup

plemental material with several detailed tables, including tables showing the budget by agency and account and by function, subfunction, and program, that is available on the Internet and as a CD-ROM in the printed document.

Historical Tables, Budget of the United States Government, Fiscal Year 2011 provides data on budget receipts, outlays, surpluses or deficits, Federal debt, and Federal employment over an extended time period, gener

ally from 1940 or earlier to 2011 or 2015. To the extent feasible, the data have been adjusted to provide consistency with the 2011 Budget and to provide comparability over time.

Appendix, Budget of the United States Government, Fiscal Year 2011 contains detailed in

formation on the various appropriations and funds that constitute the budget and is designed primarily for the use of the Appropriations Committees. The Appendix con

tains more detailed financial information on individual programs and appropriation accounts than any of the other budget documents. It includes for each agency: the proposed text of appropriations language; budget sched

ules for each account; legislative proposals; explanations of the work to be performed and the funds needed; and proposed general provisions applicable to the appropria

tions of entire agencies or group of agencies. Information is also provided on certain activities whose transactions are not part of the budget totals.

AUTOMATED SOURCES OF

BUDGET INFORMATION

The information contained in these documents is avail

able in electronic format from the following sources:

Internet

. All budget documents, including documents that are released at a future date, spreadsheets of many of the budget tables, and a public use budget database are available for downloading in several formats from the

Internet at www.budget.gov/budget . Links to documents and materials from budgets of prior years are also provided.

Budget CD-ROM . The CD-ROM contains all of the budget documents in fully indexed PDF format along with the software required for viewing the documents. The CD-ROM has many of the budget tables in spreadsheet

format and also contains the materials that are included on the separate Analytical Perspectives CD-ROM.

For more information on access to electronic versions of the budget documents (except CD-ROMs), call (202)
512-1530 in the D.C. area or toll-free (888) 293-6498. To purchase the budget CD-ROM or printed documents call
(202) 512-1800. 

## THE BUDGET DOCUMENTS

GENERAL NOTES

1. All years referenced for budget data are fiscal years unless otherwise noted. All years referenced for economic data are calendar years un

less otherwise noted.

2. Detail in this document may not add to the totals due to rounding.

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON 2010

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## Table of Contents

The Budget Message of the President �������������������������������������������������������������������������������������������������������1

Rescuing the Economy ��������������������������������������������������������������������������������������������������������������������������������7

Reviving Job Creation and Laying a New Foundation for Economic Growth ���������������������������������������19

Restoring Responsibility ���������������������������������������������������������������������������������������������������������������������������37

Department of Agriculture �����������������������������������������������������������������������������������������������������������������������45

Department of Commerce �������������������������������������������������������������������������������������������������������������������������51

Department of Defense �����������������������������������������������������������������������������������������������������������������������������55

National Intelligence Program �����������������������������������������������������������������������������������������������������������������61

Department of Education �������������������������������������������������������������������������������������������������������������������������63

Department of Energy ������������������������������������������������������������������������������������������������������������������������������69

Department of Health and Human Services �������������������������������������������������������������������������������������������73

Department of Homeland Security ����������������������������������������������������������������������������������������������������������81

Department of Housing and Urban Development ����������������������������������������������������������������������������������85

Department of the Interior �����������������������������������������������������������������������������������������������������������������������91

Department of Justice �������������������������������������������������������������������������������������������������������������������������������95

Department of Labor ��������������������������������������������������������������������������������������������������������������������������������99

Department of State and Other International Programs ���������������������������������������������������������������������105

Department of Transportation ���������������������������������������������������������������������������������������������������������������109

Department of the Treasury �������������������������������������������������������������������������������������������������������������������113

Department of Veterans Affairs �������������������������������������������������������������������������������������������������������������117

Corps of Engineers —Civil Works �����������������������������������������������������������������������������������������������������������121

Environmental Protection Agency ���������������������������������������������������������������������������������������������������������125

National Aeronautics and Space Administration ����������������������������������������������������������������������������������129

National Science Foundation ������������������������������������������������������������������������������������������������������������������133

Small Business Administration��������������������������������������������������������������������������������������������������������������135

Social Security Administration ��������������������������������������������������������������������������������������������������������������139

Corporation for National and Community Service ��������������������������������������������������������������������������������143

Summary Tables �������������������������������������������������������������������������������������������������������������������������������������145

OMB Contributors to the 2011 Budget ��������������������������������������������������������������������������������������������������181 Page1 

# THE BUDGET MESSAGE OF THE PRESIDENT

T o t he 

### C ongress of t he 

### U ni t ed 

### S t a

t es 

### :

We begin a new year at a moment of continuing challenge for the American people. Even as we recover from crisis, millions of families are still feeling the pain of lost jobs and savings. Businesses are still struggling to find affordable loans to expand and hire workers. Our Nation is still experiencing the consequences of a deep and lasting recession, even as we have seen encouraging signs that the turmoil of the past 2 years is waning. Moving from recession to recovery, and ultimately to prosperity, remains at the heart of my Administration’s efforts. This Budget provides a blueprint for

the work ahead.

But in order to understand where we are going in the coming year, it is important to remem

ber where we started just 1 year ago. Last January, the United States faced an economic crisis unlike any we had known in generations. Irresponsible risk-taking and debt-fueled speculation— unchecked by sound oversight—led to the near-collapse of our financial system. Our Gross Domestic Product (GDP) was falling at the fastest rate in a quarter-century. Five trillion dollars of Americans’ household wealth had evaporated in just 12 weeks as stocks, pensions, and home values plummeted. We were losing an average of 700,000 jobs each month, equivalent to the population of the State of Vermont. The capital and credit markets, integral to the normal functioning of our economy, were virtually frozen. The fear among economists—from across the political spectrum—was that we risked sinking into a second Great Depression.

Immediately, we undertook a series of difficult steps to prevent that outcome. We acted to get lending flowing again so that businesses could get loans to buy equipment and ordinary Americans could get financing to buy homes and cars, go to college, and start or run businesses. We enacted measures to foster greater stability in the housing market, help responsible homeowners stay in their homes, and help to stop the broader decline in home values. To achieve this, and to prevent an economic collapse that would have affected millions of additional families, we had no choice but to use authority enacted under the previous Administration to extend assistance to some of the very banks and financial institutions whose actions had helped precipitate the turmoil. We also took steps to prevent the rapid dissolution of the American auto industry—which faced a crisis partly of its own making—to prevent the loss of hundreds of thousands of additional jobs during an already fragile time. Many of these decisions were not popular, but we deemed them necessary to prevent a deeper and longer recession.

Even as we worked to stop the economic freefall and address the crises in our banking sector, our housing market, and our auto industry, we also began attacking the economic crisis on a broader front. Less than 1 month after taking office, we enacted the most sweeping economic recovery package in history: the American Recovery and Reinvestment Act. The Recovery Act not only provided tax cuts to small businesses and 95 percent of working families and provided emergencyrelief to those out of work or without health insurance; it also began to lay a new foundation for longterm economic growth and prosperity. With investments in health care, education, infrastructure, and clean energy, the Recovery Act both saved and created millions of jobs and began the hard work of transforming our economy to thrive in the modern, global marketplace and reverse the financial2 THE BUDGET MESSAGE OF THE PRESIDENT

decline working families experienced in the last decade. Because of these and other steps, we can safely say we have avoided the depression many feared, and we are no longer facing the potential collapse of our financial system. But our work is far from complete.

First and foremost, there are still too many Americans without work. The steps we have taken have helped stop the staggering job losses we were experiencing at the beginning of last year. But the damage has been done. More than seven million jobs were lost since the recession began 2 years ago. This represents not only a terrible human tragedy, but also a very deep hole from which we have to climb out. Until our businesses are hiring again and jobs are being created to replace those we have lost—until America is back at work—my Administration will not rest and this recovery will not be

finished.

That is why this Budget includes plans to encourage small businesses to hire as quickly and effectively as possible, to make additional investments in infrastructure, and to jump-start clean energy investments that will help the private sector create good jobs in America.

Long before this crisis hit, middle-class families were under growing strain. For decades, Washington failed to address fundamental weaknesses in the economy: rising health-care costs, a growing dependence on foreign oil, and an education system unable to prepare our children for the jobs of the future. In recent years, spending bills and tax cuts for the wealthy were approved without paying for any of it, leaving behind a mountain of debt. And while Wall Street gambled without regard for the consequences, Washington looked the other way.

As a result, the economy may have been working very well for those at the very top, but it was not working for the middle class. Year after year, Americans were forced to work longer hours and spend more time away from their loved ones, while their incomes flat-lined and their sense of economic security evaporated. Beneath the statistics are the stories of hardship I’ve heard all across America. For too many, there has long been a sense that the American dream—a chance to make your own way, to support your family, save for college and retirement, own a home—was slipping away. And this sense of anxiety has been combined with a deep frustration that Washington either didn’t notice, or didn’t care enough to act.

Those days are over. In the aftermath of this crisis, what is clear is that we cannot simply go back to business as usual. We cannot go back to an economy that yielded cycle after cycle of speculative booms and painful busts. We cannot continue to accept an education system in which our students trail their peers in other countries, and a health-care system in which exploding costs put our businesses at a competitive disadvantage and squeeze the incomes of our workers. We cannot continue to ignore the clean energy challenge and stand still while other countries move forward in the emerging industries of the 21st Century. And we cannot continue to borrow against our children’s future, or allow special interests to determine how public dollars are spent. That is why, as we strive to meet the crisis of the moment, we are continuing to lay a new foundation for the future.

Already, we have made historic strides to reform and improve our schools, to pass health insurance reform, to build a new clean energy economy, to cut wasteful spending, and to limit the influence of lobbyists and special interests so that we are better serving the national interest. However, there is much left to do, and this Budget lays out the way ahead.THE BUDGET FOR FISCAL YEAR 2011 3

Because an educated workforce is essential in a 21st Century global economy, we are undertaking a reform of elementary and secondary school funding by setting high standards, encouraging innovation, and rewarding success; making the successful Race to the Top fund permanent and opening it up to innovative school districts; investing in educating the next generation of scientists and engineers; and putting our Nation closer to meeting the goal of leading the world in new college graduates by 2020. Moreover, since in today’s economy learning must last a lifetime, my Administration will reform the job-training system, streamlining it and focusing it on the high-growth sectors of the economy.

Because even the best-trained workers in the world can’t compete if our businesses are saddled with rapidly increasing health-care costs, we’re fighting to reform our Nation’s broken health insurance system and relieve this unsustainable burden. My Budget includes funds to lay the groundwork for these reforms—by investing in health information technology, patient-centered research, and prevention and wellness—as well as to improve the health of the Nation by increasing the number of primary care physicians, protecting the safety of our food and drugs, and investing in critical

biomedical research.

Because small businesses are critical creators of new jobs and economic growth, the Budget eliminates capital gains taxes for investments in small firms and includes measures to increase these firms’ access to the loans they need to meet payroll, expand their operations, and hire new workers.

Because we know the nation that leads in clean energy will be the nation that leads the world, the Budget creates the incentives to build a new clean energy economy—from new loan guarantees that will encourage a range of renewable energy efforts and new nuclear power plants to spurring the development of clean energy on Federal lands. More broadly, the Budget makes critical investments that will ensure that we continue to lead the world in new fields and industries: doubling research and development funding in key physical sciences agencies; expanding broadband networks across our country; and working to promote American exports abroad.

And because we know that our future is dependent on maintaining American leadership abroad and ensuring our security at home, the Budget funds all the elements of our national power—including our military—to achieve our goals of winding down the war in Iraq, executing our new strategy in Afghanistan, and fighting al Qaeda all over the world. To honor the sacrifice of the men and women who shoulder this burden and who have throughout our history, the Budget also provides significant resources, including advanced appropriations, to care for our Nation’s veterans.

Rising to these challenges is the responsibility we bear for the future of our children, our grandchildren, and our Nation. This is an obligation to change not just what we do in Washington,

but how we do it.

As we look to the future, we must recognize that the era of irresponsibility in Washington must end. On the day my Administration took office, we faced an additional $7.5 trillion in national debt by the end of this decade as a result of the failure to pay for two large tax cuts, primarily for the wealthiest Americans, and a new entitlement program. We also inherited the worst recession since the Great Depression—which, even before we took any action, added an additional $3 trillion to the national debt. Our response to this recession, the Recovery Act, which has been critical to restoring economic growth, will add an additional $1 trillion to the debt—only 10 percent of these costs. In total, the surpluses we enjoyed at the start of the last decade have disappeared; instead, we are $12 trillion deeper in debt. In the long term, we cannot have sustainable and durable economic growth without getting our fiscal house in order.4 THE BUDGET MESSAGE OF THE PRESIDENT

That is why even as we increased our short-term deficit to rescue the economy, we have refused to go along with business as usual, taking responsibility for every dollar we spend, eliminating what we don’t need, and making the programs we do need more efficient. We are taking on health care—the single biggest threat to our Nation’s fiscal future—and doing so in a fiscally responsible way that will not add a dime to our deficits and will lower the rate of health-care cost growth in the long run.

We are implementing the Recovery Act with an unprecedented degree of oversight and openness so that anyone anywhere can see where their tax dollars are going. We’ve banned lobbyists from serving on agency advisory boards and commissions, which had become dominated by special interests. We are using new technology to make Government more accessible to the American people. And last year, we combed the budget, cutting millions of dollars of waste and eliminating excess wherever we could—including outdated weapons systems that even the Pentagon said it did not want or need.

We continued that process in this Budget as well, streamlining what does work and ending programs that do not—all while making it more possible for Americans to judge our progress for themselves. The Budget includes more than 120 programs for termination, reduction, or other savings for a total of approximately $23 billion in 2011, as well as an aggressive effort to reduce the tens of billions of dollars in improper Government payments made each year.

To help put our country on a fiscally sustainable path, we will freeze non-security discretionary funding for 3 years. This freeze will require a level of discipline with Americans’ tax dollars and a number of hard choices and painful tradeoffs not seen in Washington for many years. But it is what needs to be done to restore fiscal responsibility as we begin to rebuild our economy.

In addition to closing loopholes that allow wealthy investment managers to not pay income taxes on their earnings and ending subsidies for big oil, gas, and coal companies, the Budget eliminates the Bush tax cuts for those making more than $250,000 a year and devotes those resources instead to reducing the deficit. Our Nation could not afford these tax cuts when they passed, and it cannot

afford them now.

And the Budget calls for those in the financial sector—who benefited so greatly from the extraordinary measures taken to rescue them from a crisis that was largely of their own making— to finally recognize their obligation to taxpayers. The legislation establishing the Troubled Asset Relief Program (TARP) included a provision requiring the Administration to devise a way for these banks and firms to pay back the American taxpayer. That is why in this Budget we have included a fee on the largest and most indebted financial firms to ensure that taxpayers are fully compensated for the extraordinary support they provided, while providing a deterrent to the risky practices that

contributed to this crisis.

Yet even after taking these steps, our fiscal situation remains unacceptable. A decade of irresponsible choices has created a fiscal hole that will not be solved by a typical Washington budget process that puts partisanship and parochial interests above our shared national interest. That is why, working with the Congress, we will establish a bipartisan fiscal commission charged with identifying additional policies to put our country on a fiscally sustainable path—balancing the Budget, excluding interest payments on the debt, by 2015.THE BUDGET FOR FISCAL YEAR 2011 5

This past year, we have seen the consequences of those in power failing to live up to their responsibilities to shareholders and constituents. We have seen how Main Street is as linked to Wall Street as our economy is to those of other nations. And we have seen the results of building

an economy on a shaky foundation, rather than on the bedrock fundamentals of innovation, small business, good schools, smart investment, and long-term growth.

We have also witnessed the resilience of the American people—our unique ability to pick ourselves up and forge ahead even when times are tough. All across our country, there are students ready to learn, workers eager to work, scientists on the brink of discovery, entrepreneurs seeking the chance to open a small business, and once-shuttered factories just waiting to whir back to life in burgeoning

industries.

This is a Nation ready to meet the challenges of this new age and to lead the world in this new century. Americans are willing to work hard, and, in return, they expect to be able to find a good job, afford a home, send their children to world-class schools, receive high-quality and affordable health care, and enjoy retirement security in their later years. These are the building blocks of the middle class that make America strong, and it is our duty to honor the drive, ingenuity, and fortitude of the American people by laying the groundwork upon which they can pursue these dreams and realize the promise of American life.

This Budget is our plan for how to start accomplishing this in the coming fiscal year. As we look back on the progress of the past 12 months and look forward to the work ahead, I have every confidence that we can—and will—rise to the challenge that our people and our history set for us.

These have been tough times, and there will be difficult months ahead. But the storms of the past are receding; the skies are brightening; and the horizon is beckoning once more.



## B ara c k 

## O b ama



### T he 

### W hi t e 

### H o u se


### , F e b r u ary 

### 1, 2010.7 When the President took office on January 20, 2009, the economy was on the brink of a poten

tially severe depression. Real GDP fell at a 5.4 percent annual rate in the fourth quarter of 2008 and at a 6.4 percent annual rate in the first quar

ter of 2009 (see Figure 1, Real GDP).

Employment, which had been falling by less than 150,000 jobs per month before September 2008, declined by an average of 622,000 jobs per month from October through March. Altogether, in the fourth quarter of 2008, the country lost 1.7 million jobs—the largest quarterly decline

since the end of World War II and a number only to be exceeded by the next quarter, when 2.1 million jobs were lost (see Figure 2, Nonfarm Payroll Employment). By January 2009, the underemployment rate, which measures all those out of work or underemployed for economic reasons, rose to 14 percent. Consumer confidence plummeted. Housing starts hit a record low, and the number of homes in foreclosure grew significantly. As financial markets collapsed, Americans lost their jobs, and the economy shrank, household net worth fell from the third quarter of 2007 to the first quarter of 2009 by $17.5 trillion or 26.5 percent, which is the equivalent to more than one year’s GDP.

This decline was not simply the result of a nor

mal downturn in the business cycle; indeed, the

more fundamental cause was a meltdown in our credit and capital markets precipitated by a per

fect storm of excessive risk-taking, inadequate disclosure, non-existent or myopic oversight, market gatekeepers compromised by conflicts of interest, and irresponsible lending to hundreds of thousands of Americans. Through sophis

ticated financial engineering, these bad loans made their way onto the books of some on Wall Street, and were then sold to investors all over the world. Once the real estate market cooled, loans defaulted at alarming rates, and the credit

boom unraveled.

The resulting collapse laid low some of the most prominent financial institutions in the American economy, wiped out trillions of do llars in wealth and retirement savings, and created a level of uncertainty that brought our finan

cial system to the brink of collapse. A lack of confidence in the economy and in the financial system effectively froze the credit markets, preventing businesses from expanding, and families from financing a new home or college education; and caused massive job loss and

economic contraction.

The Administration, consequently, entered office facing twin trillion-dollar deficits. The first was the gap between what the economy could be producing and what it was producing; this GDP gap totaled $1 trillion for 2009, or approximately 7 percent of the economy. The second was the budget deficit, estimated to be $1.3 trillion on the day the President took office, or 9.2 percent of GDP. And the budget deficit over the following decade—driven by the previous Administration’s decisions not to offset three large domestic initiatives (the tax cuts of 2001 and 2003, as well as the Medicare prescription drug benefit) and the effects of the economic collapse and the efforts needed to combat it—produced this historically large 10-year deficit, totaling more

than $8 trillion. 

# RESCUING THE ECONOMY8 RESCUING THE ECONOMY

Facing this economic crisis, the Administration moved swiftly to take a series of extraordinary, but necessary, steps to pull the economy back from the brink. Because of these efforts, the im

mediate crisis has passed, the economy is on the path toward recovery, and we are laying a new foundation for long-term economic growth.



### Jumpstarting the Economy: The American Recovery and
Reinvestment Act

When the Administration took office, it became clear that there

was a substantial shortfall between what the economy could produce and what it was producing. Econo

mists across the spectrum agreed that substantial steps needed to be

taken to bolster macroeconomic de

mand, jumpstart economic activity, and break a potentially vicious re

cessionary cycle. With traditional monetary policy levers largely ex

hausted, the Administration moved rapidly to sign into law, just 28 days after taking office, the American Re

covery and Reinvestment Act (the Recovery Act) to create and save jobs, as well as transform the econ

omy to compete in the 21st Century.

The Recovery Act contains three parts. Approximately one-third— or $288 billion—is dedicated to tax

cuts for small businesses and 95 percent of working families. An

other third—or $224 billion—is for emergency relief for those who have borne the brunt of the recession; for example, more than 17 million

Americans benefited from extended or increased unemployment benefits

and health insurance was made 65 percent less expensive for laid-off workers and their families who rely on COBRA. In addition, aid to State and local governments helped them to close budget short

falls, saving the jobs of hundreds of thousands of teachers, firefighters, and police officers. The final third is for investments to create jobs, spur eco

nomic activity, and lay the foundation for future sustained growth.

**Nov-06 Nov-07**  **Nov-08 Nov-09**  **-800 -700**  **-600 -500**  **-400 -300**  **-200 -100**  **0 100**  **200 300**  **400 Monthly change of jobs in thousands**  

## Figure 2. Nonfarm Payroll Employment

Source: CEA Notes on Employment and Unemployment, December 2009. **07:Q1 Q2 Q3 Q4 08:Q1 Q2 Q3 Q4 09:Q1 Q2 Q3 -8**  **-6 -4**  **-2 0**  **2 4**  **6 Percent change from preceding quarter (annual rate)**  

# Figure 1. Real GDP

3.2

2.1 3.6

-0.7 1.2

-5.4 -2.7 1.5

-6.4 2.2

-0.7

Source: Bureau of Economic Analysis 12/22/2009.THE BUDGET FOR FISCAL YEAR 2011 9

The Administration committed itself to imple

menting the Recovery Act with unprecedented accountability and transparency. In addition to an independent Recovery Board to monitor the program, the Act required recipients of Recovery funds to report quarterly on the amount of mon

ies spent, the status of each project, the number of jobs created and/or saved, and other relevant details. This information is available for public scrutiny on the Recovery.gov website.

The effects of the Recovery Act on families, businesses, and the economy as a whole have been significant. In the 10 months since the Recovery Act was signed into law, the Adminis

tration cut taxes for 95 percent of working fam

ilies through the Making Work Pay Tax Credit, which amounted to $37 billion in tax relief for 110 million working families over that time period. To help prevent cuts to Medicaid pro

grams across the country, more than $40 billion was disbursed. Also, nearly $60 billion in fund

ing for education was provided which helped to create or save more than 300,000 education jobs nationwide.

To create jobs now and build the infrastructure needed to support the jobs of the 21st Century, the Recovery Act already has funded more than 12,000 transportation construction projects nationwide, ranging from highway construction to airport improvement projects; begun or accelerated work at more than 50 Superfund sites from the Environmental Protection Agency’s National Priority List; and started more than 2,000 construction and improvement projects at over 350 military facilities nationwide. To build America’s competitiveness in the emerging industries oftomorrow, the Administration has made multibillion dollar investments in innovation, science, and technology including: $2.4 billion in grants to companies and educational institutions in over 20 States to fund 48 new advanced battery manufacturing, transportation electrification, and electric drive vehicle projects that will help power the next generation of advanced vehicles; $3.4 billion in grants to private companies, utilities, manufacturers, and cities to fund smart energy grid projects that will support tens of thousands of jobs and benefit consumers in 49 States; and more than $5 billion in grants to fund 12,000 cutting-edge medical research projects at research and educational institutions in every State across the country.

It is worth noting that in several cases, the Government Accountability Office has found that Recovery Act projects are coming in under budget, allowing funds to support more projects, assist more communities, and help create more jobs. For instance, the Federal Aviation Admin

istration (FAA) initially committed $1.1 billion to 300 airport improvement projects; since those projects have come in $200 million below esti

mate, the FAA can now fund an additional 60 airport projects. Similarly, Department of De

fense construction contracts are coming in about 12 percent under-budget, representing hundreds of millions of dollars in savings that will fund additional projects and further spur economic growth.

All told, as of the end of November 2009, about 50 percent of Recovery Act funds—or $395 bil

lion—has been either obligated or is providing assistance directly to Americans in the form of tax relief. By design, the bulk of the remain

ing 50 percent of Recovery Act funds will be de

ployed in the coming months of 2010 and during the beginning of 2011 to support additional job creation when our economy continues to need a boost. Many of the programs slated to receive ad

ditional funding in the near future are those with significant promise of job creation. These include more than $7 billion in broadband expansion, ap

proximately $8 billion in funds to lay the founda

tion for a high-speed rail network, and continued funding for other transportation projects. All told, the Recovery Act is on track to meet the goal of disbursing 70 percent of its funds in the first 18

months of its life.

Taken together, the fiscal relief, tax cuts and other direct assistance, and funding of critical infrastructure projects have had a substantial effect on the economy. Following implementation of the Recovery Act, the trajectory of the economy changed dramatically. Government and private-10 RESCUING THE ECONOMY

sector estimates suggest that the Recovery Act added two to three percentage points to real GDP growth in the second quarter of 2009, and three to four percentage points to growth in the third quarter of that year. Considering that real GDP growth for the third quarter of 2009 was 2.2 percent, many independent experts and forecasters agree that all the economic growth in that quarter was attributable—either directly or indirectly—to the Recovery Act.

In addition, there is evidence that the Recov

ery Act helped prevent the unemployment rate from climbing even higher over the past year. The Council of Economic Advisers (CEA), Con

gressional Budget Office (CBO), and private forecasters estimate that the Recovery Act in

creased employment relative to what would have occurred without the Act by between 900,000 and 1.5 million jobs over the second and third quarters of 2009.



### Health Insurance Reform

As part of the Recovery Act, the Administra

tion made a down payment on one of the most important unmet challenges facing the Nation and burdening the economy: the rising costs of

health care.

Health care is consuming an ever-increasing amount of our Nation’s resources: in 1970, health care expenditures were 7 percent of GDP; as of 2008, they exceeded 16 percent; and at this rate are projected to hit 20 percent by 2017. For indi

viduals with health insurance, there is a strain on their family budgets. In fact, the past decadesaw dramatic increases in premiums that far outstripped gains in wages. Not only is this burden felt directly when these bills are due, but it also is felt indirectly as take-home pay is constrained by these increasing health insurance costs. More

over, many with insurance run the risk that when they need care, their coverage could be dropped; that if they leave their job, they will not be able to find affordable coverage or any coverage at all because of a pre-existing condition; or that they will be forced into bankruptcy due to huge un

paid medical bills. Finally, those without any health insurance present both a moral burden and real financial cost on us all as every time an uninsured person walks into an emergency room because there is nowhere else to turn, a hidden

tax is imposed on other citizens as premiums go up. For State governments, these rising costs crowd out expenditures on other vital services such as higher education and law enforcement.

While the United States spends more per capita on health care than any other developed nation, it is not always clear that we are receiving bet

ter care. On many metrics, other developed na

tions surpass us on health outcomes. In addition, several academic studies suggest that we spend as much as $700 billion a year on health care that does little or nothing to improve patients’ health. Wide variation in health care practices among regions, States, cities, and even among health care providers within these localities gen

erates significant differences in health outcomes and costs—with the high-cost medical centers not necessarily generating better outcomes than the

lower-cost ones.

Recognizing that the current situation is not sustainable for families, businesses, and the Nation as a whole and that our long-term fiscal and economic health depend on bringing down the costs of health care, the President launched a health insurance reform effort last year.

First, in the Recovery Act itself, the Adminis

tration included funding critical to transform

ing the health care system into one that delivers better care, not just more care. Specifically, it included a program to spur an effort to computer

ize Americans’ health records in five years, and do so in a way that rigorously protects patient privacy and helps to reduce health care costs in the long run. Because in so many areas of medi

cal care, providers lack basic data on which inter

ventions work and which do not, the Act provided $1.1 billion for patient-centered health research. And since chronic diseases that are manageable and preventable contribute disproportionately to poor health and rising costs, the AdministrationTHE BUDGET FOR FISCAL YEAR 2011 11

made an unprecedented $1 billion investment in prevention and wellness interventions.

Second, working with the Congress, the Ad

ministration has brought the Nation closer to

health insurance reform than ever before. The bills passed by both chambers of Congress will give Americans with health insurance the sta

bility and security they need by protecting con

sumers from being denied coverage based on pre-existing conditions or seeing it dropped or di

luted once one falls ill. The legislation creates a health insurance exchange to increase consumer choice and provide affordable coverage for indi

viduals and small businesses, and expands cover

age to more than 30 million Americans. It will reduce the growth of health care costs for Ameri

can families, seniors, and businesses. The bills also include important reforms that will end in

surer abuses, hold insurance companies account

able, and enhance consumer rights. They include overdue reforms of the health care delivery sys

tem that will strengthen Medicare and improve quality of care for all Americans. And they put in place mechanisms to keep the system dynamic and responsive to changing market conditions.

Finally, the legislation meets the President’s standard of changing the way Washington is do

ing business by paying for major new initiatives so they do not add to our Nation’s debt. Indeed, the legislation meets the President’s demand that health care reform not add to budget defi

cits in the first 10 years (and, in fact, it reduces them), and of reducing deficits thereafter. Deficit neutrality is accomplished by relying on tangible, accountable savings—as scored by the indepen

dent CBO—to pay for health insurance reform, such as savings from Medicare and revenue mea

sures. The legislation also includes potentially more important cost-savings from transforming the health care delivery system, which will un

doubtedly help to improve our long-term fiscal standing—even if it is challenging to quantify by precisely how much.

Fiscally-responsible health insurance reform is a critical part of the recovery of the Nation’s economy. Our fiscal future is so dominated by health care that if we can slow the rate of cost growth by just 15 basis points per year (0.15 per

centage points per year), the savings on Medi

care and Medicaid alone would equal the impact from eliminating Social Security’s entire 75-year shortfall. Undertaking health insurance reform at this moment is an important step toward put

ting the country on a more solid foundation for economic growth.



### Reviving the Financial System and Critical Sectors of the Economy

Along with reviving macroeconomic demand,

the Administration was forced to take extraordi

nary, and sometimes understandably unpopular, steps to help revive the credit and capital mar

kets and restore trust in the financial system. At the beginning of 2009, the financial system was extremely fragile. The viability of major financial institutions remained in doubt and vital aspects of the financial system were deeply impaired— preventing the flow of credit that small firms need to grow and families need to buy a home or car, attend college, or start a business. With the risk that inaction could lead to an even deeper downturn, the Administration implemented a plan to restore financial stability that, in conjunc

tion with fiscal stimulus, has helped to stabilize financial markets and the economy and pull the financial system back from the brink of systemic collapse.



### Financial Stabilization

Upon taking office, the Administration under

took a comprehensive, forceful, and sustained commitment to stabilize the financial system, as

sist in the cleanup of legacy assets, jumpstart the provision of new credit for households and busi

nesses, and support distressed housing markets. The Administration’s Financial Stability Plan helped to shore up confidence in our financial in

stitutions and markets, while mobilizing private capital—especially in the wake of the “stress test” conducted of major financial institutions. The

Administration also redirected the focus of the12 RESCUING THE ECONOMY

Troubled Asset Relief Program (TARP) from large financial institutions to households, small banks, and small businesses (see Figure 3, TARP Invest

ments in Banks). Indeed, since the President took office, only $7 billion in TARP funds have been provided to banks—much of it to smaller institu

tions—while major banks subject to the “stresstest” have raised more than $140 billion in highquality capital from the private sector.

As financial markets have stabilized and pri

vate capital has replaced Government capital, many of the initial programs created under TARP have become unnecessary, and institutions have begun to repay Federal money deployed through TARP programs. As of December 31, 2009, Trea

sury received $165 billion in TARP repayments, and taxpayers also have received about $17 billion in interest, dividends, and capital gains through

the sale of warrants.

At the height of the crisis, the Treasury guaran

teed that Americans would get back at least what they had invested in money market funds that participated in its temporary guarantee pr ogram. The program achieved its purpose, and it was terminated in September 2009. Not only did it not cost the taxpayers a dime; it earned them $1.2

billion in fees.

As we move from rescue to recovery and as financial stabilization funds are being repaid, the Administration has developed a four-step exit strategy for modifying TARP to assist in re

building of the economy. First, we will continue winding down or terminating many of the Gov

ernment programs put in place to address the crisis—a process that already is well underway. Second, we will limit future commitments to pre

serving home ownership, stimulating credit for small businesses, and supporting securitization

markets which facilitate consumer and small business loans that promote job creation and eco

nomic growth. Third, beyond these limited new commitments, we will not use remaining stabi

lization funds unless necessary to respond to an immediate and substantial threat to the economy stemming from financial instability. Fourth, we will continue to carefully manage the equity in

vestments acquired during this extraordinary pe

riod in a cost-effective manner, while protecting taxpayers and unwinding those investments as soon as practicable.



### Housing

The steps taken to stabilize housing markets and help distressed homeowners represent an

other important element of the Administration’s policy response. For the thousands of responsible homeowners who are facing foreclosure or are at risk of losing their homes, the Administration undertook a number of efforts to help them. On 

### Figure 3. TARP Investments in Banks

(In billions of dollars)

Commitments

Pre-Jan 20th Jan 20-

Present 1 Total 2 Repayments

Existing Programs:

Large Banks 3

....................................................................... 230 2 232 114

Small Banks 4

........................................................................ 9 5 14 2

Total

.............................................................................................. 239 7 246 116

Common Equity and Other Regulatory Capital Raised by the Largest Banks Since “Stress Test” Results Were Announced in May

............................................................................................. 114

1 Estimates as of December 9, 2009.

2 Estimates may not sum to total due to rounding.

3 CPP, AGP, TIP. Large banks are defined as banks with total assets of over $10 billion.

4 CPP. Source: Department of the Treasury.THE BUDGET FOR FISCAL YEAR 2011 13

February 18, 2009, the Adminis

tration announced the Homeowner Affordability and Stability Plan, a broad set of programs designed to stabilize the U.S. housing market and keep millions of homeowners

in their homes.

First, the Administration took action to stabilize the housing mar

ket, in part by making mortgages more affordable. Continued sup

port for Fannie Mae and Freddie Mac and the Treasury’s Mortgage Backed Securities (MBS) purchase program, along with $1.1 trillion in MBS purchases by the Federal Reserve, have helped to keep inter

est rates at historic lows (see Figure 4, Conventional 30-year Mortgage Rate). More than 3 million Ameri

cans have taken advantage of these lower rates in 2009 to save money through refinancing. In addition, the Federal Housing Administration

has increased its market presence significantly to enable many Americans to purchase homes.

Second, the Administration is working t o provide increased access to financing for State and local housing finance agencies, which provide sustainable homeown

ership and rental resources, for work

ing Americans in all 50 States. In addition, the $8,000 first-time home

buyer tax credit has helped hundreds of thousands of Americans purchase homes. The Recovery Act also support

ed the Low Income Housing Tax Credit market by creating an innovative Trea

sury Tax Credit Exchange Program and providing gap financing through the Department of Housing and Urban Development’s Tax Credit Assistance Program. In combination, these pro

grams are estimated to provide over $5 billion in support for affordable rental housing. In addition, the Recovery Act provided $2 billion in support for the Neighborhood Stabilization Program, which is designed to rebuild value in areas hard

est hit by foreclosures; this amount is on top of the $4 billion provided for the program in the Housing and Economic Recovery Act of 2008.

Third, the Administration initiated the Home Affordable Modification Program (HAMP), which provides eligible homeowners the opportunity to **1985 1988 1991 1994 1997 2000 2003 2006 2009 4**  **5 6**  **7 8**  **9 10**  **11 12**  **13 14**  

## Figure 4. Conventional 30-Year **Mortgage Rate Percent** 

**Indicates Recession**

Source: Federal Reserve.

**50,130 143,276**  **253,673 386,865**  **487,081 650,994**  **728,408**

**May and**

**Prior June July August September October November**  **0 100,000**  **200,000 300,000**  **400,000 500,000**  **600,000 700,000**  **800,000** 

## Figure 5. HAMP Active Trial and **Permanent Modifications, 2009**

**Cumulative, by month**

Source: http://www.financialstability.gov/docs/MHA%20Public%20121009%20Final.pdf14 RESCUING THE ECONOMY

significantly reduce their monthly mortgage pay

ment, remain in their homes, and prevent avoid

able foreclosures (see Figure 5, HAMP Active Trial and Permanent Modification). Through November 2009, more than 725,000 borrowers are in active modifications, saving an average of more than $550 a month on their monthly mort

gage payments. Servicers report that more than 1 million borrowers have received offers to begin trial modifications. HAMP is designed to offer a second chance to as many as 4 million borrow

ers by the end of 2012, averaging more than 20,000 trial modifications started per week. To facilitate this and other efforts, the Administra

tion is working to improve the application pro

cess, develop operational measurements to hold servicers accountable for their performance, and enhance borrower resources to provide direct ac

cess to tools and housing counselors. Finally, the Administration is working with homeowners to help them through the process of converting tem

porary modifications into permanent ones.

More work needs to be done, and there are still market risks. But there are clear signs that our efforts are having an impact. We will continue to monitor this key component of the economy and work to keep responsible homeowners in their

homes.



### Automobile Industry

The freezing up of the credits markets in the fall of 2008 made it hard for many households to finance the purchase of motor vehicles. This diffi

culty, exacerbated by the rapid deterioration in the broader economy, led to reduced demand for mo

tor vehicles, causing considerable financial stress to automobile companies, particularly General Motors (GM) and Chrysler. Without Government intervention, GM and Chrysler would have liqui

dated, causing widespread and devastating effects throughout the auto industry. Importantly, the re

percussions of such liquidations could have includ

ed immediate and long-term damage to the U.S. manufacturing/industrial base, a significant in

crease in unemployment with direct harm to those both directly and indirectly related to the auto sec

tor, and further damage to our financial system, since automobile financing constitutes a material portion of overall financial activity. Facing what risked becoming the last straw for an economy al

ready severely weakened, the President made the

difficult decision to offer assistance to the auto in

dustry in an effort to prevent a further economic

meltdown that could have hurt millions of fa milies.

However, the President’s offer of financial as

sistance was coupled with a requirement that GM and Chrysler develop serious restructuring plans that would address prior business failings and put the companies on a path to financial viability without Government assistance. After rejecting GM and Chrysler’s initial plans and requiring all stakeholders to make additional sacrifices, the Administration accepted new restructuring plans

from these two manufacturers.

In exchange for the assistance provided, the Government obtained from GM $8.8 billion in debt obligations and preferred stock along with a 60.8 percent share of the common equity in the new GM. From Chrysler, the Government obtained a $7.1 billion debt security note and 9.9 percent of Chrysler’s common stock. In November 2009, GM announced that it would begin repaying the U.S. Treasury faster than anticipated, and made its first $1 billion repayment in December 2009.

To further assist the auto industry as well as the economy as a whole, the Administration also launched the Car Allowance Rebate System (CARS)—or “Cash for Clunkers”—program to ac

celerate demand for new automobiles. The pro

gram, signed into law by President Obama on June 24, provided bonuses of $3,500 to $4,500 to buyers who traded in automobiles with mileage ratings of 18 miles per gallon or below, if they purchased a new car or truck with improved mileage ratings. The Cash for Clunkers program boosted auto sales by nearly 500,000 units between July and August 2009, adding about $3.5 billion to the GDP. The CEA estimates that because of the program, employ

ment in the second half of 2009 was about 70,000 job-years higher than it would otherwise have been. As an additional benefit, the program accelerated the replacement of high-polluting “clunker” motorTHE BUDGET FOR FISCAL YEAR 2011 15

vehicles with cleaner, higher-efficiency vehicles (see Figure 6, U.S. Light Motor Vehicle Sales).

While there is more to be done to assure finan

cial stability, these steps have allowed us to move from the rescue phase to the next phase of reha

bilitation and rebuilding. Even as we roll back emergency measures that are no longer needed,

the Administration remains steadfast in its com

mitment to preserve the stability of the financial system. Some Government programs will stay in place to serve as a bulwark against unforeseen events and to provide confidence in our financial markets. Overall, however, the Administration be

lieves that we are past the point of having to provide emergency relief, and looks forward to recouping the costs of these extraordinary efforts.



### Rising to the Challenges
Ahead

As a result of our steps to support the financial system, confidence has improved, credit is easing, and the economy is growing. Moreover, the Government is exiting from its emergency financial policies, and taxpayers are being repaid. Indeed, the ultimate cost of those policies is likely to be significantly lower than previously expected. The Adminis

tration now estimates that TARP will cost about $117 billion—$224 billion less than was project

ed in the 2010 Mid-Session Review (see Figure 7, Costs of Troubled Asset Relief Program Actions). For example, we now expect that there will be a positive return on $248 billion of investments in **1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 8**  **10 12**  **14 16**  **18 20**  **22 Millions of units, seasonally adjusted annual rate** 

**Average Sales, 1998-2007** 

## Figure 6. U.S. Light Motor Vehicle Sales

**Monthly Sales**

**September**

**2001 CARS**  **Employee Pricing,**
**Summer 2005**

Source: Department of Commerce (Bureau of Economic Analysis) and CEA Report on Economic Impact of CARS.

**Figure 7. Costs of T**  **roubled Asset Relief Program Actions (Excluding Debt Service) 1**  (In billions of dollars)

TARP Actions 2010 MSR 2011 Budget Change from 2010 MSR to 2011 Budget

TARP Obligations Subsidy

Cost TARP Obligations Subsidy

Cost TARP Obligations Subsidy

Cost

Equity Purchases

..................................................................................... 383.7 158.1 344.1 55.9 –39.6 –102.2 Structured & direct loans and asset-backed security purchases

............. 330.5 133.6 148.6 25.0 –181.9 –108.6 Guarantees of troubled asset purchases 2

.............................................. 12.5 –0.8 5.0 –3.0 –7.5 –2.2 Home Affordable Modification Program (HAMP)

..................................... 50.0 50.0 48.8 48.8 –1.2 –1.2

**Total**

**...............................................................................** 776.7 340.9 546.4 126.7 –230.3 –214.2

Memorandum:

Deficit impact before administrative costs and interest effects 3

�������������������� 340

. 9 116

. 8 –224

. 1

1 Total reflects estimated lifetime TARP obligations and costs through 2020. 2 The 2010 MSR reflected total face value of guarantees of $419 billion. The 2011 Budget reflects the actual face value of $301 billion. 3 The 2011 Budget total dficit impact includes interest on downward reestimates of $9.9 billion.16 RESCUING THE ECONOMY

banks, about two-thirds of which have already been repaid over the past year.

Confidence in the stability of our financial markets and institutions has improved dramati

cally over the past year. Interbank lending rates, which reflect stress in the banking system, have

returned to levels associated with more stable times. For example, the spread of one-month LIBOR to the overnight index swap—a measure of liquidity in the banking system—has fall

en from a peak of about 340 basis points in October 2008 to roughly 10 basis points today (see Figure8, Interbank Lending: LIBOROIS Spread). Credit-default swap spreads for financial institutions,

which measure investor confidence in their health, have also fallen sig

nificantly. An aggregate measure of credit-default swaps for the largest

U.S. banks reached over 450 basis points in October 2008; it is roughly 100 basis points today (see Figure 9, Credit-Default Swap Spreads for Fi

nancial Institutions). As borrowing costs have come down, businesses have raised substantial capital from private sources. Corporations have raised more than $900 billion in invest

ment-grade debt and in excess of $100 billion in high-yield debt this past year. While much of the new issuance early this year was sup

ported by Government guarantees, in recent months private investors have funded most new corporate debt without public support: only 14 percent was guaranteed in Oc

tober, whereas nearly 50 percent of new issuance was guaranteed by the Government in January 2009. The U.S. banking system is much better capitalized today than it was at the height of the crisis. Since

the announcement of the stress test results, the largest banking institutions have raised over $140 billion in high-quality capital and over $60 billion in non-guaranteed unsecured debt in the private markets. Banks have used private capital to repay TARP preferred equity, allowing TARP to fulfill its function as a bridge to private capital. **2006 2007**  **2008 2009**  **0 50**  **100 150**  **200 250**  **300 350**  **400**

**1-Month 3-Month**  **Basis points** 

## Figure 8. Interbank Lending: **LIBOR-OIS Spread**

**Lehman FSP** 

Source: Bloomberg.

**0 100**  **200 300**  **400 500**  **Basis points**



## Figure 9. Credit-Default Swap Spreads for

**Financial Institutions**

**Lehman FSP**

**2006 2007**  **2008 2009** 

Source: Bloomberg.THE BUDGET FOR FISCAL YEAR 2011 17

The market for municipal bonds is also recov

ering from the financial crisis. The Recovery Act included an innovative new tool for municipal financing, Build America Bonds, which are tax

able bonds for which Treasury pays a 35 percent direct subsidy to the issuer to offset borrowing costs. Build America Bonds are now providingState and local governments with access to lowcost financing that is providing them with a much

needed economic boost.

Housing markets likewise are showing some signs of stabilizing, and wealth is recovering; these real improvements in individual-level finances should stimulate consumer spending, which is a vital component to American economic growth. For example, household net worth increased by $2 trillion in the second quarter of 2009, the first increase since the second quarter of 2007.

As credit conditions have improved and with the macroeconomic boost of the Recovery Act, the economy has started to grow again. The economy expanded at an annual rate of 2.2 percent in the third quarter of 2009, and the Blue Chip consen

sus is for 4 percent growth in the fourth quarter. Private economists generally expect moderate growth over the next year, and in line with their estimates the Budget assumes that the economy will grow by an annual rate of 3.0 percent in 2010, and accelerate to approximately 4.25 percent annually over 2011 to

2013.

While the economy has turned a corner, there are still significant challenges that must be addressed.

Home foreclosure and delin

quency rates remain too high (see Figure 10, Residential Mort

gage Delinquency Rates), placing enormous pressure on American

families and homeowners. Bank lending continues to contract overall, although the pace of con

traction has moderated and some categories of lending are growing again. For example, commercial and industrial loans contracted at an annual rate of 27 percent in the third quarter, but 16 percent since then. Such loans are particularly important for small businesses, which generally cannot raise money by issuing debt in securities markets. Without access to capital, business expansion and job

creation will be limited.

Perhaps the biggest challenge facing the econ

omy, as we move from rescue to recovery, is the weak labor market. Far too many workers who would rather be earning a paycheck are on un

employment, left worrying about how to pay their mortgage or the rent, keep their health insur

ance, and continue to provide for their families. In November 2009, the unemployment rate fell to 10 percent and payrolls increased—for the first time since 2007—by 4,000 jobs. In December the unemployment rate remained constant at 10 per

cent, with a loss of 85,000 jobs. The fact that a single month of job gains, followed by a steady unemployment rate, is seen as progress points to the severe job loss the economy had experienced over the course of the recession (see Figure 11, Initial Claims for Unemployment Insurance). **1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 10**  **12 14**  **16 18**  **20 22**  **24 26**  **28**

**2 3**  **4 5**  **6 7** 

**Subprime (left)**

**Conforming (right) Percent**  

## Figure 10. Residential Mortgage **Delinquency Rates Percent** 

Source: Mortgage Bankers of America; NBER.18 RESCUING THE ECONOMY

The typical progression in a recovery is, first, that worker productivity increases as firms try to do more with their existing staff. Then, the number of hours worked increases for already employed workers as the economy picks up. Fi

nally, as growth is sustained, companies begin hiring again. There are signs that this process is beginning to happen with this recovery as well. In the third quarter of 2009, non-farm business sector labor productivity increased by 8.1 percent on an annualized basis, the largest gain in pro

ductivity since the third quarter of 2003. There are signs that hours worked began to rebound in the fourth quarter of 2009. And hiring of tem

porary workers—a reliable leading indicator of full-time hiring—increased substantially in the fourth quarter as well. Unfortunately, the progression to consistent and substantial job growth is not coming soon enough. Sparking job creation in the private sec

tor is an urgent priority, one reflected through

out the Budget and in the policies put forth by the Administration. Americans are willing to work hard, and in return, they expect to be able to find a good job, afford a home, send their kids to a good school, receive high-quality and afford

able health care, and enjoy retirement security in their later years. These are the building blocks of the middle class that makes America strong, and together they constitute the new foundation we seek for our economy. Our challenge is to put politics aside and take the steps now that will de

liver on this promise for all Americans now and in generations to come. 

### Figure 11. Initial Claims for Unemployment Insurance

**4-week moving average, week end 01/02/2010**

**Jan 90 Jan 94**  **Jan 98 Jan 02**  **Jan 06 300**  **360 420**  **480 540**  **600 660**  **720 Thousands (s.a.)** 

**Indicates Recession**

Source: CEA Notes 12/17/2009.19 The economy has been rescued from disaster, and is on the road to recovery. We are no longer facing the potential collapse of our financial sys

tem, and the country has avoided the depression many feared just a year ago. Our economy is growing; our markets are returning to function

ality; and some of the losses of the past year have been restored. These indicators may be hearten

ing to economists, but they are cold comfort to the millions who are out of work, communities

that have seen industries downsized and fac

tories shuttered, and the cities and towns who are finding it hard to provide services to their

residents.

There are 7 million fewer jobs today than when the recession began in December 2007. The immediate effects of being unemployed are felt deeply by the unemployed and their families: bills that are not paid, college tuition payments that are not sent, and homes that are no longer affordable. Moreover, there is growing evidence that unemployment has a lasting effect on these workers’ children too. A range of studies have found that having a parent experience unemployment is closely tied with whether you graduate from high school, whether you go to college, whether you get a job after college, and how much you get paid in that job. And the effect is persistent—with higher high school dropout rates and lower college enrollment rates evident even years later. For those in college and graduating into a recession, studies suggest that it leads to depressed wages in the first year of employment and for years to come. There is also evidence that unemployment has a lasting negative effect on community and civic engagement, not only among the jobless but among their neighbors as well. We cannot sit idly by and allow a generation of Americans to be knocked off course just as they are ready to come into their own. We can

not be content with a recovery that is felt on Wall Street, but not on Main Street. And we cannot be satisfied with business as usual, returning to an economy of boom and bust, easy credit, and reck

less actions that only works for the wealthiest and the well-connected. We must lay a new foun

dation in which innovation and job creation are nurtured, the middle class is strengthened, and economic opportunity is available to all. Doing that entails using this moment of economic re

covery to rebuild our Nation and transform our economy so that we can compete and thrive in

the decades ahead.



### Investing in Job Creation

In the short-term, it is critical that we take steps to jumpstart job creation so that the na

scent economic recovery is one that lifts Ameri

can workers and families. Looking to the future, we know that in the high-tech, interdependent economy of the 21st Century, two of the most pre

cious resources for any nation are the know-how and creativity of its people. Basic research across

the sciences leads to discoveries and technolo

gies that create whole industries, thousands of businesses, and millions of jobs. From bio-tech

nology to information technology, we have seen that happen in our own time. Yet this is not the moment to rest on our past accomplishments; we must support invention and innovation today so that our scientists, engineers, and entrepreneurs can grow these businesses of tomorrow. 

# REVIVING JOB CREATION AND LAYING A NEW

FOUNDATION FOR ECONOMIC GROWTH20 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

At the same time, we need to recognize that our economy is strongest when we tap the potential of all its participants. Small businesses, which over the past 15 years have created roughly 65 percent of all new private sector jobs in America, are critical to the future of our economy. We need to create the conditions whereby if you have a good idea and the drive to act on it, you can open your own store or start your own company. Eco

nomic growth and job creation also must not be limited to our cities and suburbs; rural America too must be able to provide jobs and economic op

portunities to its residents. Hard-working young people in small towns across America should be able to find good jobs and promising opportuni

ties at home. Moreover, we need to recognize that competitive, high-performing regional economies are essential to a strong national economy. That’s why the President announced a broad-based ini

tiative to review how Federal policies impact local communities and to better target and coordinate resources across agencies to promote job creation, environmental sustainability, and broad-based economic growth. Finally, all Americans should

be able to balance the needs of their careers and their families and retire with security. To foster job growth across the economy, the Budget will:

Spur Job Creation. While we are no longer hemorrhaging jobs at the rate we were last year, unemployment is still unacceptably high. Look

ing to the future, the investments made in the Budget in education, clean energy, infrastructure, and in several other areas will lay a new founda

tion for economic growth and job creation. But in the short term, it is clear that the some targeted measures are required to spur private sector job

creation. The Administration will work with the Congress to implement a jobs creation package along the lines the President announced in De

cember of 2009. It will include immediate steps to help small businesses grow and hire, to upgrade and build infrastructure, and create jobs through energy efficiency and clean energy investments. In addition, to help those most affected by the recession, the Budget will extend emergency as

sistance to seniors and families with children, Unemployment Insurance benefits, COBRA tax credits, and relief to States and localities to prevent layoffs.

Provide Small Businesses Access to Cred

it. One of the biggest challenges facing the coun

try as we recover from the economic crisis is giving small businesses access to credit. That is why the Budget provides funds to support $17.5 billion in SBA 7(a) loan guarantees that will help small businesses operate and expand. The Budget also supports $7.5 billion in guaranteed lending for commercial real estate development and heavy machinery purchases; $3 billion in Small Busi

ness Investment Company debentures to support new businesses and new jobs through early-stage and mezzanine small business financing; and $25 million in direct microloans, for intermediaries to provide small loans to emerging entrepreneurs and other promising, but “un-bankable,” borrow

ers. In addition, the Budget proposes to signifi

cantly increase the maximum loan sizes on SBA loans, including an increase from $2 million to $5 million for 7(a) business loans, to further improve

small business access to credit.

Refocus Troubled Asset Relief Program (TARP) Funds to Assist Small Businesses. As we move from rescue to recovery and financial stabilization funds are being repaid, the Trea

sury is redirecting TARP to focus on preserving homeownership and supporting small business lending. The Treasury is working with the Small

Business Administration to refocus funds on a special initiative that—with the support of new legislation—is designed to encourage widespread participation by small banks in increasing lend

ing to small businesses in their communities.

The Administration has also announced a TARP program to increase small business lending in hard-hit areas by providing lower cost capital to Community Development Financial Institutions.

Eliminate Capital Gains Tax on Invest

ments in Small Businesses. Opening up one’s own business is a critical part of the American dream; it is a hallmark of our economy’s vital

ity and an important creator of jobs. To create an incentive for long-term investments in the small business sector, the Budget eliminatesTHE BUDGET FOR FISCAL YEAR 2011 21

capital gains taxes on long-term investments in many small businesses. The American Recovery and Reinvestment Act (Recovery Act) temporar

ily increased the exclusion to 75 percent. The Budget proposes to raise this exclusion to 100 percent, meaning that no income tax whatsoever would be paid on these investments in our Na

tion’s small businesses.

Extend the Making Work Pay Tax Cut. The Recovery Act created the Making Work Pay tax credit, a refundable income tax credit, which off

sets the Social Security payroll tax on up to the first $6,450 of earnings for about 95 percent of all American workers. This helps small business owners struggling to meet expenses, and will put needed money in the pockets of families strug

gling to make ends meet and cover their costs. As part of its plan to restore health to the economy, the Budget proposes to extend the Making Work Pay tax cut for one year.

Promote American Exports to Fuel Eco

nomic Growth. A key component of stable, long-term economic growth is opening up foreign markets to American goods and services. The Budget provides $534 million, a 20-percent in

crease, to the Commerce Department’s Interna

tional Trade Administration, to promote exports from small businesses, help enforce free trade agreements with other nations, eliminate bar

riers to sales of U.S. products, and improve the competitiveness of U.S. firms. The Budget also provides funding to the Export-Import Bank to expand U.S. small business use of the Bank’s fi

nancial export assistance. In addition, the Budget supports expanded action by the Department of Agriculture to overcome sanitary and phyto-san

itary public health and related technical barriers to trade and to assist overseas market develop

ment activities, and provides funds to better pro

tect U.S. intellectual property rights overseas.

Invest in Science Research and Develop

ment. Investment in science and basic research is critical to long-term economic growth. That’s why the Budget invests $61.6 billion in civilian research and development, an increase of $3.7 billion, a 6.4 percent increase, and an amount that continues the commitment to double fund

ing for three key basic research agencies—the National Science Foundation, the Department of Energy’s Office of Science, and the Nation

al Institute of Standards and Technology. This funding includes $1.8 billion for research in basic energy sciences to discover novel ways to produce, store, and use energy to address energy indepen

dence and climate change and $300 million for the Advanced Research Projects Agency-Energy, to accelerate game-changing energy technolo

gies in need of rapid and flexible experimentation or engineering. The Budget includes increased funding for research to help create the foundation for the industries and jobs of the future, such as nano-manufacturing, advanced robotics, and new tools for the design of biological systems.

Increase Funding for Biomedical Re

search. To accelerate progress in biomedical re

search, the Budget continues to support research both on the campuses of the National Institutes of Health (NIH) and for approximately 300,000 scientists and other research personnel at insti

tutions across the country. Investments will focus on priority areas including genomics, translation

al research, science to support health care reform, global health, and reinvigorating the biomedical research community. The Budget also includes $6,036 million to continue to expand research re

lated to cancer, and $143 million to expand re

search related to Autism Spectrum Disorders. Finally, under the President’s Executive Order and subsequent NIH Guidelines for Human Stem Cell Research, NIH approved 40 responsibly-de

rived stem cell lines—nearly double the previous number of lines available—for path-breaking re

search. Additionally, NIH will pursue the discov

ery, development, and pre-clinical testing of novel compounds for the prevention and treatment of symptoms associated with Alzheimer’s disease.

Reinvigorate Space Science and Explora

tion. Leaving the boundaries of our planet has helped to spur innovation and push the bound

aries of scientific knowledge across many fields. Recognizing the importance of space science and exploration, the Administration is propos

ing to cancel the National Aeronautics and Space22 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

Administration’s (NASA’s) Constellation pro

gram—which is based largely on existing tech

nologies and was over budget, behind schedule, and lacking in innovation—and replace it with a bold, new approach to human space flight that embraces commercial industry, forges interna

tional partnerships, and invests in the building blocks of a more capable approach to space explo

ration. This includes: research and development to support future cost-effective, heavy-lift rocket systems; a vigorous new technology development and test program that aims to increase the capa

bilities and reduce the cost of future exploration activities; and the development of precursor ro

botic exploration missions to scout locations and demonstrate technologies to increase the safety and capability of future human missions and pro

vide scientific dividends. To support this effort, the Budget adds $6 billion to NASA’s budget over the next five years.

Enhance Regional Economic Competi

tiveness. Competitive, high-performing region

al economies are essential to national growth. The Budget supports growth strategies based on stronger regional clusters of economic activity through funding across many agencies. The Bud

get provides $75 million in regional planning and matching grants within the Commerce Depart

ment’s Economic Development Administration to support the creation of regional innovation clusters. The SBA will support enhanced small business participation in clusters by awarding competitive grants to promote greater coordina

tion of resources. Recognizing that labor markets are typically regional, yet the workforce system is designed around State and local boundaries, the Department of Labor’s Workforce Innova

tion Fund will support these efforts by facilitat

ing regional collaboration and close linkages with employers so that relevant training leads to good jobs.

Foster Job Creation and Economic Growth

in Rural America. The country as a whole can

not prosper if we do not tap the potential of all Americans—including those who call rural Amer

ica home. That’s why the Budget includes several investments to promote economic growth and job creation in rural communities. First, to support the Rural Innovation Initiative, the Department of Agriculture (USDA) plans to set aside funding to foster rural revitalization through a competi

tive grant program. Second, the Budget supports local and regional food systems through many USDA programs including the Business and In

dustry guaranteed loan program and the Federal State Marketing Improvement Program. Third, the Budget funds a variety of USDA renewable energy programs including support for bio-refin

eries to utilize advanced biomass crops, research designed to create cellulosic and other advanced biofuels, and assistance to help transition fossil fuel-dependent electric utilities to renewable en

ergy—all of which can help a clean energy econ

omy take root in rural America. In addition, the Administration proposes more than $700 million to restore ecosystems and manage public lands, which will increase employment in rural areas, produce new sources of renewable energy, and de

velop recreational opportunities, including fishing and hunting, for local residents and tourists. Fi

nally, the Budget fully funds the Voluntary Public Access and Habitat Incentive Program, which en

courages private landowners to voluntarily open their land to the public for hunting and fishing.

Aid Working Adults in Caring for Their

Families. In today’s economy, working Ameri

cans struggle to find time and money to provide their children and their own parents with the care they deserve. That is why the Budget provides tax relief of up to $2,100—an increase of $900 rel

ative to current law—for middle-class families to pay for the costs of caring for a child or a relative. The Budget also provides a $1.6 billion increase in child care funding for working families with low incomes—not only extending the funding provided in the Recovery Act, but also providing new funding for new slots. In addition, the Bud

get includes $103 million for the Administration on Aging’s Caregiver Initiative, which will help family caregivers better manage their multiple responsibilities and help seniors and people with disabilities live in the community for as long as possible.THE BUDGET FOR FISCAL YEAR 2011 23

Help Americans Prepare for a Secure

Retirement. Too many families have seen their IRAs and their 401(k)s lose value during the recent downturn, and far too many lack retirement savings at all. The Budget includes a series of steps to shore up saving including enhancing transparency and consumer protections, requiring employers who do not offer a retirement plan to give employees the option of making deposits into retirement accounts, doubling the small employer pension plan startup credit for firms that establish a retirement plan, expanding the Saver’s Credit, and reducing barriers to saving for recipients of means-tested programs.

Revitalize Distressed Urban Neighbor

hoods. The Budget reflects an integrated and performance-driven approach to distressed urban neighborhoods, where the challenges tied to jobs, education, public safety, and other needs intersect and compound each other. The Budget includes $250 million for the Department of Housing and Urban Development’s (HUD’s) Choice Neighbor

hoods program, which will target neighborhoods anchored by distressed public or assisted housing with physical and social revitalization grounded in promising, measurable, and evidence-based strategies. Choice Neighborhoods also will coor

dinate with the Department of Justice, which is requesting $40 million for targeted, innovative programs to assist neighborhoods and has a va

riety of other programs to prevent gang violence and assist prisoners re-integrate into the job market and community life. The Budget also in

cludes $2.5 billion for health centers to provide affordable high-quality primary and preventive care to underserved populations, including the

uninsured.

Promote Responsible and Affordable Homeownership. The President’s Budget proposes important reforms to the Federal Housing Administration’s (FHA’s) core mortgage finance programs, including its widely used single-family mortgage insurance product. These reforms will protect taxpayers by replenishing the FHA’s capital reserves, while continuing to promote affordable homeownership and support the recovery of the housing market, which is central to the broader economic recovery. At the same time, these changes will better manage credit risk to the Federal taxpayer. In addition, the Budget supports increased funds for housing counseling. To mitigate the threat of foreclosure for responsible homeowners, the Administration is continuing to implement the Home Affordable Mortgage Program, which will commit up to $50 billion through the Department of the Treasury along with approximately $25 billion through the Government-Sponsored Enterprises. These

funds will offer relief to an estimated 3 to 4 million at-risk homeowners struggling to make their mortgage payments, while preventing communities from suffering the spillover effects of foreclosures. Treasury is also implementing the recently extended and expanded homebuyer tax credit, which supports demand for home sales

in markets nationwide.



### Building the Infrastructure for Job
Creation

For too long, our Nation avoided making the necessary investments in the roads, bridges, le

vees, waterways, communications networks, and transit systems needed to keep pace with

the times. Outdated infrastructure burdens our communities in a number of ways: longer com

mutes, businesses choosing to locate elsewhere including overseas, and growth and job creation held back. Through the Recovery Act, we made the largest investment in our Nation’s infrastruc

ture since President Eisenhower called for the creation of the national highway system half a century ago. In just 10 months since it became law, the Act funded—for example—more than 12,000 transportation projects, and more than 500 new or improved waste and water systems in rural America. This year, funds from the Act will help bring broadband Internet access to remote corners of our country, lay the foundation for a high-speed rail network, and jump-start innova

tive transportation projects through competitive awards. In the 2011 Budget, the Administration

will:24 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

Create a National Infrastructure Innova

tion and Finance Fund. The Budget includes $4 billion to create a National Infrastructure In

novation and Finance Fund to invest in projects of regional or national significance. This marks an important departure from the Federal Gov

ernment’s traditional way of spending on infra

structure through grants to specific States and

localities. The Fund will allocate resources based on demonstrable merit and analytical measures of performance. The Fund will provide planning, feasibility, and analytical capacity to help spon

sors identify high-value projects from around the country and then carefully select the most worth

while projects.

Expand Access to Broadband. During 2011, the Department of Commerce and USDA will focus on administering the $7.2 billion pro

gram to expand broadband deployment, as well as programs to improve broadband adoption and data collection, which were funded by the Recov

ery Act. In addition, the Budget expands access to broadband services by offering $418 million in USDA loans and grants to move rural communi

ties into the modern information economy.

Invest in a Smart, Energy-Efficient, and

Reliable Electric Grid. The Budget continues to support modernization of the Nation’s electric grid by investing in the research, development, and demonstration of smart-grid technologies that will spur the Nation’s transition to a smart

er, stronger, more efficient, and reliable electricsystem. The end result will promote energyand cost-saving choices for consumers, increase efficiency, and foster the growth of renewable en

ergy sources like wind and solar. In addition, the Budget supports the Power Marketing Admin

istrations’ ability to reliably operate, maintain, and rehabilitate the Federal hydropower and transmission systems.

Support Clean Water Infrastructure In

vestments. The 2011 Budget requests $3.3 billion for the Clean Water and Drinking Water State Revolving Funds (SRFs). The Federal SRF funding provides grants to States for low-interest loans to communities through a combination of Federal capitalization, State matches, State lever

aging, interest, and loan repayments. Since loan interest and principal payments are returned to the program, the SRFs continue to generate fund

ing for new loans even without continued Federal funding. For 2011, the Environmental Protection Agency proposes a new approach to helping small drinking water systems, as well as reforms to im

prove the long-term financial, managerial, and environmental sustainability of the SRFs.

Reform Surface Transportation Programs and Put the System on a Viable Financing

Path. Surface transportation programs are at

a crossroads. The current framework for financ

ing and allocating surface transportation invest

ments is not financially sustainable, nor does it effectively allocate resources to meet our critical

national needs. The Administration recommends extending the current authorization through March 2011, during which time it will work with the Congress to reform surface transportation programs and put the system on a viable financing path. Careful consideration is needed to design a Federal surface transportation program that leads to higher-performing investments, increas

es people’s transportation options, and makes our economy more productive. Further, the Federal program must generate the best investments to reduce congestion and improve safety. To do so, the Administration seeks to integrate economic analysis and performance measurement in trans

portation planning so that taxpayer dollars are better targeted and spent.

Establish a New Federal Transit Safety Program. Unlike other mode of transporta

tion, closed-system rail transit services (gener

ally, metro area subways and light rail systems) are not overseen by Federal safety regulators, but rather are subject to review by a patchwork of State safety organizations. Recent deadly ac

cidents—including tragedies in Washington D.C., Boston, and San Francisco—underscore the need for common nationwide safety standards

and for Federal enforcement of these standards. The Budget includes $30 million for a new tran

sit safety oversight program within the Federal Transit Administration (FTA). This will enableTHE BUDGET FOR FISCAL YEAR 2011 25

FTA to implement a comprehensive safety over

sight strategy, as proposed in legislation.

Modernize the Air Traffic Control System. The Budget provides $1.14 billion, more than a 30-percent increase from 2010, for the Next Gen

eration Air Transportation System, the Federal Aviation Administration’s long-term effort to im

prove the efficiency, safety, and capacity of the aviation system. The 2011 Budget will help move from a national ground-based radar surveillance system to a more accurate satellite-based sur

veillance system; aid in the development of more efficient routes through the airspace; and fund improvements in aviation weather information.

Sustain Multi-Year Support for HighSpeed Rail. Building on the historic $8 billion down payment provided through the Recovery Act, the President’s Budget includes $1 billion for high-speed rail, which supports the President’s five-year, $5 billion pledge from the 2010 Budget. High-speed rail promises to give the traveling public a practical alternative to flying or driving, particularly where there is congestion in the skies and on the roads. With trains efficiently connect

ing city and business centers, travelers would en

joy a new level of convenience not available in most parts of the country today. The Administration is dedicated to working with States and project sponsors to identify high-speed rail projects that will provide the greatest transportation, social, and environmental benefits, while maximizing the return on taxpayer dollars.

Invest in America’s Water Resources

Infrastructure. It is critical that sound

investments be made in the Nation’s water

resources infrastructure to assure the safe and reliable operation and maintenance of key facilities of the Army Corps of Engineers and

Bureau of Reclamation. The Administration will allocate funds to those ongoing commercial navigation and flood and storm damage reduction projects with the highest economic and environmental returns while achieving public safety objectives for communities. Resources are also focused on the restoration of significant ecosystems and initiatives that would allow greater conservation of water in the West. The Budget also emphasizes a new direction for waterinfrastructure projects by updating the 25-yearold procedures for planning future Federal water

resources infrastructure projects to incorporate modern planning procedures and methods, assure adequate consideration of ecosystem values, and promote non-structural solutions. In addition, the Corps of Engineers is updating its estimates of the benefits and costs of its ongoing construction projects to help assure that funding decisions are

based on the most current information available

on the return to the Nation of these investments. The Administration also intends to develop a

set of water resources reforms for the Corps of Engineers for consideration as part of the next Water Resource Development Act legislation.



### Educating a Workforce for the Jobs of the 21st Century

From unlocking the cures of tomorrow to cre

ating clean energy industries, from growing our economy and creating jobs to securing our Nation in the years to come, there is one constant in ad

dressing these challenges: they all depend on hav

ing a highly-educated workforce. More than ever before, success in the global economy and among the nations of the world is rooted in providing a

world-class education to all our children. It is a

fundamental element of the new foundation we must lay for our economy.

The Administration made a significant down payment in our schools and schoolchildren through the Recovery Act by including the largest

one-time investment in education in our Nation’s history. The Recovery Act saved and created hundreds of thousands of education-related jobs during a time of acute State budget shortfalls. It also included a $4 billion Race to the Top fund, a competitive source of education funding and one of the largest investments in reforming our Na

tion’s schools in history. At the same time, the Recovery Act made significant investments in expanding early childhood programs, addressed college affordability by expanding Pell Grants and the American Opportunity Tax Credit,26 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

and enhanced job training and referrals for the millions of workers coming through the doors of

the Nation’s one-stop career centers. Building on

these commitments, the Budget proposes to:

Reform Elementary and Secondary School Funding by Setting High Standards, Encouraging Innovation, and Rewarding Success. The Budget supports the Administration’s new vision for the Elementary and Secondary Education Act (ESEA). The reauthorized law would encourage States to adopt higher, clearer standards that set the expectation that every student will graduate from high school ready for college and a career. The new law would support dramatic improvements in the quality of assessments to measure complex skills and help teachers identify and respond to students’ strengths and needs. The reauthorization would also recognize and reward schools for helping students make important gains, even if they are not yet at grade-level, and offer new flexibility

for successful States and districts to pursue new solutions to help all students meet high standards. At the same time, the law would require vigorous efforts to turn around persistently low-performing schools, applying comprehensive strategies that put children first. In support of these efforts, the Budget provides a $3 billion increase in funding for K-12 education programs authorized in the ESEA and the Administration will request up to $1 billion in additional funding if the Congress successfully completes a fundamental overhaul of the law. Together, these measures would represent the largest funding increase for ESEA programs ever requested.

Expand the Race to the Top and Open the Competition to School Districts. The $4 bil

lion Race to the Top, created by the Recovery Act, began a competition among States to spur sys

temic and innovative reform across four areas: supporting high academic standards; improving teacher effectiveness and distributing effective teachers more equitably; using data to improve achievement; and turning around low-performing

schools. Not all States will receive Race to the Top grants, but the competition itself has gal

vanized key stakeholders across the Nation to reform State laws and to develop new plans for lifting student achievement. The Budget provides $1.35 billion to continue the President’s Race to the Top challenge and to expand the competition from States to school districts that are ready for comprehensive reform.

Increase the Number of Effective Teach

ers and Principals. Great teachers are the key to a high-quality education. Increasing the number of great teachers, especially in disadvan

taged schools, will require major new efforts to help all teachers improve their skills; recognize and reward excellence in the classroom; and help struggling teachers improve or, if need be, exit the classroom. Today, taxpayers invest nearly $3 billion a year in a teacher quality block grant that heavily supports investments with little eviden

tiary support or impact on increasing learning. As part of the overhaul of ESEA, the Administra

tion will require States taking formula funds to develop the preconditions for an effective human capital system, beginning with strong evaluation systems. At the same time, the Administration will invest $950 million in a new competitive fund for States and districts that supports bold approaches to recruiting, developing, retain

ing, and rewarding more effective teachers and principals, particularly in the lowest-performing schools. The Administration is also investing $405 million to support successful and innovative pathways into teaching and school leadership.

Invest in Supports for Student Success, Including Promise Neighborhoods. Stu

dents need to be safe and healthy, and they need a complete education that extends beyond the traditional hours. As part of a $1.8 billion invest

ment in the Supporting Student Success initia

tive, the Budget funds comprehensive supports so that students are mentally and physically healthy and ready to learn. The Budget provides $210 million for Promise Neighborhoods, mod

eled after the Harlem Children’s Zone, that aim to improve college enrollment rates by combining vigorous school reform with strong family sup

ports and effective community services across an entire neighborhood. The initiative also reforms the 21st Century Community Learning CentersTHE BUDGET FOR FISCAL YEAR 2011 27

program to focus funding on models that redesign and extend the school day, week or year to pro

vide additional time for students to engage in ac

ademic activities, additional time for enrichment activities, and time for educators to collaborate and improve instruction.

Grow High-Performing Charter Schools

and Other Innovative Public Schools. Ef

fective charter schools have achieved impressive results in closing achievement gaps. The Budget will invest $490 million to grow these schools and other autonomous public schools that achieve re

sults, develop new approaches, and give parents more choices. The Budget will support new op

tions for students to transfer to high-performing public schools, support successful magnet schools, and require States and districts accepting these

funds to create the conditions for effective schools to grow and ineffective schools to be restructured

or shut down.

Expand and Reform Early Childhood Edu

cation. Quality early education is an investment that pays off for years by preparing the youngest children for a lifetime of learning. To this end, the Administration has provided the funds to nearly double the number of children served by Early Head Start and expand Head Start. The Budget continues the Recovery Act expansions in these programs while focusing their new funds in 2011 on improving program outcomes. And the Budget provides a historic $1.6 billion increase in child care funding that can support not only an expansion in slots, but also an improvement in quality, safety, and outcomes. Finally, the Budget supports pending legislation that will establish a new Early Learning Challenge Fund admin

istered by the Department of Education and the Department of Health and Human Services (HHS), to help States improve the quality of early childhood programs.

Increase Pell Grants and Put Them on a Firm Financial Footing. Pell Grants have helped millions of Americans afford college, yet in recent decades, growth in their value has fallen far behind the growth in college costs. The Re

covery Act and 2009 appropriations bill increased the maximum Pell Grant by more than $600 for a total award of $5,350, and the maximum award will increase to $5,550 in 2010. The Budget pro

poses to make that increase permanent and put them on a path to grow faster than inflation every year. The Budget also addresses a second con

cern: Pell Grants currently function much like an entitlement, yet they are funded through an annual appropriations process that can fall be

hind actual demand for the grants. The Budget proposes to make Pell Grant funding mandatory so that adequate Pell Grant funding is available

every year.

Expand Financial Aid for Students and

Reduce the Burden of Student Loans. The Budget supports legislation that has passed the House of Representatives and is pending in the Senate that would reform student lending to

eliminate tens of billions of dollars in wasteful subsidies to financial institutions, and instead provide loans directly to students more efficient

ly and reliably by hiring private and non-profit companies through competitive contracts. This measure would then use the savings to make historic investments in increasing college access and success (as well as in early childhood educa

tion). In addition to expanded Pell Grants and a simplified student aid system, the legislation

includes a new American Graduation Initiative that will strengthen and support America’s com

munity colleges, focus on college completion, and help graduate 5 million more students by 2020. Moreover, the Budget proposes an effort to assist overburdened student loan borrowers by reduc

ing monthly payments and shortening the repay

ment period so that these borrowers will pay only 10 percent of their discretionary income in loan repayments and can have their remaining debt forgiven after 20 years.

Reform the Job-Training System to En

courage Innovation and Empower Workers. Our job-training system is critical to giving all workers the opportunity to succeed in a chang

ing economy, yet too often workers looking for good training cannot find it. As a complement

to reauthorization of the Workforce Investment Act (WIA), the Budget increases total funding for28 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

major funding streams, including a $101 million increase targeted to youth. But because reform is essential and the current system’s fragmenta

tion must end, the Budget also sets aside $261 million in the Department of Labor and $60 mil

lion in the Department of Education for innova

tion funds. They will support competitive grants for the most promising, research-based strate

gies, including regional approaches and sectoral partnerships for adults and the combination of summer or year-round employment with educa

tion for youths. The Departments will cooperate in the administration of the innovation grants as a part of a Workforce Innovation Partnership

that will create new incentives for States to break down silos, streamline service delivery, and elimi

nate duplication. The Partnership will be sup

ported by new cross-program waivers, which will be accompanied by new tools for measuring pro

gram performance and sharing information with both policymakers and customers. Finally, the Budget targets high-growth sectors of the econ

omy and workers often left behind through $85 million for green job training and $40 million for transitional jobs programs.

Restructure Narrow and Constrained Education Programs Into Broad and Flex

ible Competitions that Fund What Works. The Department of Education funds dozens of programs that narrowly limit what States, dis

tricts, and schools can do with funds. Some of these programs have little evidence of success, while others are demonstrably failing to improve student achievement. The President’s Budget eliminates six discretionary programs and con

solidates 38 K-12 programs into 11 new programs that emphasize using competition to allocate funds, giving communities more choices around activities, and using rigorous evidence to fund

what works. The Administration will make sure that, under these competitions, there is equita

ble geographic distribution of funds nationwide, including to rural communities. Building on the Recovery Act, the Administration proposes $500 million to expand the Investing in Innovation Fund, which will expand proven models—and fund and evaluate promising ones—for achieving student success. Finally, the Budget dedicates funds for the rigorous evaluation of education programs so that we can scale up what works and

eliminate what does not.



### Creating the Clean Energy Economy of
Tomorrow

From the consumer who sees the costs of filling his gas tank or heating her home go up, to the scientists who track how climate change is affecting our planet, we all know that we cannot

afford to maintain our reliance on oil and other fossil fuels to power our economy. Failure to act jeopardizes our Nation’s security, our economy,

and our future. That is why in the Recovery Act, the Administration invested more than $90 billion in clean energy technologies to begin the transformation of the economy. Building on this, the President worked with foreign leaders at the Copenhagen climate change talks in December 2009, where for the first time in history, all of the leaders of the world’s major economies came together to accept their responsibility to take action to confront the threat of climate change.

The international negotiations made a strong step towards the commitments and the transparency necessary to work together to solve this global challenge.

As we work to slow climate change internation

ally, we also must continue our efforts to build a clean energy economy here at home. Doing so has the potential to create millions of new jobs, which cannot be shipped overseas, in the new industries of the future. Around the globe, countries and companies see the job-creating potential of clean energy and are moving aggressively to lead the way. Our challenge is to be at the head of that pack. If we lead the way in developing clean en

ergy, we will grow our economy, create new jobs, and leave a stronger and more secure country to our children. To bring about this transformation,

the Administration will:

Undertake a Comprehensive Approach to Transform Our Energy Supply and Slow Global Warming. The Administration will work to enact and implement a comprehensiveTHE BUDGET FOR FISCAL YEAR 2011 29

market-based policy that will reduce greenhouse gas emissions in the range of 17 percent in 2020 and more than 80 percent by 2050. Businesses will have the flexibility to seek out the most profitable and least costly ways of achieving greenhouse gas emission reductions, from making investmentsin energy efficiency and low-carbon or zerocarbon fuels to offsetting their emissions through agricultural activities that remove carbon diox

ide from the atmosphere, and developing export markets for American clean energy technologies through investments in emission offset activi

ties abroad. The policy will address the needs of vulnerable families, communities, and businesses to facilitate the transition to a clean energy econ

omy. To prepare for the reduction in emissions, the Government will invest in climate registries to account for greenhouse gas emissions; imple

ment regulations that improve energy efficiency, lower energy bills, and reduce emissions; plan for the effects of a changing climate in the stew

ardship of our natural resources; and undertake the research and development of next-generation energy technologies that will promote our energy and climate security.

Develop the Market for Clean Energy Technologies. The Budget substantially ex

pands support for construction of new nuclear power plants by increasing the Department of Energy loan guarantees authority for such proj

ects by $36 billion, to a total of $54.5 billion, and provides credit subsidy funding of $500 million to support $3 to $5 billion of loan guarantees for energy efficiency and renewable energy projects. The loan guarantee program will encourage new nuclear facilities and a range of renewable energy projects that reduce greenhouse gases and pol

lutants, while simultaneously creating jobs and contributing to long-term economic growth. The Budget also supports research, development, and demonstration activities to accelerate deployment and commercialization of nuclear power, carbon capture and storage, renewable energy, and ener

gy efficiency technologies. To reduce greenhouse gas emissions in developing countries, the United States will help them adopt clean energy tech

nologies and low-carbon development strategies. Spur Investment in Domestic, Clean Energy Manufacturing. The Section 48(c) Advanced Energy Manufacturing Tax Credit was created by the Recovery Act to spur private

investment in facilities that manufacture advanced energy technologies in fields like renewable energy, energy storage , advanced energy transmission, energy conservation, and greenhouse gas emissions abatement. The program provides a 30 percent tax credit to qualified investments in new, expanded, or re-equipped advanced energy manufacturing projects, allocating a total of $2.3 billion to clean energy manufacturers. The Budget expands this successful program, providing an additional $5 billion to provide this tax credit to many more advanced energy manufacturing projects. This will help spur private investment in clean energy manufacturing and create jobs, helping to lay the groundwork for American leadership in the new clean energy economy.

Advance the Development of Carbon Cap

ture and Storage Technologies. The Budget supports a balanced research and development portfolio of carbon capture and storage technol

ogies. The $545 million in funding provided in the 2011 Budget for fossil energy climate change technology will help reduce greenhouse gas emis

sions by focusing resources to develop carbon capture technologies with broad applications to advanced power systems, existing power plants,

and industrial sources.

Eliminate Funding for Inefficient Fossil

Fuel Subsidies. As we work to create a clean energy economy, it is counterproductive to spend taxpayer dollars on incentives that run counter to this national priority. To further this goal, the Budget eliminates tax preferences and funding for programs that provide inefficient fossil fuel subsidies that impede investment in clean energy

sources and undermine efforts to deal with the threat of climate change. We are eliminating 12 tax breaks for oil, gas, and coal companies, clos

ing loopholes to raise nearly $39 billion over the

next decade.30 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

Boost Development of Clean Energy on

Federal and Tribal Land. Already, public lands and offshore resources managed by the

Federal Government constitute about one-third of the domestic supply of fossil fuel resources. The Administration will promote the development of clean, renewable energy on Federal lands. To that end, the Budget adds $14 million—on top of $50 million in 2010 increases—to build agency capacity to review and permit renewable energy projects on Federal lands. This includes conduct

ing the environmental evaluations and technical studies needed to spur development of renewable energy projects, assessing available alternative resources, and mitigating the impacts of devel

opment. In addition, the Administration is as

sisting Indian Tribes in overcoming the unique hurdles in developing renewable resources on Native American lands. Up to 15 percent of our potential wind energy resources are on Native American land, and the potential for solar energy is even higher.

Invest in the Understanding of Climate Change and Its Impacts. While climate poli

cies are developed and investments in clean energy technologies are made, investments to un

derstand the impacts of climate change are also crucial. Coastal areas, floodplains, and water sys

tems will all be affected by the changing climate, and it is vital that we understand the potential effects of climate change so businesses, farm

ers, ranchers, and the entire Nation can prepare for them now. That is why the Budget invests $2.6 billion to deepen our understanding of cli

mate change and its impact. The United States also will take prompt, substantial action to help the least developed and most vulnerable coun

tries adapt and build resilience to the impacts of climate change.



### Providing More Health Security and Bringing Down Its Cost

One of the biggest drains on the future growth of our economy is skyrocketing health care costs. For families who have health insurance, years of premiums that far and away out-paced income gains have taken their toll on family budgets. For businesses, rising health care costs hurt their competitiveness. For the Federal Government, there is no greater threat to our long-term fis

cal future than the current rate of health care cost growth. That is why the President laid out a strategy in the 2010 Budget to reform health care in a fiscally responsible way and has worked closely with the Congress to bring about this long overdue change. At this writing, we are closer to

health insurance reform than ever before. The bill before Congress will empower Americans who are insured with cost and quality informa

tion about doctors and hospitals and give them the stability and security they deserve by end

ing many discriminatory and capricious insur

ance industry practices; expand coverage to more than 30 million Americans who lack insurance, improving health and in some cases saving lives; cut waste and reform how medicine is practiced so that we get better quality care; and do this all without adding a dime to the deficit and while reducing the rate of health care cost growth over time. To lay the groundwork for these reforms

and to improve the health of the Nation, the Budget will:

Build on Health Information Technol

ogy (IT) Adoption Momentum. Digitizing the health care sector is a critical part of creating a health care system that is more effective and efficient. The Budget includes $110 million for continuing efforts to strengthen health IT policy, coordination, and research activities. Combined with the Recovery Act’s Federal grant and incen

tive programs designed to assist providers with adoption and meaningful use of electronic health records, these efforts will improve the quality of health care while protecting privacy and security of personal health information.

Increase Investment in Patient-Centered

Health Research. To get the best care, doc

tors and patients need to know what works and what doesn’t. The Budget includes $286 million for research that compares the effectiveness of different medical options, building on the expan

sion of this research begun under the Recovery Act. Disseminating the results of this research isTHE BUDGET FOR FISCAL YEAR 2011 31

expected to lead to higher quality, evidence-based medicine, arming patients and physicians with

the best available information to allow them to choose the medical option that will work the best

for them.

Bolster Prevention and Wellness Activi

ties. The Budget bolsters core prevention activi

ties by expanding community health activities, strengthening the public health workforce, and enhancing surveillance and health statistics to improve detection and monitoring of chronic dis

ease and health outcomes. The Budget funds a new effort in as many as 10 of the largest cities in

the United States to reduce the rates of morbid

ity and disability due to chronic disease through effective policy and environmental change strate

gies. The Budget also supports a new health pre

vention workforce to improve capacity of State and local health departments, as well as invest

ments to improve the health and wellness of the

Federal workforce.

Expand Affordable High-Quality Primary

and Preventive Care. The Budget includes $2.5 billion for health centers to provide afford

able high-quality primary and preventive care to underserved populations, including the unin

sured. This will allow health centers to continue to provide care to the 2 million patients added through Recovery Act funding and support ap

proximately 25 new health center sites. The Budget also includes funding to expand the inte

gration of behavioral health with primary health care, enhancing the availability and quality of

addiction care.

Combat Childhood Obesity. Nearly onethird of children in America are now overweight or obese, and our Nation now spends $150 billion a year treating obesity-related diseases, or nearly 10 percent of all medical spending. To improve children’s access to healthy meals and help to reduce childhood obesity rates, the Budget pro

poses investing an additional $1 billion per year as part of the reauthorization of the school meals program and other child nutrition programs. The Administration also will take steps to bring grocery stores and other healthy food retailers to

“food desert” communities.

Fund Innovative Efforts to Improve Ser

vices for Seniors and People with Disabili

ties. The Budget includes new Medicare and Medicaid demonstration projects that evaluate reforms to provide higher quality care at lower costs, improve beneficiary education and under

standing of benefits offered, and better align pro

vider payments with costs and outcomes. Special emphasis will be placed on demonstrations that improve care coordination for beneficiaries with chronic conditions, that better integrate Medicare and Medicaid benefits, and that provide higher value for dollars spent. The Budget will also sup

port the Year of Community Living Initiative to promote collaboration between HHS and HUD to expand access to housing and community sup

ports to enable people with disabilities to live in the community, as opposed to in institutional settings.

Fight Waste and Abuse in Medicare, Med

icaid, and the Children’s Health Insurance Program (CHIP). Reducing fraud, waste, and abuse is an important part of restraining spend

ing growth and providing quality service delivery to beneficiaries. In November 2009, the President signed an Executive Order to reduce improper payments by boosting transparency, holding agen

cies accountable, and creating incentives for com

pliance. This Budget puts forward a robust set of proposals to strengthen Medicare, Medicaid, and CHIP program integrity efforts, including proposals aimed at preventing fraud and abuse before they occur, detecting it as early as possible when it does occur, and vigorously enforcing all penalties and recourses available when fraud is identified. It proposes $250 million in additional resources that, among other things, will help ex

pand the Health Care Fraud Prevention and En

forcement Action Team (HEAT) initiative, a joint effort by the Departments of Health and Human Services and Justice. As a result, the Administra

tion will be better able to minimize inappropriate payments, close loopholes, and provide greater value for beneficiaries and taxpayers.32 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

Improve the Access to, and Quality of,

Health Care in Rural Areas. The Budget in

cludes $79 million for an initiative to strength

en regional and local partnerships among rural health care providers, increase the number of health care providers in rural areas, and improve the performance and financial stability of rural hospitals.

Increase the Number of Primary Health

Care Providers. The Budget invests $169 mil

lion in the National Health Service Corps (NHSC) to place providers in medically underserved areas to improve access to needed health care services. Under the NHSC, primary health professionals— such as physicians, nurse practitioners, and den

tists—agree to serve in a medically underserved community in exchange for having a portion of their student loans paid off. In 2011, the request

ed increase will add nearly 400 NHSC clinicians to the more than 8,100 that will be providing es

sential primary and preventive care services in health care facilities across the country.

Expand and Focus HIV/AIDS Treatment, Care, and Prevention Activities. The Budget expands access to HIV/AIDS prevention and treat

ment activities consistent with the President’s pledge to develop a National HIV/AIDS Strat

egy that will focus on reducing HIV incidence, increasing access to care and optimizing health outcomes, and reducing HIV-related health dis

parities. The Budget focuses HIV testing among high-risk groups, and increases resources for the Ryan White program to support the care and treatment needs for persons living with HIV/

AIDS who are unable to afford health care and related support services. The Budget aims to reduce HIV-related health disparities by expand

ing HIV/AIDS medical services within popula

tions disproportionately affected by the epidemic. The Budget also enhances funding for collabora

tion and integration activities to improve over

all health outcomes for those with HIV/AIDS

and co-infections with tuberculosis, hepatitis, or sexually transmitted diseases. Continue Efforts to Increase Access to

Health Care for American Indians and Alaska Natives (AI/ANs). The Budget includes $4.4 billion for the Indian Health Service (IHS) to expand investments initiated in 2010. Increases for IHS will strengthen existing Federal, tribal, and urban programs that serve 1.9 million AI/ ANs at approximately 600 facilities nationwide, and will expand access to Contract Health Ser

vices to cover health care services provided out

side of the Indian health system when services

are not available at IHS-funded facilities. The Budget will also fund staff and operating costs at new and expanded facilities to increase access

to health care services and enhance the Indian health system. The efforts supported in the Bud

get to expand health services in Indian commu

nities also include an analysis of how IHS can improve distribution of resources throughout the Indian health system.



### Keeping America Safe and Maintaining Our Global Leadership

Just as a strong economy bolsters our standing in the world and enhances our national security, strong global leadership helps protect the Ameri

can people while allowing the United States to thrive in an interdependent, global economy. The economic and financial crises of the past year demonstrated how market problems in one na

tion can affect businesses the world over and how inextricably linked the world’s economies are. That’s why we needed other major economies to join with the United States in taking action to stimulate economic demand. And that’s why the President worked with G-20 nations to agree to continue their cooperation as the global economy

recovers in order to reduce the likelihood of a fu

ture crisis, and to build a “Framework for Strong,

Sustainable and Balanced Growth.”

Over the past year, the President has worked to repair our alliances and restore America’s standing in the world. His effort has been driven by the fact that we face a range of global challenges that demand global action—from disrupting, dismantling, and defeating al QaedaTHE BUDGET FOR FISCAL YEAR 2011 33

to stopping the spread of nuclear weapons and strengthening global health. In the last year,

the President has taken a number of steps to meet these challenges while restoring American leadership. He has built new partnerships, and used all elements of American power to increase the pressure on al Qaeda worldwide. He laid out a plan to responsibly end the war in Iraq. He put forward a new strategy—with additional resources—to succeed in Afghanistan, and rallied NATO allies and partners to join us in committing additional resources. He signed executive orders that required the closure of the detention facilities at Guantanamo Bay, established a special task force to review detainee policy, and closed all CIA detention facilities as well as required all interrogations to follow the procedures of the Army Field Manual. And the President put forward a global agenda to stop the spread of nuclear weapons, reduce nuclear stockpiles,

and to secure all loose nuclear materials from terrorists within four years.

Building on these efforts, the Budget invests in all elements of our national power: diplomacy, economic development and other foreign assis

tance, our Nation’s armed forces, and intelligence. In addition, recognizing the extraordinary com

mitment and sacrifice of our men and women in uniform, the Administration continues its efforts to support servicemembers and their families and to provide our veterans with the support and resources that they deserve. Specifically, the

Administration will:

Support Missions in Afghanistan, Paki

stan, and Iraq. In the coming months, 30,000 additional troops will deploy to Afghanistan while U.S. combat forces continue drawing down in Iraq,

consistent with the U.S. commitment for all U.S. troops to withdraw from Iraq by the end of 2011. As U.S. forces leave Iraq, the Administration will fund assistance to the Iraqi government and fund security and logistic support for U.S. civilians de

ployed around the country. To address the costs of increasing military and intelligence operations in Afghanistan and Pakistan while drawing down in Iraq, the Administration is requesting $33.0 bil

lion for the Department of Defense (DOD) in 2010 supplemental funding on top of the $129.6 billion already provided, and a total of $159.3 billion for DOD’s 2011 overseas contingency operations ac

tivities. The Budget also requests $4.5 billion in 2010 supplemental funding and $11.6 billion in 2011 for Department of State activities in these countries. In particular, funding for Afghanistan

and Pakistan increases assistance and civilian personnel, and provides additional resources for governance, reconstruction, and other develop

ment activities to counter extremists’ influence. The Budget also increases security assistance for Pakistan and for the Afghan Security Forces. In an effort to be as transparent as possible about future costs, the Budget includes placeholder es

timates of $50 billion per year for 2012 and be

yond. These estimates do not reflect any policy decisions about specific military or intelligence operations, but are only intended to indicate that some as yet unknown costs are anticipated.

Strengthen Homeland Security. As the failed attack on Christmas Day 2009 reminded us, al Qaeda and like-minded terrorists still seek to harm the American people. That is why the Budget continues important investments in our homeland defenses that are targeted to meet priority needs. The Budget, for example, increases funding for the Transportation Security Administration by 9 percent: to fund checkpoint and baggage screening equipment that will replace magnetometers with up to 1,000 new Advanced Imaging Technology screening systemsfor passengers; more accurate and efficient inline baggage screening; additional international Federal Air Marshals; and more than 2,000 Transportation Security Officers to operate new screening equipment, employ enhanced screening techniques, and handle canine teams. The Administration also is requesting funds for 300

new Customs and Border Protection officers for passenger and cargo screening at ports of entry, additional new intelligence officers, and expanded pre-screening operations at foreign ports. Finally, the Budget will strengthen the early detection and reporting of terrorists and other threats and will continue the expansion of the Administration’s efforts to target and remove criminal aliens.34 LAYING A NEW FOUNDATION FOR ECONOMIC GROWTH

Stand by Our Nation’s Troops and Their

Families. The strength of our troops relies on the stability of the families that support them, and the Budget supports these military families as our servicemembers answer our country’s call to service. First, the Budget includes funding for a 1.4 percent basic pay raise that will keep military pay increases in line with those in the private sector. Second, the Budget also includes an average housing allowance increase of 4.2 per

cent, as well as a variety of monthly special skillbased payments, enlistment and reenlistment bonuses, and other benefits. Third, the Budget invests in Coast Guard-owned family housing to help alleviate housing shortages. Fourth, the Administration increases funding for family sup

port programs by over 3 percent above the 2010 enacted level. This includes $1.3 billion (an in

crease of $87 million over the 2010 enacted level) to expand availability for affordable, high-quality child care services; $1.9 billion ($37 million over the 2010 enacted level) for expanded counseling and assistance services to help families meet the challenges brought on by repeated deployments and family separations; and $84 million (an in

crease of $12 million over the 2010 enacted level) for enhanced career and educational opportuni

ties for military spouses through tuition assis

tance and Federal internship programs.

Increase Funding for the Department of

Defense. Giving our military the material and support they need to accomplish their missions is the least we can do, given the sacrifices they make. The Administration requests $548.9 billion, an increase of $18.2 billion, or 3.4 percent, over the 2010 enacted level of $530.8 billion. This will provide our troops with the most effective and modern equipment possible and the support they need.

Prevent the Proliferation of Nuclear Weapons. Following on the vision the President outlined this past year, the Budget funds sig

nificant steps that will help stop the spread of nuclear weapons and seek the goal of a world without them. The Administration requests $2.7 billion—a 26-percent increase over the 2010 en

acted level—for the Department of Energy’s De

fense Nuclear Nonproliferation program. Robust funding is also requested for nonproliferation efforts across the Government, and especially

in the Intelligence Community and the Depart

ments of Defense, State, Homeland Security, and Justice. These agencies will lead international

efforts to secure all vulnerable nuclear mate

rial around the world in four years; deter and interdict the trafficking of nuclear material; and strengthen international nonproliferation trea

ties, regulatory controls, and safeguards. As the United States reduces the role of nuclear weap

ons in the national security strategy, this Budget fully funds efforts to maintain a safe, secure, and

effective arsenal.

Care for Wounded, Ill, and Injured

Servicemembers. Last year, DOD added 18 more Warrior-in-Transition Complexes at posts around the world as part of its efforts to care for

the health of the men and women who serve. TheBudget sustains ongoing efforts to provide highquality medical care to servicemembers, their families, and retirees. This includes support for

wounded warrior transition units and centers of excellence in vision, hearing, traumatic brain in

jury, and other areas to continuously improve the care provided to wounded, ill, and injured service

members.

Increase Funding for the President’s

Global Health Initiative. The Administration

will build on its commitment to save millions of lives while strengthening the public health infra

structure that can help disease from crossing bor

ders—including our own. The Budget includes increased funding to combat the HIV/AIDS crisis by focusing on increasing treatment and expand

ing access to prevention; ramping up maternal and child health programming to reduce mortality

of mothers and children under five and decrease the prevalence of malnutrition; expanding invest

ments in family planning activities, malaria, tu

berculosis, and neglected tropical diseases; and strengthening local health systems to enhance capacity and long-run sustainability. Alongside our multilateral partners, the United States will continue to provide global leadership to fulfill our shared responsibility and our common promise toTHE BUDGET FOR FISCAL YEAR 2011 35

improve the health of the world’s poorest popula

tions.

Fight Global Hunger and Expand Food Security Efforts. The Budget increases fundingfor agricultural development as part of a multiyear plan to lift a significant number of people out of poverty and reduce malnutrition for mil

lions of children under five years old by 2015. The Budget provides assistance to countries that com

mit to address their internal food security needs and provides a significant contribution to a new

multi-donor facility administered by the World Bank. The Budget also maintains strong support

for food aid and other humanitarian assistance.

Increase the Number of Peace Corps Vol

unteers. The Administration funds the second year of the President’s initiative to significantly increase the number of Peace Corps volunteers, and puts the Peace Corps on track to grow by 50 percent so it reaches 11,000 volunteers by 2016.

Continue Advance Appropriations for De

partment of Veterans Affairs (VA) Medical

Care. The 2011 Budget requests $50.6 billion in advance appropriations for the VA medical care program so that care for the Nation’s veterans is not hindered by budget delays. This funding will enable the Department to have timely and predictable funding from year to year, ultimately making it easier for veterans to rely on accessible

VA care.

Enroll More than 500,000 Previously In

eligible Veterans into VA Health Care by

2013. Last year, for the first time since January 2003, non-disabled veterans with moderate in

come were made eligible for VA health care. The President’s Budget allows for the continued en

rollment of more than 500,000 moderate-income veterans into the VA health care system by 2013 while maintaining high-quality and timely care

for the lower-income and disabled veterans who also rely on VA. Boost Compensation to Military Disabil

ity Retirees. For the first time, highly-disabled veterans who are medically retired from ser

vice will be eligible for concurrent receipt of dis

ability benefits from the VA in addition to DOD retirement benefits. Previously, these benefits were offset. All medically retired servicemem

bers will be eligible for concurrent receipt of VA and DOD benefits by 2015.

Respond to the Unique Needs of Today’s

Veterans. Today’s veterans have different needs due to their experiences in service, the composi

tion of the armed forces, and the unique challeng

es that many face. Recognizing that, the Budget strengthens VA’s ability to provide veterans the best possible care for Post-Traumatic Stress, Traumatic Brain Injury, and other mental health conditions by investing $5.2 billion in specialized care, and increases collaboration between joint DOD and VA programs that target psychological health. To combat homelessness among veterans, the Budget expands collaborative partnerships with local governments, non-profit organizations, and the Departments of Housing and Urban De

velopment, Justice, and Labor. And responding to the growing number of women veterans, the Bud

get provides funding for their unique needs, from an appropriate environment of care to specialized medical and counseling services.

Improve Quality of Health Care Through Electronic Records for Our Troops and

Veterans. Too often, important patient informa

tion is unavailable to VA health care providers, yet that information was acquired by doctors and hospitals that may have treated the veteran while still in uniform. That is why the VA and DOD are jointly implementing the Virtual Lifetime Elec

tronic Record, which will enable VA to maintain a complete health record for each veteran and

to deliver care and benefits to veterans with in

creased efficiency and improved accuracy. The President’s Budget also invests over $200 mil

lion in automated processing to directly improve the accuracy and timeliness of veterans benefits, particularly disability compensation and the new

Post-9/11 GI Bill benefit.37 Laying a new foundation for economic growth and prosperity for working families will take a change in policies and programs to unleash the creativity and hard work of the American people. But to prevent our country from backsliding into the irresponsibility of the past, we need to change how Washington works. We have seen the con

sequences of fiscal recklessness, of tolerance for programs that no longer work or are outdated, and of a government that is most open to those with access and influence. The deficits, wasted resources, and special treatment squandered funds that could have been used to help Ameri

cans gain or retain a foothold in the middle class and enjoy what every family wants: a good job, a roof over their heads, excellent schools for their children, affordable and high-quality health care, and a secure retirement.

Over the past year, the Administration has begun the hard work of changing Washington. On his first full day in office, the President is

sued an Executive Order that: prohibits execu

tive branch employees from accepting gifts from lobbyists; closes the revolving door between Gov

ernment and the private sector that had given the latter undue influence; requires that Govern

ment hiring be based on competence and qualifi

cations and not political connections; and orders every one of his appointees to sign a pledge abid

ing by these tough new rules. As the Administra

tion undertook its efforts to rescue the economy, it issued restrictions on lobbying for financial stabilization and American Recovery and Rein

vestment Act (Recovery Act) funds. In addition, the President also banned lobbyists from serv

ing on agency advisory boards and commissions, bodies which had become dominated by special

interests. Believing that sunlight is the best disinfec

tant, the Administration opened up the doors of Government to the scrutiny of the American people. The President signed an Executive Or

der expanding public access to presidential re

cords, decided voluntarily to disclose the names of visitors to the White House, and used new media technologies—from video feeds at previ

ously closed-door meetings to web chats with high-ranking officials—to let the American people monitor the Government at work and interact with its leaders. In implementing the Recovery Act, the Administration continues to insist on an unprecedented level of transparency so that Americans can see where Recovery dol

lars are going as they are spent and the effect they are having. In addition, the Administration launched a comprehensive Open Government Initiative that is breaking down long-standing barriers between the American people and their Government. This drive to a more open govern

ment is speeding information to citizens, saving taxpayers’ dollars, and erasing frustrating red
tape.

While the economic crisis forced the President to add temporarily to an already record-setting deficit, he laid out a commitment to cut in half the deficit he inherited upon taking office. More

over, he did so while being open and honest about

our fiscal situation. The Administration’s first Budget eliminated previous budget gimmicks that would have made the 10-year deficit num

ber $2.6 trillion smaller. Instead, the President insisted on presenting an honest budget to the American people. Thus, the 2010 Budget—for example—accounted for the costs of wars in Iraq and Afghanistan and provided a 10-year look into the future rather than a five-year one and 

# RESTORING RESPONSIBILITY38 RESTORING RESPONSIBILITY

acknowledged the full costs associated with pre

venting the Alternative Minimum Tax from tax

ing more middle-class families. This same desire to evaluate Government performance accurately also motivated the Administration’s line-by-line review of the Federal budget for programs that were ineffective, duplicative, or obsolete. Work

ing with the military leadership and Secretary of Defense Gates, the President identified billions of dollars in defense savings for this year, canceling the new presidential helicopter and additional F-22 fighter jets.

The Administration also undertook a com

prehensive effort to reform Government con

tracting—ending unjustified sole-source and cost-reimbursement contracts and pursuing other steps that will save $40 billion a year by 2011—

and the President issued an Executive Order cracking down on the $100 billion in improper payments that go out from the Government.

The President also made a major change in the way Washington has done business in recent years by demanding that all entitlement and tax legislation be fully paid for (with the exception of temporary measures to address the economic cri

sis). He put this into practice, for instance, by in

sisting on fiscally-responsible health reform that not only did not add a dime to our deficits, but also reduced the rate of health care cost growth—the main driver of our long-term fiscal future. Final

ly, the President has championed Pay-As-You-Go legislation, which would require the Congress to fully offset the costs of any entitlement increases or tax cuts by finding savings elsewhere— helping to make this change in practice the law of the

land.

Taken together, these steps to streamline what works and eliminate what doesn’t, to open gov

ernment to the American people, and to end spe

cial interest access are critical to instilling a new sense of responsibility for taxpayer dollars, re

building the connection between Americans and their Government, and putting the Nation back on a fiscally responsible path. 

### Restoring Fiscal Discipline

When the President took office he faced a deficit of $1.3 trillion for that first fiscal year, a far cry from the budget surpluses predicted at the start of the previous administration. Since the 2010 Budget was released in February of 2009, unfavorable economic conditions and

technical re-estimates have worsened the deficit outlook by $2 trillion through 2019—the equivalent of 1 percent of GDP per year—with a deterioration of about $200 billion in 2015

alone.

Looking out over the next decade, we are $12 trillion deeper in debt than we were in 2001 because of three specific developments. The na

tional debt is $7.5 trillion larger by the end of this decade because of the failure to pay for two large tax cuts, primarily for the wealthiest Americans, and a new entitlement program. An additional $3 trillion in debt is the result of inheriting the worst recession since the Great Depression. Our response to this recession, the Recovery Act, which has been critical to restoring economic growth, added an additional $1 trillion to the debt—only 10 percent of the total.

Now, as we turn the corner from rescuing the economy to rebuilding it, it’s time to once again take responsibility for our fiscal future. While it’s

essential that we do not stifle the momentum of our recovery from the current recession, we also cannot adequately grow the economy and spur job creation in the long term if we allow these deficits to persist. That is why, as the economy recovers, the Administration will take the steps necessary to restore discipline to our Nation’s fi

nances to put our country on firm fiscal footing.

The Administration will:

Freeze Non-Security Discretionary Spend

ing for the Next Three Years. Over the past year, an extraordinary surge in tax cuts and Federal spending helped stimulate macroeco

nomic demand and bring the economy back from the brink of a second Great Depression. Expand

ing the short-term deficit during a moment of economic crisis is widely recognized as necessaryTHE BUDGET FOR FISCAL YEAR 2011 39

by economists from across the ideological spec

trum. Nonetheless, the ramifications of the large deficits we inherited and the response that was required to stop the economic freefall has repercus

sions both in the near term and in years to come in the form of higher debt and interest payments. As the economy recovers, we need to rebalance our spending priorities. That is why the President is proposing a three-year freeze in non-security discretionary funding in this year’s Budget.

Establish a Bipartisan Fiscal Commis

sion. To help put our Nation on a sustainable fiscal path, the Administration will work to cre

ate a fiscal commission charged with identify

ing policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission is charged with balancing the budget excluding interest payments on the debt by 2015. The re

sult is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers. The magnitude and timing of the pol

icy measures necessary to achieve this goal are subject to considerable uncertainty and will de

pend on the evolution of the economy. In addi

tion, the Commission will examine policies to meaningfully improve the long-run fiscal outlook, including changes to address the growth of en

titlement spending and the gap between the pro

jected revenues and expenditures of the Federal

Government.

Require the Financial Services Industry to Pay Back Taxpayers. The assistance given the financial services industry to weather the crisis of the past year represented an extraordi

nary step that no one wanted to take, but that was necessary to prevent deeper pain to the econ

omy. Yet the largest Wall Street firms have been both the source of extraordinary costs throughout the economy due to their excessive risk-taking, and the beneficiaries of the extraordinary mea

sures taken to prevent a deeper financial crisis. While the expected cost of the TARP program has fallen by $224 billion since the 2010 Mid-Session Review to about $117 billion, shared responsibil

ity requires that the largest financial firms pay back the taxpayer as a result of the extraordinary action taken. Congress recognized that when it wrote the legislation authorizing TARP by requiring the President to propose a way for the financial sector to pay back taxpayers so that not one penny of TARP-related debt is passed on to the next generation. The Administration is therefore calling for a Financial Crisis Responsi

bility Fee on the largest Wall Street and financial firms that will last at least 10 years, but longer if necessary, to compensate taxpayers fully for the extraordinary support they provided. This

fee would be limited to financial firms with over $50 billion in assets. As it would be based on an institution’s size and exposure to debt, it would

also further the Administration’s financial reform goals by providing a check against the risky

behavior that contributed to this crisis.

Close the Carried Interest Loophole for Wealthy Investment Managers. The Adminis

tration supports reforming our tax code to ensure that the income earned by investment managers is treated the same way as income earned by mid

dle-class families. Currently, a loophole in our tax system allows some investment managers to cut their tax bills by more than half by treating their earned income as capital gains—which is taxed at a 15 percent rate, far less than the marginal tax rate that would otherwise apply. By closing this loophole, we will recognize the “carried interest” earned by these investment managers for what it is—ordinary income that should be taxed at ordi

nary income tax rates. This measure would raise $24 billion over the next 10 years.

Allow the Bush Tax Cuts for Households Earning More Than $250,000 to Expire. In the last Administration, those at the very top en

joyed large tax breaks and income gains while almost everyone else struggled and real income

for the middle class declined. Our Nation cannot afford to continue these tax cuts, which is why the President supports allowing those tax cuts that affect families earning more than $250,000 a year to expire and committing these resources to reducing the deficit instead. This step will have no effect on the 98 percent of all households who make less than $250,000.40 RESTORING RESPONSIBILITY

Reduce the Itemized Deduction Write-off for Families with Incomes over $250,000. Currently, if a middle-class family donates a dol

lar to its favorite charity or spends a dollar on mortgage interest, it gets a 15-cent tax deduction, but a millionaire who does the same enjoys a de

duction that is more than twice as generous. Byreducing this disparity and returning the highincome deduction to the same rates that were in place at the end of the Reagan Administration, we will raise $291 billion over the next decade.

Reform the Taxation of International Income and Eliminate Other Corporate Loopholes. The American corporate tax code is riddled with inefficiencies and loopholes, includ

ing the fact that it allows companies to indefi

nitely defer the payment of U.S. taxes on foreign income while immediately benefiting from the

tax deductions associated with these activities. It also allows many companies to take advantage of transfer pricing to shift income earned in the United States to lower-tax countries. The Budget will reform and end these practices.

Eliminate Funding for Inefficient Fossil

Fuel Subsidies. As we work to create a clean energy economy, it is counterproductive to spend taxpayer dollars on incentives that run counter to this national priority. To further this goal and reduce the deficit, the Budget eliminates tax pref

erences and funding for programs that provide inefficient fossil fuel subsidies that impede in

vestment in clean energy sources and undermine efforts to deal with the threat of climate change. We are eliminating 12 tax breaks for oil, gas, and coal companies, closing loopholes to raise nearly $39 billion over the next decade.

Recommit to Cutting the Deficit in Half by the End of the President’s First Term. Even though he entered office facing an historic economic and financial crisis, the President com

mitted his Administration to cutting the deficit he inherited upon taking office in half by the end of his first term. Since then, it has become clear that the recession was worse than anyone thought at the beginning of 2009, costing the Govern

ment even more in assistance and lost revenue. Nonetheless, the President remains committed

to cutting in half by the end of his first term the deficit he inherited on January 20, 2009.



### Streamlining What Works, Eliminating
What Doesn’t

Now more than ever, it’s critical that taxpayer dollars are not wasted on programs that do not work, are duplicative, or are out-of-date. Allow

ing taxpayer dollars to be wasted in this way is an irresponsible use of funds and an irresponsible abuse of the trust the American people put in its elected leaders. Instead of accepting business as usual, we need to streamline programs that work

and fix or eliminate those that do not. We need to instill a new responsibility for taxpayer dollars, and modernize government to deliver better ser

vices to the American people for less. To accom

plish this, the Administration will:

Terminate or Consolidate Outdated or Ineffective Programs. Too often programs and practices persist because of inertia. The President sought to change this mentality by having his Administration conduct a line-by-line review of the Federal budget. In his first Cabinet meeting, he challenged the assembled agency heads to find at least $100 million in collective cuts to their administrative budgets, separate and apart from those identified in the 2010Budget. They responded by identifying 77 costsaving measures—amounting to $243 million in savings through 2010. In addition, as part of the 2010 Budget, the President identified 121 programs for reduction, termination, and other savings amounting to $17 billion in savings.

While recent administrations have seen between 15 to 20 percent of their proposed cuts approved by the Congress, this year we were able to see 60 percent become law. Building on that, the President is proposing more than 120 savings proposals totaling approximately $23 billion.THE BUDGET FOR FISCAL YEAR 2011 41

Freeze Pay and Eliminate Bonuses for Senior Political Appointees. The

Administration values the essential work of our talented Federal employees, but at a time when

millions of Americans are without work and millions more are going without bonuses and raises, the Federal Government too must cut back. Last year, the President ordered a freeze of White House senior staff pay. And for 2011, the Administration proposes to extend this pay freeze

to all senior political appointees throughout the

Federal Government and continue the policy of no bonuses for all political appointees.

Reduce Improper Payments. Each year, taxpayers lose billions of dollars in wasteful, im

proper payments by the Federal Government to individuals, organizations, and contractors who inadvertently or deliberately overbill the Gov

ernment. In 2009, the Administration was able to identify improper payments totaling $100 bil

lion—a figure driven by improved detection and the significant increase in Federal outlays associ

ated with the economic downturn and recovery. In response, agencies will be implementing an Executive Order the President signed at the end of 2009 to rein in improper payments. First, we will bring more transparency to these errors by creating an online dashboard of key indicators and statistics so that the public can access infor

mation on improper payments, view payment er

ror rates by agency and program, and see a list of the most egregious actors. Second, we will hold agencies accountable for reducing improper payments while maintaining program access, through—among other steps—designating one Senate-confirmed appointee to be accountable to the President for meeting improper payment re

duction targets and consolidating program integ

rity activities. Third, we will provide incentives for States, agencies, and recipients to report and reduce payment errors by using rewards—such as allowing States that reduce improper pay

ments—to recoup more Federal grant dollars to cover administrative expenses, and use punish

ments, such as financial penalties on contractors who do not timely disclose an improper payment Lastly, the Administration is launching the Part

nership Fund for Program Integrity Innovation, an initiative which focuses on improving service delivery, payment accuracy, and administrative efficiency in Federal assistance programs while reducing access barriers for beneficiaries.

Cut Waste in Contracting. Since 2002, Federal spending on contracts has more than doubled to more than $500 billion. From 2002 to 2008, the value of contracts awarded without full and open competition increased by 129 percent— from $82 billion to $188 billion. The President has charged Federal departments and agencies with saving $40 billion annually by 2011 through terminating unnecessary contracts, strengthening acquisition management, ending the overreliance on contractors, and reducing the use of high-risk contracts. In the first year of this effort, agencies have identified more than $19 billion of savings in 2010—on track to meet the $40 billion target. In 2011, the Administration will work with agencies on furthering their contracting reform efforts so that the $40 billion target is met. In addition, we will explore ways to gain additional savings through leveraging the purchasing power of the Federal Government. We are also making significant investments in the acquisition workforce to make sure agencies have adequate capacity to oversee and manage contracts—and ultimately to save money and provide better services to the American people. The Departmentof Defense also will further reduce its use of highrisk contracts by 9 percent and take steps to ensure that military requirements for weapons are reasonable, program costs and schedules are realistic, and acquisition funding is stable.

Increase Accountability in, and Reduce the Number of, Earmarks. For too many years, the use of earmarks went virtually unchecked. Projects were inserted into legislation without any scrutiny or identifiable sponsor. Billions of taxpayer dollars were spent without examination by any committee or either branch of Congress. In 2007 and 2008, the Congress worked to end these abusive practices. Anonymous earmarks were eliminated and replaced with transparency measures so people can see who is spending their tax dollars and why. Yet, even with the changes,

earmark overuse and abuse have continued. The42 RESTORING RESPONSIBILITY

President has put forward core principles for sig

nificant earmark reform: earmarks must have a legitimate public purpose and be subject to public scrutiny; members of Congress must disclose pub

licly their earmark requests; and any earmark for a for-profit private company should be subject to the same competitive bidding requirements as other Federal contracts. The 2010 appropriations bills showed progress, with earmarks reduced in cost by more than 23 percent or more than $3

billion. The Administration will continue to work with the Congress to reduce earmark overuse

and abuse.

Rigorously Evaluate Program Perfor

mance. In order to drive evidence-based deci

sions about what works and what doesn’t, the Administration is aggressively expanding its program evaluation efforts. In response to the Office of Management and Budget (OMB) guid

ance, 17 agencies submitted a total of 61 specific proposals ranging from new efforts to evaluate the efficacy of new investments in early child

hood education to a proposal to determine which approaches to foreign assistance are most effec

tive in reducing poverty in poor countries. In the Budget, the Administration will fund 23 of the most promising new program evaluations and strengthen evaluation capacity in other agencies. All major evaluations planned or underway will be posted online from the time they are started, so that agencies cannot hide negative findings.

Close the Technology Gap. Twenty years ago, when people came to work for the Govern

ment, they had access to the world’s best tech

nology. Today, Government employees often have better technology at home than at work. The Federal Government spends tens of billions of dollars on information technology (IT), but frag

mentation, poor project execution, and the drag of legacy technology has not delivered the pro

ductivity and performance gains to government that are found when IT is deployed effectively in the private sector. Under the leadership of the Federal Chief Information Officer, the Adminis

tration is continuing its efforts to close the gap in effective technology use between the private and public sectors. Specifically, the Administration will continue to roll out less intensive and less expensive cloud-computing technologies; reduce the number and cost of Federal data centers; and work with agencies to reduce the time and effort required to acquire IT, improve the alignment of technology acquisitions with agency needs, and hold providers of IT goods and services account

able for their performance.

Centralize Provision of Information Tech

nology Services for Non-Military Agencies

. As technology and IT management practices continue to evolve rapidly, it is critical that the Government is able to adapt to these changes to achieve greater efficiency and effectiveness. Following examples set by the Department of Defense (DOD), several State governments, and best practices in private industry, the Adminis

tration will establish one or more efficient, cen

tralized IT service providers for non-military agencies. Centralizing Federal IT services will reduce duplicative and wasteful spending; reduce facility space usage; increase security; improve service delivery; and reduce energy consumption. It is projected that this approach could prevent

billions in increased costs across the Federal Government over the next few years.

Hold Agency Leaders Accountable for Specific Goals. Government leaders must make hard choices about the priorities that mat

ter most to the American people and then do what it takes to deliver on those objectives. This has historically been difficult, however, because senior political leaders tend to focus on policy development rather than on management and implementation. To encourage senior leaders

to deliver results against the most important priorities, the Administration launc hed the HighPriority Performance Goal initiative. Building on this effort in the 2011 Budget, the Administration is requiring agency heads to commit to a limited number of priority goals that matter to the pub

lic. The goals must have ambitious targets to
be achieved within 24 months without the need

for new resources or legislation, and have welldefined, outcomes-based measures of progress. OMB will work with agencies to help them toTHE BUDGET FOR FISCAL YEAR 2011 43

achieve their goals and spread this management approach throughout their organizations.

Revamp the Federal Hiring Process. Highperforming companies and other forward-looking employers view their people as their key asset and are constantly re-evaluating and improving their approaches to attracting, motivating, and developing the best talent. However, the Federal hiring process currently takes over 150 days on average and requires far too many steps involving many different people. Often, government loses top talent to faster moving competitors. In the past year, most agencies have ended the “black box” of the Federal hiring process by notifying ap

plicants of their status online at four steps in the process. To fix the hiring process, OMB and the Office of Personnel Management have initiated an effort to streamline hiring to achieve major re

ductions in the hiring times by the end of 2010. Going forward, we plan to increase the quality of applicants through innovative recruitment strat

egies, improved assessments of applicants, and proposing necessary regulatory and legislative changes to further streamline hiring processes while continuing to rely on the merit-based hiring system that has served the country so well.

Eliminate Unneeded Federal Real Estate

from the Government Books. The Govern

ment Accountability Office in January 2003 iden

tified Federal real property as a high-risk area of concern because of long-standing problems with excess and underutilized property, deteriorating facilities, unreliable real property data, over-reli

ance on costly leasing, and building security chal

lenges. While the Government has made some progress to address these chronic challenges, the changes have been slow primarily because the Federal real property portfolio is based on an outmoded, outdated business model. Across the Government, billions of dollars in physical assets

are not needed but remain on the Government’s hands. The Administration will pursue expand

ing the authority of agencies to retain sales pro

ceeds while also proposing a five-year pilot to expedite the sale of real property by streamlining the process for select asset sales. 

### Opening Government Up to the American People

The President has been clear from day one in

office: the Federal Government must break down the barriers between it and the people it is sup

posed to serve. Through an unprecedented Open Government Directive, he put transparency, par

ticipation, and collaboration at the center of the Government’s operations. In response, every Cabinet agency, along with the White House, has taken a range of steps to open government up to the American people. These include the release of information, such as the White House visitor logs; efforts to get citizen input and comment on execu

tive orders; and the use of online technologies so the public can ask questions of their Government leaders. In addition, the Administration has moved affirmatively to reduce special interest in

fluence on the Federal Government through, for example, restrictions on lobbying related to the Recovery Act and financial stabilization efforts and a ban on lobbyists serving on agency advi

sory boards and commissions, bodies which had become dominated by special interests.

Transparency not only strengthens the bond between citizens and their Government, it also boosts performance by strengthening account

ability, supporting the identification of effective practices, stimulating idea flow, and motivating better performance. Online posting of perfor

mance data—including agency goals, performance trends, improper payments and IT projects—rep

resents an important step toward creating a cul

ture of accountability in government. Openness also can improve the quality of the services deliv

ered to citizens. Transparent processes allow citi

zens to offer feedback on service quality to make government better, improving satisfaction levels. To further open up the government to the Ameri

can people, the Administration will:

Publish More Government Information

Online. To increase accountability, promote informed participation by the public, and create economic opportunity, each Cabinet-level and independent agency is working to make openness standard. Timely publication of information is an44 RESTORING RESPONSIBILITY

essential component of transparency. Through

the Data.gov portal—launched in May 2009 with just 47 sets of data—the public now can iden

tify, examine, download, and cross-analyze more than 118,000 Government data sets. In 2011,

the Government will expand Data.gov with pre

viously unpublished, high-priority information, offered in open formats. Federal departments and agencies also will create open Government websites to serve as a gateway for access to their transparency activities.

Update Regulations to Allow the Use of New Technologies. Improvements in technolo

gy, in many places, have outpaced the regulations put in place to govern its use. In some cases, those regulations never anticipated the advances made. In response, OMB, in consultation with the Chief Technology Officer, will review Government-wide information policies, such as the Paperwork Reduction Act and the Federal cookies policy, which may need updating or clarifying to allow agencies to utilize new technologies that fully
promote open government.

Launch New Tools to Track Regulations. The Federal regulatory process is opaque, yet critically important to the economy and lives of Americans. Greater transparency will help to break down barriers to participation in the gov

ernment and understanding of its actions. The Administration will launch a new regulation tracking portal to make it easier to track specific regulations under review—where they are in the process, what the key deadlines are, and when the review will be completed. The public also will be able to track rules in the aggregate by agency, to see which have been identified as economically significant, and to link to sites where comments can be offered to help shape the final rule. Make It Easier to Track How Taxpayer Dollars Are Spent. For too long, Americans

have been in the dark about how their tax dol

lars are spent. They pay their taxes, but have no clear, concise way to track how and where the money is spent and what it accomplishes. The Administration is committed to pulling back the curtain on Government spending and will launch a new tracking tool with daily updates that will provide citizens with the ability to see aggregate spending by agency and also by geographic area. A new search engine will allow the public to cus

tomize their information by location, by agency, or by timeframe. This innovative development will allow people to have a greater understanding of how their Government works, and hold officials accountable for responsible spending decisions.

Create an Online Citizen Engagement

Platform. With the growing number of social media tools available, citizens are demanding more engagement with their Government in new, innovative ways. The Citizen Engagement Platform (CEP), a joint collaboration between the General Service Administration and OMB, will increase the Government’s ability to interact and collaborate with citizens and provide a simple, cost-effective vehicle for agencies to access tools and guidance to be successful in those endeavors. The CEP will build on pilots launched last year by continuing to identify new technology appli

cations to enable intra-agency and interagency collaboration and create a coordinated process for identifying tools and eliminating the redundant work presently carried out by agencies imple

menting new social media tools.

### 45 The U.S. Department of Agriculture (USDA) provides leadership on issues related to food, agriculture, rural development, and natural re

sources based on sound public policy, the best available science, and efficient management. USDA focuses on further developing alternative markets for agricultural products and activi

ties, providing financing needed to help expand job opportunities and improve housing, utilities,

and infrastructure in rural America. The De

partment also works to enhance food safety by taking steps to reduce the prevalence of food

**Funding Highlights:**

• Promotes economic and job creation opportunities for rural America by focusing on five core areas: access to broadband services, innovative local and regional food systems, renewable energy programs, climate change, and rural recreation.

• Provides $7.6 billion for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to serve all eligible individuals.

• Provides $10 billion over 10 years for a strong Child Nutrition and WIC reauthorization.

• Provides $50 million for a new “Healthy Food Financing Initiative” to bring grocery stores and other healthy food retailers to underserved communities.

• Provides $429 million, the highest funding level ever, for competitive grants through the Agriculture and Food Research Initiative.

• Refocuses Forest Service resources to support watershed and ecosystem improvement

efforts.

• Supports the Department’s effort to reduce foodborne illnesses from products inspected by

USDA.

• Funds several important conservation efforts such as improving water quality, restoring and protecting almost 200,000 additional acres of wetlands, and reducing nutrient loading in the Chesapeake Bay.

• Enhances the Department’s efforts to promote U.S. agricultural exports by increasing assistance to develop and maintain overseas markets and reduce foreign trade barriers and other practices that hinder agricultural exports.

• Targets farm payments to those who need—and can most benefit from—assistance, and reforms the crop insurance program by renegotiating the Government’s agreement with crop insurance companies. 

# DEPARTMENT OF AGRICULTURE

### 46 DEPARTMENT OF AGRICULTURE

borne hazards, improve nutrition and health by providing food assistance and nutrition educa

tion and promotion, support international agri

cultural and economic development, and man

age and protect America’s public and private lands by working cooperatively with other levels of government and the private sector. The Presi

dent’s Budget provides $26 billion in discretion

ary budget authority to support this important

mission.

Supports Growth and Job Creation in

Rural America. The President’s Budget sup

ports USDA’s Rural Innovation Initiative, which is designed to promote economic opportunity and job creation in rural communities. To sup

port this innovative approach, USDA plans to set-aside roughly 5 percent of the funding from approximately 20 existing programs and allocate these funds competitively among regional pilot projects tailored to local needs and opportunities. This targeting effort will allow USDA to priori

tize areas with the greatest need and potential by encouraging comprehensive and innovative approaches to foster rural revitalization.

The Budget also helps lay the foundation for job creation and expanded economic opportunities throughout rural America by:

• Expanding access to broadband services by offering $418 million in loans and grants to

transition rural communities into the mod

ern information economy.

• Nurturing local and regional food systems and expanding access to healthy foods for

low-income Americans in rural and urban

food deserts.

• Funding a variety of renewable energy pro

grams across the Department, including support for biorefineries to utilize advanced biomass crops, research designed to create cellulosic and advanced biofuels, and assis

tance to help transition fossil fu el-dependent electric utilities to renewable energy. Taken together, these programs support the US DA’s effort to help America in achieving energy independence and reducing greenhouse gas

emissions. • Supporting the President’s climate change policy by promoting activities including car

bon sequestration, renewable energy, and water conservation. In addition, the Budget supports a science-based, risk-management approach to mitigate the effects of climate change by stressing forest and watershed resiliency designed to minimize the loss of large carbon sinks.

• Developing rural recreation and employ

ment opportunities, including fishing and hunting for local residents and tourists by proposing more than $700 million to re

store and manage public lands. The Bud

get also fully funds the Voluntary Public Access and Habitat Incentive Program, which encourages private landowners to voluntarily open their land to the public for hunting and fishing.

Strengthens Nutrition Assistance and Promotes Healthy Eating. At a time of continued need, the President’s Budget provides $8.1 billion for discretionary nutrition program supports, which is a $400 million increase over the 2010 enacted level. Funding supports 10 million participants in the WIC program, which is criti

cal to the health of pregnant women, new moth

ers, and their infants. The Budget also supports a strong Child Nutrition and WIC reauthorization package so that schoolchildren have access to healthy meals and to help fulfill the President’s pledge to end childhood hunger. The Budget pro

vides $10 billion over 10 years for program re

forms aimed at improving program access, estab

lishing high standards for the nutritional quality of food available in school, exploring new strat

egies for reducing hunger and improving chil

dren’s food choices, and strengthening program
management.

Responds to the Needs of Low-Income

Americans. The President continues to sup

port the nutrition provisions incorporated in the American Recovery and Reinvestment Act (ARRA). Participants in the Supplemental Nutri

tion Assistance Program (SNAP) will continue to receive enhanced benefits at an average value of about $20 per person per month. The Budget alsoTHE BUDGET FOR FISCAL YEAR 2011 

### 47

proposes to extend the ARRA provision in SNAP that temporarily eliminates the time limits for certain working-age, low-income adults without dependents for an additional fiscal year. This extension helps remove access barriers to SNAP and increase food purchasing power among some of the hardest-to-reach populations.

Increases Funding for the Agriculture and

Food Research Initiative. The Budget pro

vides $429 million, the largest funding level ever, for competitive peer-reviewed research grants through the Agriculture and Food Research Ini

tiative. This increase is designed to foster a more robust research program within USDA with special emphasis related to the following five core areas: climate change, bioenergy, childhood obesity, world hunger, and food safety.

Focuses Forest Restoration Resources. The President’s Budget focuses Forest Service resources to support more watershed and ecosys

tem improvement efforts based upon a variety of management actions, including mechanical re

moval of timber, road decommissioning, and wild

life habitat improvement. The Budget adopts an ecosystem-based approach to forest management that focuses on enhancing forest and watershed resiliency, preventing the loss of large carbon sinks, and maintains jobs. To address the need to protect forest resources and wildlife habitat in an era of global climate change, the Budget establishes a pilot program for long-term, land

scape scale restoration activities that empha

size resiliency, health, and sustainable economic development.

Budgets Responsibly for Wildfires. The Budget fully funds the 10-year average cost of fire suppression and includes a $282 million dis

cretionary funding reserve to be used only when the $1.2 billion in appropriated 10-year average funding is exhausted. The Budget also priori

tizes hazardous fuels reduction activities in the wildland-urban interface where they are most ef

fective—particularly in communities that are on track to meet Firewise standards, have identified acres to be treated in Community Wildfire Pro

tection Plans (or the equivalent), and have made an investment in implementing local solutions to protection against wildland fire.

Enhances Food Safety. The President’s Budget takes important steps to improve the safety of the Nation’s supply of meat, poultry, and processed egg products and works to make cer

tain that these products are wholesome and accu

rately labeled and packaged. Consistent with the recommendations of the President’s Food Safety Working Group, the Budget supports increas

ing regulatory testing and baseline studies and strengthening USDA’s Public Health Epidemiol

ogy Program to support the inter-agency Feder

al-State Foodborne Disease Outbreak Response

Team. These efforts will contribute toward a reduction in foodborne illness and improvements in public health and safety.

Supports Conservation on Private Lands. The Budget will accelerate the protection of our natural resources by strategically targeting fund

ing to high priority program areas. This includes funding the Wetlands Reserve Program at a level to enable the restoration and protection of almost 200,000 additional acres of wetlands, providing over $1.2 billion for the Environmental Quality Incentives Program to help farmers comply with regulatory requirements and protect natural re

sources, providing a 67 percent increase in fund

ing over the 2010 enacted level to reduce nutrient loading in the Chesapeake Bay, and enrolling 12 million acres into the Conservation Stewardship Program to improve water quality and enhance energy efficiency. The Budget also provides fund

ing to support the installation of high-impact tar

geted conservation practices on 1.5 million acres in priority landscapes, including the Bay-Delta region in California and the Upper Mississippi.

Promotes Agricultural Exports. The Bud

get includes $54 million in discretionary funding to enhance USDA’s efforts to promote the export of U.S. agricultural products. This funding will double the Department’s cost-share assistance to agricultural trade associations in support of overseas market development activities, such as technical assistance and market research ($35 million); increase exporter assistance, in-country

### 48 DEPARTMENT OF AGRICULTURE

market promotions, and trade enforcement activ

ities to remove non-tariff trade barriers, such as unwarranted sanitary and phytosanitary stan

dards placed on U.S. commodities by other coun

tries ($10 million); and double a grant program to assist U.S. specialty crop producers in overcom

ing sanitary, phytosanitary, and other technical barriers to trade ($9 million).

Reforms Farm Payments and Delivery of Crop Insurance. The Budget proposes to limit farm subsidy payments to wealthy farmers by re

ducing the cap on direct payments by 25 percent and reducing the Adjusted Gross Income (AGI) payment eligibility limits for farm and non-farm income by $250,000 over three years. The Farm Bill currently precludes an individual or an entity from receiving any benefit in a year where their non-farm AGI exceeds $500,000 and precludes receipt of any direct payments when their farm AGI exceeds $750,000. This proposal would allow USDA to target payments to those who need and can benefit from them most, while at the same time preserving the safety net that protects farm

ers against low prices and natural disasters. The Budget also includes a proposal that will save billions of dollars by reforming how the Federal Government administers the crop insurance pro

gram. Crop insurance companies currently ben

efit from huge windfall profits due to the struc

ture and terms of the Government’s contract with the companies, called the Standard Reinsurance Agreement (SRA). Through the SRA renegotia

tion process, which will occur in 2010, USDA will pursue reforms to the financial terms in the SRA that will allow the Department to offer the same program benefits to farmers and ranchers with significantly reduced costs—saving $8 billion
over 10 years.



### Department of Agriculture (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority:

Commodities and International

����������������������������������������������������������������� 3,240 4,253 4,099

Rural Development

����������������������������������������������������������������������������������� 2,597 2,983 2,646

Forest Service

������������������������������������������������������������������������������������������� 4,757 5,316 5,377

Conservation

��������������������������������������������������������������������������������������������� 968 1,009 964

Food and Nutrition Service

����������������������������������������������������������������������� 7,300 7,880 8,132

Research

��������������������������������������������������������������������������������������������������� 2,648 2,846 2,723

Marketing and Regulatory Programs

�������������������������������������������������������� 2,012 2,095 2,057

Central Administration

������������������������������������������������������������������������������� 510 636 663
Subtotal, excluding items below

���������������������������������������������������������������� 24,032 27,018 26,661
Receipts

���������������������������������������������������������������������������������������������������� –58 –70 –71

Legislative proposal, Rural Housing receipts

������������������������������������������� — — –7

Mandatory savings proposals

������������������������������������������������������������������� — — –812

Total, Discretionary budget authority

� �������������������������������������������������������������� 23,974 26,948 25,771

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������������� 6,892

— — Budget authority from supplementals

������������������������������������������������������������� 1,366 400

—THE BUDGET FOR FISCAL YEAR 2011 

### 49

Department of Agriculture

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Total, Discretionary outlays

����������������������������������������������������������������������������� 25,063 28,402 27,143

Memorandum: Outlays from American Recovery and Reinvestment Act

������� 507 1,831 1,499

Mandatory Outlays:

Food and Nutrition Service

����������������������������������������������������������������������� 66,210 78,406 82,393
Commodity Credit Corporation

����������������������������������������������������������������� 11,411 14,224 12,664
Crop Insurance

����������������������������������������������������������������������������������������� 7,889 6,954 7,555

Natural Resources Conservation Service

������������������������������������������������� 1,584 2,124 2,772
Agricultural Marketing Service

������������������������������������������������������������������ 1,106 1,276 1,270

Forest Service

������������������������������������������������������������������������������������������� 816 874 757

Rural Development including liquidating accounts

������������������������������������ –152 –933 –2,133

Receipts, reestimates and all other programs

� ������������������������������������������ –4,615 –1,980 –132

Total, Mandatory outlays

��������������������������������������������������������������������������������� 84,249 100,945 105,146

Memorandum: Outlays from American Recovery and Reinvestment Act

������� 4,626 10,843 11,966

Total, Outlays

�������������������������������������������������������������������������������������������������� 109,312 129,347 132,289

Credit activity

Direct Loan Disbursements:

Farm Loans

����������������������������������������������������������������������������������������������� 1,825 2,280 1,745
Commodity Credit Corporation

����������������������������������������������������������������� 8,291 8,593 8,346

Rural Utilities Service

�������������������������������������������������������������������������������� 6,005 8,820 10,836
Rural Housing Service

������������������������������������������������������������������������������ 2,042 4,300 4,116

Rural Business Service

����������������������������������������������������������������������������� — 1 17

P

. L

. 480

����������������������������������������������������������������������������������������������������� 32 62

— All other programs

�������������������������������������������������������������������������������������� 60 84 80

Total, Direct loan disbursements

��������������������������������������������������������������������� 18,255 24,140 25,140

Guaranteed Loan Commitments:

Farm Loans

����������������������������������������������������������������������������������������������� 2,594 2,759 2,439
Commodity Credit Corporation

������������������������������������������������������������������ 5,357 5,448 5,500

Rural Utilities Service

�������������������������������������������������������������������������������� 5 22 32
Rural Housing Service

������������������������������������������������������������������������������ 14,166 14,200 13,627

Rural Business Service

����������������������������������������������������������������������������� 1,110 2,158 2,275

Total, Guaranteed loan commitments

������������������������������������������������������������� 23,232 24,587 23,873

### 51 The Department of Commerce (DOC) has a broad mandate to advance economic growth, jobs and opportunities for the American people. It has cross-cutting responsibilities in the areas of trade, technology, entrepreneurship, economic development, environmental stewardship, and statistical research and analysis. To support this important work, the 2011 Budget allocates $8.9

billion to DOC.

Invests in America’s Innovation and Competitiveness. The Budget includes $712

million for National Institute of Standards and Technology (NIST) laboratories as part of the

President’s Plan for Science and Innovation. This funding will support advanced measurement and standards development at NIST that will facilitate the economy-wide development and adoption of a

wide variety of new technologies, ranging from nanotechnology and computer security advances to energy conservation systems. The Budget also provides $80 million for the Technology In novation Program, which invests in high-impact re search

that will address critical national needs and advance innovation. The Hollings Manufacturing Extension Partnership will receive $130 million

to enhance the competitiveness of the Nation’s manufacturers by facilitating the adoption of more efficient manufacturing processes. In addition, the President’s Budget gives the U.S. Patent and Trademark Office (USPTO) full access to its fee collections and will strengthen USPTO’s efforts to improve the speed and quality of patent examinations through a fee surcharge. **Funding Highlights:**

• Invests in American economic competitiveness and job creation by promoting innovation in manufacturing, advancing standards research and technology, protecting intellectual property rights, and deploying broadband.

• Promotes opportunities for American exporters in new markets and reduces barriers to sales

abroad.

• Invests in smarter economic development through the promotion of regional innovation

clusters.

• Advances climate science and services and supports critical satellite programs to monitor the

Earth’s weather and climate as well as global sea-level change.

• Implements the President’s National Ocean Policy by supporting coastal zone management

and marine spatial planning, expanding catch-share based fisheries management, and accelerating research on ocean acidification.

• Invests additional resources to improve economic and household statistics to analyze our economic health more accurately and target Government funds more precisely. 

# DEPARTMENT OF COMMERCE

### 52 DEPARTMENT OF COMMERCE

Promotes American Exports. The Budget provides $534 million, a 20-percent increase, to the International Trade Administration (ITA), so it can help launch the National Export Initiative, a broader Federal strategy to increase American exports. ITA will strengthen its efforts to pro

mote exports from small businesses, help enforce free trade agreements with other nations, fight to eliminate barriers to sales of U.S. products, and improve the competitiveness of U.S. firms.

Expands Access to Broadband. Broadband is a central part of the infrastructure necessary for the economy to create jobs and thrive in this century. During 2011, Commerce’s National Tele

communications and Information Administration will focus on administering the $4.7 billion pro

gram to expand broadband deployment, as well as programs to improve broadband adoption and data collection, which were funded by the Ameri

can Recovery and Reinvestment Act. The Budget will also achieve savings by eliminating the Public Telecommunications Facilities Program, consolidating support for public broadcasters into the Corporation for Public Broadcasting.

Enhances Regional Economic Competi

tiveness. Competitive, high-performing regional economies are essential to national growth. The Budget supports growth strategies based on stron

ger regional clusters of economic activity through funding in the Department’s Economic Develop

ment Administration (EDA), the Small Business Administration (SBA), as well as the Department of Labor with other agencies in key support roles. As part of the Administration’s place-based ini

tiative, the Budget provides $75 million in region

al planning and matching grants within EDA to support the creation of Regional Innovation Clus

ters that leverage regions’ competitive strengths to boost job creation and economic growth. Supports Improvements in Weather Fore

casting, Climate Monitoring, Fisheries Man

agement, and Ocean Programs. The Budget maintains continuity of National Oceanic and Atmospheric Administration (NOAA) satellite coverage needed for monitoring weather and climate by providing over $2 billion to fund the development and acquisition of NOAA’s polar orbiting and geo-stationary weather satellite systems, satellite-borne measurements of sea level and other climate variables, and other space-based observations. The Budget supports enhancements to climate science and services, in

cluding improved modeling and assessments at global and regional levels. The Budget advances the President’s National Ocean Policy with fund

ing for coastal zone management and planning, competitive grants in support of regional ocean partnerships, integrated ecosystem assessments, catch-share based fisheries management, and

research on ocean acidification.

Strengthens Key Statistical Programs. The Budget provides $1.3 billion to the Census Bureau to process, tabulate, and release 2010 Census data, conduct extensive evaluations of the census, improve the data collection methods of the American Community Survey, and begin a continuous update process of the Census Bureau’s geospatial and address data, which is expected to produce long-run cost savings. These initiatives will provide more accurate data for decision-mak

ers at all levels of government and in the private sector. Funds are also provided to prepare for the

2012 Economic and Government Censuses and to improve an important measure of poverty. Final

ly, the Budget provides additional funding for the Bureau of Economic Analysis to develop new data series on key economic sectors (such as manufac

turing and retail trade) and household consump

tion, income, and expenses. These measures will provide policymakers more timely, detailed,

and robust data on the state of the business and household sectors of the economy.THE BUDGET FOR FISCAL YEAR 2011 

### 53

Department of Commerce (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority:
Departmental Management:
Salaries and Expenses

������������������������������������������������������������������������ 53 58 66
Steel Loan Program

����������������������������������������������������������������������������� — — –43

Herbert C

. Hoov er Building Renovation

����������������������������������������������� 5 22 17
Office of the Inspector General

������������������������������������������������������������ 28 27 29

Subtotal, Departmental Management

������������������������������������������������������� 86 107 69

Economic Development Administration:
Salaries and Expenses

������������������������������������������������������������������������ 37 38 40

Economic Development Assistance Programs

������������������������������������ 221 255 246
Regional Innovation Cluster Initiative (non-add)

���������������������������������� — 50 75

Subtotal, Economic Development Administration

������������������������������������� 258 293 286

Bureau of the Census:
Salaries and Expenses

������������������������������������������������������������������������ 234 259 280
Periodic Censuses and Programs

�������������������������������������������������������� 2,905 6,966 987
Decennial Census (non-add)

��������������������������������������������������������������� 2,689 6,751 740

Subtotal, Bureau of the Census

���������������������������������������������������������������� 3,139 7,225 1,267

Economics and Statistics Administration

�������������������������������������������������� 91 97 113

International Trade Administration

������������������������������������������������������������� 420 446 534
Bureau of Industry and Security

��������������������������������������������������������������� 84 100 113

Minority Business Development Agency

��������������������������������������������������� 30 32 32
National Oceanic and Atmospheric Administration:
Operations, Research, and Facilities

��������������������������������������������������� 3,130 3,413 3,408
Procurement, Acquisition and Construction

����������������������������������������� 1,242 1,358 2,184

Other Accounts

������������������������������������������������������������������������������������ 82 82 –38

Subtotal, National Oceanic and Atmospheric Administration

�������������������� 4,454 4,853 5,554

Patent and Trademark Office:
Program Level

�������������������������������������������������������������������������������������� 1,899 1,887 2,322

Fees

����������������������������������������������������������������������������������������������������� –1,901 –2,003 –2,322

Subtotal, Patent and Trademark Office

����������������������������������������������������� –2 –116

— National Institute of Standards and Technology:

Scientific and Technical Research Services

����������������������������������������� 478 520 587
Industrial Technology Services

������������������������������������������������������������� 170 195 210
Technology Innovation Program (non-add)

������������������������������������������ 60 70 80
Manufacturing Extension Partnership (non-add)

���������������������������������� 110 125 130

Construction of Research Facilities

������������������������������������������������������ 172 147 125

Subtotal, National Institute of Standards and Technology

������������������������� 820 862 922

### 54 DEPARTMENT OF COMMERCE



### Department of Commerce—Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

National Telecommunications and Information Administration:
Salaries and Expenses

������������������������������������������������������������������������ 16 20 22
Broadband Technology Opportunities Program Administration

������������ — — 24

Public Telecomm

. and Facilities Planning and Constr uction

���������������� 18 20

— Subtotal, National Telecommunications and Information Administration

�� 34 40 46

All other

������������������������������������������������������������������������������������������������ –2 –7 –8

Total, Discretionary budget authority

� �������������������������������������������������������� 9,412 13,932 8,928

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������� 7,845 –128

— Budget authority from supplementals

������������������������������������������������������� 40

— —
Total, Discretionary outlays

����������������������������������������������������������������������� 8,967 13,535 8,953

Memorandum: Outlays from American Recovery and Reinvestment Act

���� 566 2,473 2,249

Mandatory Outlays: Digital Television Transition and Public Safety Fund

� ���������������������������� 1,296 506 125

Grants to Manufacturers of Worsted Wool Fabrics: Existing law

������������������������������������������������������������������������������������� 1 10 5 Legislative proposal

������������������������������������������������������������������������� — — –5

All other

������������������������������������������������������������������������������������������������ –101 191 176

Total, Mandatory outlays

��������������������������������������������������������������������������� 1,196 707 301

Total, Outlays

�������������������������������������������������������������������������������������������� 10,163 14,242 9,254

Credit activity

Direct Loan Disbursements:
Fisheries Finance Direct Loan Financing account

������������������������������������ 23 23 23

Total, Direct loan disbursements

��������������������������������������������������������������������� 23 23 23

### 55 While the U.S. military is addressing ongoing challenges—such as drawing down responsibly in Iraq and carrying out the President’s strategy in Afghanistan and Pakistan—the Department of Defense (DOD) is identifying long-term stra

tegic needs and targeting resources toward its highest priorities. These priorities, developed in concert with DOD’s Quadrennial Defense Re

view, include taking care of our men and women in uniform, rebalancing our forces to address **Funding Highlights:**

• Provides $548.9 billion for the Department of Defense base budget in 2011, a 3.4 percent

increase over the 2010 enacted level.

• Includes $33.0 billion for a 2010 supplemental request and $159.3 billion for 2011 to support ongoing overseas contingency operations, including funds to execute the President’s new strategy in Afghanistan and Pakistan.

• Maintains ready forces and continues efforts to rebalance military forces to focus more on today’s wars, and provides capabilities to deter or if necessary engage in future conflicts.

• Continues strong support for our men and women in uniform through a robust benefits package including pay increases that keep pace with the private sector.

• Supports access to medical care to the more than 9.5 million beneficiaries: active military members and their families, military retirees and their families, dependent survivors, and eligible Reserve Component members and families.

• Supports wounded warrior transition units and centers of excellence in vision, hearing, traumatic brain injury, and other areas to continuously improve the care provided to wounded, ill, and injured servicemembers.

• Continues to reform defense acquisition, reducing its use of high-risk contracts related to time-and-materials and labor-hours by 17 percent through the end of 2011, while modernizing key weapons systems to provide our troops with the best technology to meet battlefield needs, and eliminating or reconfiguring lower-priority acquisitions.

• Prioritizes resources by ending or reducing several programs, including the C-17 aircraft, the Joint Strike Fighter Alternate Engine program, the Third Generation Infrared Surveillance program, and the Net-Enabled Command Capability program.

• Supports a reconfigured ballistic missile defense strategy, in line with the President’s policy, to

better address current threats. 

# DEPARTMENT OF DEFENSE

### 56 DEPARTMENT OF DEFENSE

both current and future conflicts, and reforming business practices, such as developing and pur

chasing weapons.

The 2011 Budget for DOD requests an in

crease of $18.2 billion, or 3.4 percent, from the 2010 enacted level of $530.8 billion. This fund

ing increase allows DOD to address its highest priorities, such as the President’s commitment to reform defense acquisition, develop a ballis

tic missile defense system that addresses mod

ern threats, and continue to provide high quality

healthcare to wounded servicemembers. In addi

tion, the Budget will continue to incorporate into the base those items previously funded in emer

gency supplemental appropriations that should be considered enduring activities that are not driven by specific conflicts.

Supports Missions in Iraq, Afghanistan, and Pakistan (OCO). The President has ordered his military commanders to send an additional 30,000 troops to Afghanistan, which will bring the total number of U.S. forces in Afghanistan to almost 100,000 by 2011. Meanwhile, DOD will continue drawing down its combat forces from Iraq, and all U.S. forces will be withdrawn from Iraq by the end of 2011. To address the costs of increasing military and intelligence operations in Afghanistan and Pakistan and drawing down in Iraq and leaving Iraq’s security forces with the minimum essential capabilities to operate after U.S. forces depart, the Administration is request

ing $33.0 billion in 2010 supplemental funding on top of the $129.6 billion already provided, and a total of $159.3 billion for its 2011 overseas con

tingency operations (OCO) activities. In addition to this DOD funding, the supplemental request will also include funding for Department of State activities in 2010. The Budget includes placehold

er estimates of $50 billion per year for 2012 and beyond. These estimates do not reflect any policy decisions about specific military or intelligence operations, but are only intended to indicate that some as-yet unknown costs are anticipated.

Maintains Readiness for Today’s Chal

lenges. The Administration is committed to providing its service members with the resources needed to be ready to respond to the multiple, complex, and sometimes unconventional threats posed by today’s security environment. The Budget includes robust funding for operations and maintenance, covering such crucial activities as training and operations, pay for a high qual

ity civilian workforce , upkeep of equipment and facilities, repair parts, fuel, and supplies.

Supports Our Nation’s Troops and Their

Families. The Budget continues the Adminis

tration’s commitment to caring for our Nation’s men and women in uniform and promoting the well-being of the families who support them. To meet this objective, the Budget includes funding for a 1.4 percent basic pay raise that will keep military pay increases in line with those in the private sector. In addition to this pay raise, the Budget also includes an average housing increase of 4.2 percent, as well as a variety of monthly special skill-based payments, enlistment and reenlistment bonuses, and other benefits.

The strength of our troops relies on the strength and stability of the families that support them, and the Budget supports these military fami

lies as our servicemembers answer our country’s call to service. Overall, family support programs grow over 3 percent above the 2010 enacted level. Examples include:

• $1.3 billion, an increase of $87 million over the 2010 enacted level, to expand availability for affordable, high-quality

child care services at over 800 child devel

opment centers both in the United States

and overseas.

• $1.9 billion, $37 million over the 2010 en

acted level, for expanded counseling and assistance services, from financial coun

seling to transition and relocation assis

tance, to help families meet the challenges brought on by repeated deployments and family separations.

• $84 million, an increase of $12 million over the 2010 enacted level, for enhanced career and educational opportunities for military spouses through tuition assis

tance and Federal internship programs.THE BUDGET FOR FISCAL YEAR 2011 

### 57

Cares for Wounded, Ill, and Injured

Servicemembers. The 2011 Budget sustains ongoing efforts to provide high quality medi

cal care to the over 9.5 million servicemembers as well as military family and retiree beneficia

ries. This includes support for wounded warrior

transition units and centers of excellence in vi

sion, hearing, traumatic brain injury, and other areas to continuously improve the care provided to wounded, ill, and injured servicemembers, in

cluding:

• $30.9 billion overall for medical care, an increase of 5.8 percent over the 2010

enacted level.

• $669 million to provide care for traumatic brain injury and psychological health.

• $250 million for continued support of mental health and traumatic brain injury research, such as the development of tools to detect and treat post-traumatic stress, and enhancements to suicide prevention

measures.

• Support for DOD’s efforts to update its health information technology infrastruc

ture, while partnering with the Depart

ment of Veterans Affairs and the private sector to pursue the Administration’s goal of building a Virtual Lifetime Elec

tronic Record to deliver care and benefits

to servicemembers and veterans with efficiency and accuracy.

Reforms Acquisition. DOD contracts ac

count for approximately 70 percent of all Federal procurement spending, so DOD reform initia

tives are critical to the Administration’s efforts to improve Government acquisition. The 2010 Budget took important first steps to reform this process; in 2011, DOD will continue these efforts by terminating or delaying programs that are in

adequately justified or not performing well. For example, the Budget ends the C-17 aircraft pro

gram because additional aircraft are not needed, saving $2.5 billion. It also eliminates the Joint Strike Fighter Alternate Engine program, sav

ing $465 million, because this program raises logistical, management, and cost concerns. The Budget saves an additional $73 million by ter

minating the Third Generation Infrared Surveil

lance program, and instead procuring upgraded Space Based Infrared System Satellites in the future; it saves $8.5 million more by eliminating the Net-Enabled Command Capability program, which has been unable to meet its requirements on schedule. The Department will also further reduce its use of high-risk contracts in areas that

relate to time-and-materials and labor hours by 17 percent through the end of 2011, and take steps so that military requirements for weapons are reasonable, program costs and schedules are realistic, and acquisition funding is stable.

Provides Ballistic Missile Defense to

Address Modern Threats. The Administration is committed to a robust defense against emerg

ing missile threats by deploying technology that is proven, cost-effective, and adaptable for coun

tering an evolving security environment. Start

ing in 2011, the new Phased Adaptive Approach will guide missile defense architecture. It will feature incremental deployments of increasingly capable sea- and land-based missile intercep

tors and a range of sensors in Europe to defend against growing ballistic missile dangers. This phased approach will offer more effective defenses against near-term ballistic missile threats and augment the current defense of the U.S. homeland against long-range ballistic missile threats . It will provide for the defense of U.S. deployed forc

es, their families, and our Allies in Europe soon

er and more comprehensively than the previous program, while reaffirming the U.S. commitment to strengthening NATO and integrating U .S. systems with Allied capabilities and networks.

### 58 DEPARTMENT OF DEFENSE

Modernizes Weapon Systems. A major goal of the Administration is to provide the troops with the most effective and modern equipment possible. To accomplish this, the 2011 Budget continues to develop and procure many advanced weapons systems that support both today’s wars

and future conflicts. These include: the F-35 Joint Strike Fighter, a new family of ground vehi

cles, new ships such as the next generation ballis

tic missile submarine, and the P-8 aircraft. The Budget also bolsters capabilities in Unmanned Aerial Vehicles, helicopters, and cyber capabili

ties and electronic warfare, which are key compo

nents in the ongoing task of rebalancing the military to focus on current and emerging threats.



### Department of Defense (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Base budget authority:
Military Personnel

������������������������������������������������������������������������������������� 125,625 134,968 138,541
Operation and Maintenance

���������������������������������������������������������������������� 179,103 184,488 200,248

Procurement

��������������������������������������������������������������������������������������������� 100,886 104,803 112,873
Research, Development, Test and Evaluation

������������������������������������������ 79,392 80,097 76,131
Military Construction

��������������������������������������������������������������������������������� 21,898 21,022 16,924
Family Housing

����������������������������������������������������������������������������������������� 3,163 2,259 1,822
Revolving and Management Funds

���������������������������������������������������������� 3,155 3,118 2,380
Subtotal, Discretionary Base budget authority

������������������������������������������������ 513,222 530,755 548,919

Discretionary Overseas Contingency Operations (OCO) budget authority:

Enacted

����������������������������������������������������������������������������������������������������� 145,741 129,648

— Requested (2011 includes $254 million in U

. S

. Coast Guard funding)

����� — 33,014 159,336
Subtotal, Discretionary OCO budget authority

������������������������������������������������ 145,741 162,662 159,336

Total, Discretionary budget authority (Base and OCO)

����������������������������������� 658,963 693,417 708,255

Memorandum: Budget authority from American Recovery and Reinvestment Act

����� 7,435

— —

Total, Discretionary Outlays (Base and OCO)

������������������������������������������������ 633,797 684,436 714,428

Memorandum: Outlays from American Recovery and Reinvestment Act

���������������������� 238 3,991 2,491

Mandatory Outlays:
Existing law

�������������������������������������������������������������������������������������������������� 2,740 3,605 3,959

Legislative proposal

������������������������������������������������������������������������������������� — — 408
Total, Mandatory outlays

�������������������������������������������������������������������������������� 2,740 3,605 4,367

Total, Outlays

������������������������������������������������������������������������������������������������� 636,537 688,041 718,795THE BUDGET FOR FISCAL YEAR 2011 

### 59

Department of Defense

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

**Credit activity**

Total, Direct loan disbursements

��������������������������������������������������������������������� 172 195 200

### 61 The National Intelligence Program (NIP) funds intelligence activities in several Fed

eral departments and the Central Intelligence Agency (CIA). NIP’s budget is classified, so the 2011 Budget does not publicly disclose funding requests for intelligence activities. This chap

ter highlights key NIP-funded activities without detailing funding information.

Strengthens Capabilities of our Nation’s Intelligence Agencies. To protect America’s national security, the Intelligence Community (IC) provides effective intelligence collection, the analysis of that intelligence, and the produc

tion of finished intelligence products. The IC is responsible for timely and effective dissemina

tion of intelligence to those who need it, rang

ing from the President, to heads of Executive Departments, military forces, and law enforce

ment agencies. To meet this country’s national security challenges, the IC is: strengthening

its component agencies’ ability to collect intelli

gence; maintaining the security of Federal cyber networks; and protecting against the threat of in

ternational terrorism in the United States. The 2011 Budget for NIP supports the Administra

tion’s national security objectives and the new National Intelligence Strategy. The Director of National Intelligence, the Director of the CIA, and Department Secretaries with intelligence organizations will use 2011 funds to defeat ter

rorist networks, prevent the spread of weapons of mass destruction, penetrate and analyze the most difficult targets of interest to U.S. foreign policymakers, and anticipate geopolitical and economic developments of strategic concern.

Supports the President’s Strategy in Afghanistan and Pakistan. The Administra

tion will request 2011 funding and supplemental funding for 2010 to cover the costs of global intel

ligence operations. In particular, the Budget will support the President’s strategy in Afghanistan

and Pakistan and the additional U.S. forces being deployed there. IC collection and analysis play a key role in informing decision-makers at the strategic level and supporting the war fighter at

a tactical level. **Funding Highlights:**

• Strengthens the capabilities of the Nation’s intelligence agencies to furnish timely, accurate,

and insightful intelligence on the capabilities and intentions of foreign powers, including

international terrorist groups.

• Supports the President’s strategy in Afghanistan and Pakistan.

• Enhances Federal cybersecurity capabilities to protect a central part of our Nation’s and economy’s infrastructure.

• Allocates resources in support of a U.S. Go vernment-wide counter terrorism action plan. 

# NATIONAL INTELLIGENCE PROGRAM

### 62 NATIONAL INTELLIGENCE PROGRAM

Enhances Federal Cybersecurity Capa

bilities. The U.S. information infrastructure— including telecommunications and computer networks and systems, and the data that reside on them—is critical to virtually every aspect of

modern life. Threats to our information technol

ogy infrastructure endanger our national and economic security and our citizens’ privacy and, therefore, are an important policy focus of the Government. In 2009, President Obama directed a comprehensive review to assess U.S. policies and structures for cybersecurity. The 2011 Bud

get supports actions detailed in the Cyberspace Policy Review and continues activities begun as part of the Comprehensive National Cybersecu

rity Initiative. Allocates Resources to Support a Coun

terterrorism Plan. The National Counterter

rorism Center (NCTC) has developed a U.S. Gov

ernment-wide counterterrorism action plan. This plan lays out broad strategic objectives aligned with policy objectives to guide the overall imple

mentation of this national strategy on counter

terrorism. The Administration is committed to integrating mission-based budgeting in the coun

terterrorism area with the annual budget process and will work with NCTC, IC, and relevant De

partments, such as Defense, State, and Homeland Security, to direct resources in support of counter

terrorism implementation objectives.

### 63 **Funding Highlights:**

• Provides a $3 billion increase in K-12 education programs, plus up to $1 billion in additional funding if Congress successfully completes a fundamental overhaul of the Elementary and Secondary Education Act (ESEA). Together, these measures would represent the largest funding increase for ESEA programs ever requested.

• Supports needed reforms of Federal K-12 programs to promote college- and careerreadiness, enhance teacher and principal effectiveness, deliver a rigorous and complete education, improve educational options, and prepare our children for the jobs of the future.

• Provides $1.35 billion to expand Race to the Top for school districts as well as States to carry out systemic reform, and $500 million to continue the Investing in Innovation program to test, validate, and scales up effective approaches to student learning.

• Increases the number, and improves the distribution of, effective teachers and principals, by investing $950 million in competitive grants to States and school districts that build comprehensive systems to recruit, prepare, retain, and reward effective teachers and principals.

• Invests $210 million in Promise Neighborhoods, an initiative that integrates school reform with strong family supports and effective community services across an entire neighborhood, so that youth successfully complete high school and continue on to college.

• Expands educational options and increases access to high-quality schools by investing $490 million to grow effective charter schools and other effective, autonomous public schools that achieve results, develop new approaches, and give parents more choices.

• Consolidates 38 K-12 programs into 11 new programs that emphasize competitive funding, accountability for outcomes and flexibility in approaches, and use of evidence to get results.

• Supports the next generation of scientists and engineers by helping States develop and implement math and science instructional practices that are aligned to rigorous college- and career-ready standards and by supporting districts and nonprofit organizations that develop, implement, and evaluate promising and effective programs.

• Increases aid for needy students, reforms Federal student aid programs, and simplifies the financial aid application process.

• Funds new reforms across the Nation’s early learning programs for children birth through age five, so they’re prepared to enter kindergarten ready for success.

• Creates a Workforce Innovation Partnership with the Department of Labor to test and validate effective strategies to improve services under the Workforce Investment Act. 

# DEPARTMENT OF EDUCATION

### 64 DEPARTMENT OF EDUCATION

The President’s Budget proposes a bold strat

egy to achieve the Department of Education’s mission of fostering educational excellence, advancing equity and opportunity, improv

ing student achievement, rewarding successful
outcomes, investing in innovation, and preparing

our Nation’s c hildren for global competitiveness.

Reform Elementary and Secondary School Funding by Setting High Standards, Encouraging Innovation, and Rewarding

Success. The Budget supports the Administra

tion’s new vision for the Elementary and Second

ary Education Act (ESEA). The reauthorized law would encourage States to adopt higher, clearer standards that set the expectation that every student will graduate from high school ready for college and a career. The new law would support dramatic improvements in the quality of assess

ments to measure complex skills and help teach

ers identify and respond to students’ strengths

and needs. The reauthorization would also rec

ognize and reward schools for helping students make important gains, even if they are not yet at grade-level, and offer new flexibility for suc

cessful States and districts to pursue new solu

tions to help all students meet high standards. At the same time, the law would require vigorous efforts to turn around persistently low-perform

ing schools, applying comprehensive strategies that put children first. In support of these ef

forts, the Budget provides a $3 billion increase in funding for K-12 education programs authorized in the ESEA, including $900 million for School Turnaround Grants, and the Administration will request up to $1 billion in additional funding if Congress successfully completes a fundamental

overhaul of the law. Together , these measures would represent the largest funding increase for ESEA programs ever requested.

Expand the Race to the Top, and Open the Competition to School Districts. The $4 billion Race to the Top, created by the American Recovery and Reinvestment Act (Recovery Act), began a competition among States to spur sys

temic and innovative reform across four areas: supporting high academic standards; improving teacher effectiveness and distributing effective teachers more equitably; using data to improve achievement; and turning around low-performing

schools. Not all States will receive Race to the Top grants, but the competition itself has galva

nized key stakeholders across the Nation to re

form State laws and to develop new plans for lift

ing student achievement. The Budget provides $1.35 billion to continue the President’s Race to the Top challenge and to expand the competition from States to school districts that are ready for comprehensive reform.

Increase the Number of Effective Teach

ers and Principals. Great teachers are the key to a high-quality education. Increasing the number of great teachers, especially in disadvan

taged schools, will require major new efforts to help all teachers improve their skills; recognize and reward excellence in the classroom; and help struggling teachers improve or, if need be, exit the classroom. Today, taxpayers invest nearly $3 billion a year in a teacher quality block grant that heavily supports investments with little evidence of or impact on increasing learning. As part of the overhaul of ESEA, the Administration will require States taking formula funds to develop the preconditions for an effective human capital system, beginning with strong evaluation sys

tems. At the same time, the Administration will invest $950 million in a new competitive fund for States and districts that supports bold ap

proaches to recruiting, developing, retaining, and rewarding more effective teachers, particularly in the lowest-performing schools. The Administra

tion is also investing $405 million in supporting successful and innovative pathways into teaching and school leadership.

Invest in Supports for Student Success.

While an isolated schoolhouse with limited hours was adequate in an earlier time, today’s competi

tive global marketplace requires more. Students need to be safe and healthy, and they need a com

plete education that extends beyond the tradi

tional hours. As part of a $1.8 billion investment in the Supporting Student Success initiative, the Budget funds comprehensive supports so that students are mentally and physically healthy and ready to learn. The initiative also reformsTHE BUDGET FOR FISCAL YEAR 2011 

### 65

the 21st Century Community Learning Centers program to focus funding on models that redesign and extend the school day, week, or year to pro

vide additional time for students to engage in ac

ademic activities, additional time for enrichment activities, and time for educators to collaborate and improve instruction.

Provides Expanded Support for Promise Neighborhoods. As part of a $1.8 billion invest

ment in the Supporting Student Success initia

tive, the Budget includes dedicated support for Promise Neighborhoods, modeled after the Har

lem Children’s Zone, which aims to improve col

lege going rates by combining a rigorous K-12 ed

ucation with a full network of supportive services in an entire neighborhood. This initiative would support comprehensive programs that address the needs of children and youth in a targeted area from before the time they are born to their attendance in college. The core principle behind this initiative is that combining both effectiveacademic programs and strong health and socialservice systems can combat the effects of poverty and improve the education and life outcomes of

children.

Grow High-Performing Charter Schools

and Other Innovative Public Schools. Ef

fective charter schools have achieved impressive results in closing achievement gaps. The Budget will invest $490 million to grow these schools and other autonomous public schools that achieve re

sults, develop new approaches, and give parents more choices. The Budget will support new op

tions for students to transfer to high-performing public schools, support successful magnet schools, and require States and districts accepting these

funds to create the conditions for effective schools to grow and ineffective schools to be restructured

or shut down.

Restructure Narrow and Constrained Ed

ucation Programs Into Broad and Flexible Competitions that Fund What Works. The Department of Education funds dozens of pro

grams that narrowly limit what States, districts, and schools can do with funds. Some of these pro

grams have little evidence of success, while oth

ers are demonstrably failing to improve student achievement. The President’s Budget eliminates six discretionary programs and consolidates 38 K-12 programs into 11 new programs that em

phasize using competition to allocate funds, giv

ing communities more choices around activities, and using rigorous evidence to fund what works. The Administration will make sure that, under these competitions, there is an equitable geo

graphic distribution of funds nationwide, includ

ing to rural communities. Building on the Recov

ery Act, the Administration proposes $500 million to expand the Investing in Innovation Fund, which will expand proven models—and fund and evaluate promising ones—for achieving student success. Finally, the Budget dedicates funds for the rigorous evaluation of education programs so that we can scale up what works and eliminate

what does not.

Expand and Reform Early Childhood

Education. Quality early education is an investment that pays off for years to come by preparing the youngest children for a lifetime of learning. The 2011 Budget enables the Adminis

tration to build on the expansion to early learn

ing programs made through the Recovery Act, and realize the President’s plan to reform early childhood education, promote high standards of quality, and focus on results for children from birth through preschool. In the 2011 Budget, the Administration supports pending legislation that

will establish a new Early Learning Challenge Fund administered by the Department of Educa

tion and the Department of Health and Human Services to help States improve the quality of early childhood programs to help children enter school ready to succeed.

Invest in the Next Generation of Scien

tists and Engineers. Our Nation’s eighth grad

ers are scoring below their peers from many Asian and European countries, and we are neither ad

equately closing the achievement gaps in math and science nor providing adequate opportunities for many students from diverse backgrounds. The Budget reflects the Administration’s investment in improving science, technology, engineering, and mathematics (STEM) outcomes and creating

### 66 DEPARTMENT OF EDUCATION

the next generation of scientists and engineers who can help drive economic growth in the com

ing decades. The Budget provides $300 million in new grants to States to develop and implement instructional practices and improve teaching and learning in science and math aligned to new high standards. The Budget also dedicates $150 mil

lion within the Investing in Innovation Fund to competitive grants for school districts, nonprof

its, and other organizations to test, validate, and scale promising strategies to improve teaching and accelerate student learning in STEM sub

jects. The Department of Education will work

with the National Science Foundation and other Federal agencies to identify the most effective interventions that can help States, schools, and teachers improve STEM outcomes.

Increase Pell Grants and Put Them on a Firm Financial Footing. Pell Grants have helped millions of Americans afford college, yet in recent decades, growth in their value has fallen far behind the growth in college costs. The Recovery Act and 2009 appropriations bill increased the maximum Pell Grant by more than $600 for a total award of $5,350, and the maximum award will increase to $5,550 in 2010. The Budget pro

poses to make that increase permanent and put them on a path to grow faster than inflation every year. The Budget also addresses a second prob

lem: Pell Grants currently function much like

an e ntitlement, yet they are funded through an

annual appropriations process that can fall be

hind actual demand for the grants. The Budget proposes to make Pell Grant funding mandatory so that adequate Pell Grant funding is available

every year.

Expand Financial Aid for Students and Make Historic Investments in Improving Education, from Cradle Through College. The Budget supports legislation that has passed the House and is pending in the Senate that would reform student lending to eliminate tens of billions of dollars in wasteful subsidies to banks, and instead, provide loans directly to students on an efficient basis that uses private and nonprof

it companies to deliver services. This measure would then use savings to make historic invest

ments to increase college access and success, and would lay a foundation for success for America’s youngest children. In addition to expanded Pell Grants and a simplified student aid system, these

investments include a new American Graduation Initiative that will strengthen and support Amer

ica’s community colleges, focus on college comple

tion, and graduate 5 million more students by 2020. Finally, to help graduates overburdened with student loan debt, the Administration will strengthen income-based repayment plans for student loans by reducing monthly payments and shortening the repayment period so that overbur

dened borrowers will pay only 10 percent of their discretionary income in loan repayments and can have their remaining debt forgiven after 20 years.

Spur Partnership and Innovation in Voca

tional Rehabilitation and Adult Education. The Budget seeks $60 million in innovation funds to support seamless delivery of services and im

proved outcomes for people with disabilities and adults seeking basic skills. Under a new Part

nership for Workforce Innovation, the Depart

ments of Education and Labor will coordinate their innovation grants and work with other Fed

eral agencies to break down program silos and to

build and share evidence of what works.

Evaluate Rigorously Federal Education Programs. The Budget reflects the Administra

tion’s commitment to rigorous evaluations that distinguish between what works and what doesn’t so we do not waste taxpayer dollars. Compared to two years ago, the current request represents a nearly 20 percent increase in the investment in the development, evaluation, and dissemination

of education interventions that increase student learning and achievement through the Institute

of Education Sciences. Additional funds will be used to evaluate Federal education programs rig

orously, particularly investments launched under the Recovery Act. The increase in education re

search and evaluation will provide practitioners and policy makers with effective tools for prepar

ing students for success in college and the work

force.THE BUDGET FOR FISCAL YEAR 2011 

### 67

Department of Education (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority: Legislative proposal, Elementary and Secondary Education Act:
College and Career Ready Students 1

������������������������������������������������������� 14,492 14,492 14,492

School Turnaround Grants

������������������������������������������������������������������������� 546 546 900
Race to the Top

������������������������������������������������������������������������������������������ — — 1,350
Investing in Innovation

������������������������������������������������������������������������������� — — 500
English Learner Education

������������������������������������������������������������������������� 730 750 800
Effective Teaching and Learning for a Complete Education

����������������������� 979 920 1,015
College Pathways and Accelerated Learning

��������������������������������������������� 51 103 100

Excellent Instructional Teams

�������������������������������������������������������������������� 3,181 3,505 3,855
Expanding Educational Options

����������������������������������������������������������������� 369 409 490
Supporting Student Success

���������������������������������������������������������������������� 1,795 1,541 1,786
Special Education State Grants 2

�������������������������������������������������������������������� 12,319 12,319 12,569
Career and Technical Education Programs

����������������������������������������������������� 1,272 1,272 1,272

Adult Education State Grants

�������������������������������������������������������������������������� 554 628 612

Workforce Innovation Fund

����������������������������������������������������������������������������� — — 60
Federal Student Aid:
Supplemental Educational Opportunity Grants

�������������������������������������������� 757 757 757
Federal Work Study

������������������������������������������������������������������������������������ 980 980 980 Higher Education: Minority Serving Institutions—Disretionary funding

������������������������������������ 516 613 642
Minority Serving Institutions

— Mandatory funding (non-add)

���������������������� 278 278 278
TRIO programs—Discretionary funding

������������������������������������������������������ 848 853 853
TRIO programs

— Mandatory funding (non-add)

����������������������������������������� 57 57 57

GEAR UP

���������������������������������������������������������������������������������������������������� 313 323 323

Student Aid Administration

������������������������������������������������������������������������������ 753 870 1,170

Institute of Education Sciences

����������������������������������������������������������������������� 617 659 739

All other

����������������������������������������������������������������������������������������������������������� 5,173 5,241 4,432
Total, Discretionary budget authority 3

����������������������������������������������������������������� 46,245 46,781 49,697

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������������������� 81,124 — — Total, Discretionary outlays

����������������������������������������������������������������������������������� 44,971 46,743 46,740

Memorandum: Outlays from American Recovery and Reinvestment Act

������������� 14,154 44,054 20,304

Mandatory Outlays: Legislative proposal, Federal Direct Student Loans

���������������������������������������� –4,263 –6,389 –9,244
Legislative proposal, Federal Family Education Loans

����������������������������������� –26,175 –12,649 –106
Legislative proposal, Perkins Loan Program

��������������������������������������������������� — — –736

### 68 DEPARTMENT OF EDUCATION



### Department of Education

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Legislative proposal, Federal Pell Grants

����������������������������������������������������� 14,432 24,076 28,928
Academic Competitive/SMART Grants

�������������������������������������������������������� 607 836 824
Vocational Rehabilitation (VR) State Grants

������������������������������������������������ 2,766 2,986 3,080

All other

����������������������������������������������������������������������������������������������������������� 71 421 1,993
Total, Mandatory outlays

��������������������������������������������������������������������������������������� –12,562 9,281 24,739

Memorandum: Outlays from American Recovery and Reinvestment Act

������������� 6,849 6,886 2,498

Total, Outlays

�������������������������������������������������������������������������������������������������������� 32,409 56,024 71,479

Credit activity

Direct Loan Disbursements: Historically Black College and University Capital Financing

��������������������������� 120 160 186

Federal Direct Student Loans

������������������������������������������������������������������������� 37,770 67,754 132,427

TEACH Grants

������������������������������������������������������������������������������������������������ 49 52 65
Temporary Student Loan Purchase Authority

������������������������������������������������� 62,796 28,456 972

Federal Perkins Loans

������������������������������������������������������������������������������������ — — 1,355

Total, Direct loan disbursements

��������������������������������������������������������������������������� 100,735 96,422 135,005

Guaranteed Loan Disbursements:
Federal Family Education Loans

��������������������������������������������������������������������� 65,346 53,082 — Total, Guaranteed loan disbursements

����������������������������������������������������������������� 65,346 53,082 —

1 Program level

. Budget authority is $2,906 million less than prog ram level in 2009 and $841 million less than program level in 2011

.

2 Program level

. Budget authority is $1,736 million less than prog ram level in 2009 and $841 million less than program level in 2011

.

3 Program level

. The Budget author ity is $4,889 million less than program level in 2009

. The 2009 and 2010 discretionar y totals do not include mandatory changes enacted in the appropriation bills for those years

. The 2011 discretionar y total is net of a $597 million rescission of Academic Competitiveness/ SMART Grant balances and a $56 million increase over the VR State Grants baseline

.

### 69 The President’s 2011 Budget provides $28.4 billion for the Department of Energy (DOE) to support scientific innovation, develop clean and secure energy technologies, maintain national security, and reduce environmental risk.

Invests in the Sciences. The 2011 Budget

continues the President’s Plan for Science and Innovation. The Budget provides $5.1 billion for the Office of Science, including $1.8 billion for basic energy sciences to discover novel ways to produce, store, and use energy. The Budget also expands graduate research fellowship programs that will train students in critical energy-related fields. The 2011 Budget includes $300 million for the Advanced Research Projects Agency-Energy, to accelerate game-changing energy technologies in need of rapid and flexible experimentation or engineering. **Funding Highlights:**

• Supports high-risk, high-payoff transformational research and development projects with $300

million for the recently established Advanced Research Projects Agency

– Energy (ARPA-E).

• Supports and encourages the early commercial deployment of innovative energy technologies

with an additional $36 billion in guaranteed loan volume authority for advanced nuclear power plants and an additional $500 million in credit subsidy to support $3 to $5 billion in loan
guarantees for innovative energy efficiency and renewable energy projects.

• Provides a 4.6 percent, or $226 million, increase in funding at the Office of Science for basic

research and world-leading laboratories to support transformational scientific discoveries and

accelerate solutions to our Nation’s most pressing challenges.

• Invests $2.3 billion in applied energy research and development to position the United States

as the world leader in energy technology that will address climate change, develop new industries, and create new jobs.

• Accelerates the transition to a low-carbon economy through support of development and deployment of clean energy technologies such as solar, biomass, geothermal, wind, nuclear,

and low-carbon emission coal power.

• Reduces security risks through major increases in funding for the detection, elimination, and securing of nuclear material and radiological sources worldwide and the maintenance of a safe, secure, and effective nuclear weapons stockpile.

• Continues the Nation’s efforts to reduce environmental risks and safely manage nuclear

materials. 

# DEPARTMENT OF ENERGY

### 70 DEPARTMENT OF ENERGY

Encourages the Early Commercial Use of New, Innovative Energy Technologies that

Will Reduce Greenhouse Gas Emissions. The Budget substantially expands support for DOE loan guarantees for innovative energy technologies, by adding $36 billion in new loan authority (for a total of $54.5 billion) for nuclear power facilities and an additional $500 million in credit subsidy to support $3 to $5 billion in loan guarantees for innovative energy efficiency and renewable energy projects. The loan guar

antee program also will continue to support a range of commercial renewable energy programs and other facilities that help reduce pollutants and greenhouse gases while simultaneously creating clean energy jobs and contributing to long-term economic growth and international competitiveness.

Invests in Smart, Energy Efficient, and Reliable Electricity Delivery Infrastruc

ture. The Budget continues to support the mod

ernization of the Nation’s electric grid, by invest

ing in research, development and demonstration of smart-grid technologies that will spur the tran

sition to a smarter, more efficient, secure and reli

able electric system. The end result will promote energy- and cost-saving choices for consumers, reduce emissions, and foster the growth of renew

able energy sources like wind and solar. In addi

tion, the Budget supports the Power Marketing Administration to reliably operate, maintain, and rehabilitate the Federal hydropower and trans

mission systems.

Advances the Development of Carbon Capture and Storage Technologies. The Bud

get supports a balanced research and develop

ment (R&D) portfolio of carbon capture and stor

age technologies. The $545 million for climate change technology funding provided for Fossil Energy R&D in the 2011 Budget will help reduce greenhouse gas emissions by focusing resources to develop carbon capture technologies with broad applications to advanced power systems, existing power plants, and industrial sources. Invests in Clean Energy Technologies to Reduce Dependence on Oil and Accelerate the Transition to a Low-Carbon Economy. The Budget provides support for accelerating re

search, development, demonstration of nuclear technologies, and the commercialization of new nuclear power facilities and various clean ener

gy technologies. Nearly $2.4 billion is provided for energy efficiency and renewable energy pro

grams, an increase of $113 million over the 2010 appropriation, including $302 million for solar energy, $220 million for biofuels and biomass R&D, $325 million for advanced vehicle technolo

gies, and $231 million for energy efficient building technologies. These investments will help reduce dependence on oil and create long-term, sustain

able economic growth in the low-carbon indus

tries of the future, helping to foster long-term job creation. The Budget also eliminates funding for programs that provide inefficient fossil fuel sub

sidies that impede investment in clean energy

sources and undermine efforts to deal with the threat of climate change.

Reduces Proliferation Risks and Pro

motes the Safety, Security, and Reliability of the Nuclear Weapons Stockpile Without Nuclear Testing. The Budget provides $2.7 bil

lion, an increase of $550 million over the 2010 ap

propriation, to prevent the proliferation of nucle

ar weapons. This increase supports the strategy to move toward a world without nuclear weapons that the President announced in his April 2009, speech in Prague. This investment fully funds ef

forts to: secure nuclear material; develop technol

ogy to detect and deter nuclear testing and smug

gling; and support international nonproliferation treaties, regulatory controls, and safeguards. Development work on the reliable replacement warhead has ceased. The 2011 Budget funds $8.1 billion, $750 million over the 2010 Budget, to improve the nuclear stockpile’s safety, security,

and effectiveness with more extensive life exten

sion programs, upgrades to the infrastructure supporting the life extension programs, and new initiatives in naval reactors work. Funding for the stockpile and naval reactors work increases by about 10 percent over 2010 funding.THE BUDGET FOR FISCAL YEAR 2011 

### 71

Protects the Public from Harmful Ex

posure to Radioactive Waste and Nuclear

Materials. The Environmental Management program continues to clean up the legacy of waste and contamination at sites used to produce nuclear weapons and conduct energy research.

The Administration has determined that Yucca Mountain, Nevada, is not a workable option for a nuclear waste repository and will discontin

ue its program to construct a repository at the mountain in 2010. The Department will carry

out its responsibilities under the Nuclear Waste Policy Act within the Office of Nuclear Energy

as it develops a new nuclear waste management
strategy.



### Department of Energy (In millions of dollars)

**Actual**
**2009 Estimate** 

**2010 2011** 

Spending

Discretionary Budget Authority: National Defense: National Nuclear Security Administration

������������������������������� 9,121 9,877 11,215

Other Defense Activities

��������������������������������������������������������� 1,314 847 878
Energy Resources

���������������������������������������������������������������������� 4,131 4,292 5,065

Science

��������������������������������������������������������������������������������������� 4,773 4,895 5,121
Environmental Management

������������������������������������������������������� 5,992 6,008 6,000
Radioactive Waste Management

������������������������������������������������ 288 197

— Corporate Management

�������������������������������������������������������������� 207 220 212
Power Marketing Administration

������������������������������������������������� 234 99 95
Offsetting receipts

����������������������������������������������������������������������� –23 –27 –230
Total, Discretionary budget authority

� ������������������������������������������������ 26,037 26,406 28,354

Memorandum:
Budget authority from American Recovery and Reinvestment Act

��� 36,729

— — Budget authority from supplementals

����������������������������������������������� 7,867

— —

Total, Discretionary outlays

��������������������������������������������������������������� 25,154 29,667 31,609

Memorandum: Outlays from American Recovery and Reinvestment Act

�� 954 10,703 14,646

Mandatory Outlays:
Existing law

��������������������������������������������������������������������������������� –1,206 –752 –474
Legislative proposal, Ultradeep Water, Oil, and Gas Research

and Development

�������������������������������������������������������������������� — — 30
Total, Mandatory outlays

������������������������������������������������������������������� –1,206 –752 –444

Memorandum: Outlays from American Recovery and Reinvestment Act

�� 33 109 131

Total, Outlays

������������������������������������������������������������������������������������ 23,948 28,915 31,165

### 72 DEPARTMENT OF ENERGY



### Department of Energy

— Continued (In millions of dollars)

**Actual**
**2009 Estimate** 

**2010 2011** 

**Credit activity**

Direct Loan Disbursements:
Title 17 Innovative Technology Direct Loan Financing Account

����� 21 7,284 18,114
Advanced Technology Vehicles Manufacturing Direct Loan

Financing Account

�������������������������������������������������������������������� 886 5,304 11,352

Total, Direct loan disbursements

������������������������������������������������������� 907 12,588 29,466

Guaranteed Loan Commitments: Title 17 Innovative Technology Loan Guarantee Program 1

��������� — 3,054 9,016
Total, Guaranteed loan commitments

����������������������������������������������� — 3,054 9,016

1 Commitments reflect the full face value of debt obligations, any part of which is guaranteed, supported by Title 17

. These figures represent loan guar antee obligations of the Government at closing, and do not include “conditional commitments,” which are legally contingent on the satisfaction of various conditions precedent

.

### 73 **Funding Highlights:**

• Supports health insurance reform by expanding patient-centered health research to give patients and physicians the best available information on what treatments will work the best for them; supporting investments in health information technology; expanding prevention and wellness activities; and launching payment reform demonstration programs in Medicare.

• Adds $290 million for health centers to expand health care access to the medically

underserved.

• Expands support for biomedical research, by providing an increase of $1 billion for the

National Institutes of Health.

• Invests approximately $1.4 billion to strengthen food safety efforts and implement core principles of the President’s Food Safety Working Group.

• Supports over 8,500 health care professionals in medically underserved areas through the National Health Service Corps.

• Continues a commitment to invest in the Indian health system to eliminate health disparities by increasing access to health care services among American Indians and Alaska Natives.

• Invests in our Nation’s prevention and wellness activities to improve health outcomes and lower costs, through the Federal workforce, community-based and State and local efforts.

• Invests more than $3 billion for HIV/AIDS prevention and treatment activities to expand access to affordable health care and prevention services.

• Includes $25.5 billion for a six-month extension of the American Recovery and Reinvestment Act (AARA) temporary increase in the Federal Medicaid match.

• Improves preparedness by increasing funding for biodefense medical countermeasure development.

• Places a renewed emphasis on preventing, detecting, and recouping fraudulent, wasteful, and abusive payments in Medicare, Medicaid, and the Children’s Health Insurance Program.

• Expands and strengthens early education and child care programs by extending the ARRA expansion of Head Start and Early Head Start, providing an increase of $1.6 billion for
child care to serve 235,000 more children than could be served without the additional funds in 2011, and supporting work with the Congress to improve quality in the Child Care and Development Fund.

• Increases help for families caring for aging relatives at home. 

# DEPARTMENT OF HEALTH AND HUMAN SERVICES

### 74 DEPARTMENT OF HEALTH AND HUMAN SERVICES

The Department of Health and Human Servic

es (HHS) is the principal Federal agency charged with protecting the health of all Americans and providing essential human services. This Budget includes $81.3 billion to support HHS’s mission.

Builds on Health Information Technology (IT) Adoption Momentum. The Administra

tion continues to prioritize adoption and use of health IT. The Budget includes $110 million for continuing efforts to strengthen health IT policy, coordination, and research activities. Combined with the ARRA Federal grant and incentives pro

grams designed to assist providers with adoption and meaningful use of electronic health records, these efforts will positively affect and improve the quality of health care while protecting pri

vacy and security of personal health information.

Increases Investment in Patient-Centered

Health Research. The Budget includes $286 million in the Agency for Healthcare Research and Quality for research that compares the ef

fectiveness of different medical options, building on the expansion of this research begun under

ARRA. The dissemination of this research is ex

pected to lead to higher quality, evidence-based medicine, arming patients and physicians with

the best available information to allow them to choose the medical option that will work the best

for them.

Expands Affordable High-Quality Pri

mary and Preventive Care. The Budget in

cludes $2.5 billion for health centers to provide affordable high quality primary and preventive care to underserved populations, including the

uninsured. This will allow health centers to con

tinue to provide care to the 2 million additional patients they served under ARRA and support approximately 25 new health center sites. In 2008, health centers provided direct health care services to 17 million people. In 2011, the Health Center program will expand its partnerships with other Federal agencies as part of the Administra

tion’s place-based initiative to revitalize neigh

borhoods. The Budget also includes funding to expand the integration of behavioral health into existing primary health care systems, enhancing the availability and quality of addiction care.

Funds Innovative Efforts to Improve Ser

vices for Seniors and People with Disabili

ties. The Budget includes new Medicare and Medicaid demonstration projects that evaluate reforms to provide higher quality care at lower costs, improve beneficiary education and under

standing of benefits offered, and better align pro

vider payments with costs and outcomes. Special emphasis will be placed on demonstrations that improve care coordination for beneficiaries with chronic conditions, that better integrate Medicare and Medicaid benefits, and that provide higher value for dollars spent. The Budget will also sup

port the Year of Community Living Initiative to promote collaboration between HHS and the De

partment of Housing and Urban Development to expand access to housing and community sup

ports to enable people with disabilities to live in the community, as opposed to in institutional settings.

Supports Biomedical Research at the National Institutes of Health (NIH). To accelerate progress in biomedical research, NIH investments will focus on priority areas includ

ing genomics, translational research, science to support health care reform, global health, and reinvigorating the biomedical research commu

nity. The Budget includes $6,036 million to sup

port a range of bold and innovative cancer efforts, including the initiation of 30 new drug trials in 2011, and a doubling of the number of novel com

pounds in Phase 1–3 clinical trials by 2016. In addition, the Budget will support the completion of a comprehensive catalog of cancer mutations for the 20 most common malignancies, setting the stage for complete genomic characterization of every cancer as part of medical care within 10

years.

Supports Americans with Autism Spec

trum Disorders (ASD). The Budget includes $222 million across HHS to expand research, de

tection, treatment, and other activities related to improving the lives of individuals and families af

fected by ASD. NIH will pursue comprehensiveTHE BUDGET FOR FISCAL YEAR 2011 

### 75

and innovative approac hes to defining the genetic and environmental factors that contribute to ASD, investigate epigenomic changes in the brain, and accelerate clinical trials of novel pharmacological and behavioral interventions by 2016.

Improves Access to and the Quality of

Health Care in Rural Areas. The Budget in

cludes $79 million for an initiative to strength

en regional and local partnerships among rural health care providers, increase the number of health care providers in rural areas, and improve the performance and financial stability of rural hospitals.

Increases Number of Primary Health Care

Providers. The Budget invests $169 million in the National Health Service Corps (NHSC) to place providers in medically underserved areas to improve access to needed health care servic

es. Under NHSC, primary health professionals such as physicians, nurse practitioners, and den

tists agree to serve in a medically underserved community in exchange for receiving a portion of their student loans paid off. In 2011, the request

ed increase will add 400 NHSC clinicians to the more than 8,100 that will be providing essential primary and preventative care services in health care facilities across the country.

Continues Efforts to Increase Access to

Health Care for American Indians and Alas

ka Natives (AI/ANs). The Budget includes $4.4
billion for the Indian Health Service (IHS) to ex

pand investments initiated in 2010. Increases for IHS will strengthen existing Federal, tribal, and urban programs that serve 1.9 million AI/ ANs at approximately 600 facilities nationwide, and will expand access to Contract Health Ser

vices to cover health care services provided out

side of the Indian health system when services

are not available at IHS-funded facilities. The Budget will also fund staff and operating costs at new and expanded facilities to increase access

to health care services and enhance the Indian health system. The efforts supported in the Bud

get to expand health services in Indian commu

nities also include an analysis of how IHS can improve distribution of resources throughout the Indian health system.

Expands and Strengthens Prevention and

Wellness Activities. The Budget bolsters core prevention activities by expanding community health activities, strengthening the public health workforce, and enhancing surveillance and health statistics to improve detection and moni

toring of chronic disease and health outcomes. The Budget funds a new effort in up to 10 of the largest cities in the United States to reduce the rates of morbidity and disability due to chronic disease through effective policy and environmen

tal change strategies. The Budget also supports a new health prevention workforce to improve ca

pacity of State and local health departments.

Invests in Wellness Initiatives for the Federal Workplace to Improve Health and

Lower Costs. The Budget invests $10 million for the Federal employee workplace wellness ini

tiative. This initiative will implement prototype wellness programs in select locations that will be rigorously evaluated for their ability to produce a

healthier workforce and lower healthcare costs. By encouraging the adoption of these programs, we can improve the productivity of our work

force, delay or avoid many of the complications of chronic disease, and slow medical cost growth.

Expands and Focuses HIV/AIDS Treat

ment, Care, and Prevention Activities. The Budget expands access to HIV/AIDS preven

tion and treatment activities consistent with the President’s pledge to develop a National HIV/ AIDS Strategy that will focus on reducing HIV incidence, increasing access to care and optimiz

ing health outcomes, and reducing HIV-related health disparities. The Budget focuses HIV test

ing among high-risk groups, including men who have sex with men, African Americans, and His

panics. The Budget increases resources for the Ryan White program to support the care and treatment needs for persons living with HIV/

AIDS who are unable to afford health care and related support services. The Budget directs re

sources to reduce HIV-related health disparities by expanding HIV/AIDS medical services within

### 76 DEPARTMENT OF HEALTH AND HUMAN SERVICES

populations disproportionately impacted by the epidemic. The Budget also enhances funding for collaboration and integration activities to improve overall health outcomes for those with HIV/AIDS and co-infections with tuberculosis, hepatitis, and sexually transmitted diseases.

Expands Substance Abuse Prevention

and Treatment Activities. The Budget ex

pands substance abuse treatment services at IHS facilities and federally qualified health centers, and provides $23 million for comprehensive sub

stance abuse prevention services targeting early risk factors that can improve health outcomes for children and young adults. To assist in recovery to reduce recidivism, the Budget provides $56 million to expand the treatment capacity at drug courts and $23 million for re-entry programs. These activities are a part of over $150 million in new funding for the Departments of Health and Human Services and Justice (DOJ) to reduce the Nation’s demand for drugs by strengthen

ing efforts to detect and prevent illicit drug use in our communities, expanding early drug abuse intervention in the primary health care system, enhancing specialty addiction treatment services, and breaking the cycle of illicit drug use, crime,

and incarceration.

Bolsters the Safety of our Food and Medi

cines. The Budget provides $2.5 billion in bud

get authority and $4.0 billion in total program resources for the Food and Drug Administration (FDA). The Budget enables FDA to implement the core principles recommended by the Presi

dent’s Food Safety Working Group: prioritizing prevention; strengthening surveillance and en

forcement; and improving response and recovery. The Budget also includes increases to bring more safe, effective, and lower cost generic drugs and generic biologics to market, expand postmarket safety surveillance of medical products, and sup

port FDA’s efforts to make such safety data more comprehensive and accessible to patients, pro

viders, and scientists in a way that also protects privacy. Strengthens the Nation’s Preparedness Against Naturally Occurring Threats and

Intentional Attacks. The Budget increases support to over $400 million to enhance the Ad

vanced Development of next generation medical countermeasures against chemical, biological, ra

diological and nuclear threats. The Department has invested $5.6 billion since 2005 to enhance the Nation’s ability to rapidly respond to an in

fluenza pandemic. In April 2009, the President requested resources from the Congress to enable additional efforts to respond to the 2009 H1N1 virus that had recently emerged and in June, the Congress provided $7.65 billion in the Supple

mental Appropriations Act 2009. By the end of 2009, more than $3.6 billion had been spent as the Federal Government procured H1N1 vac

cines, mounted a mass vaccination campaign, provided resources to the States to enhance pub

lic health response efforts, and provided critical anti-viral medications and personal protective equipment. In 2010, HHS will continue to use

these resources to build the U.S.-based influenza vaccine production capacity and shift to non-egg based production technologies and invest in the development of improved diagnostics. Approxi

mately $330 million of these resources is expect

ed to be spent in 2011. These ongoing activities to reduce the impact of influenza pandemics will be funded from resources in the 2009 Supplemental for pandemic influenza.

Fights Waste and Abuse in Medicare, Med

icaid, and the Children’s Health Insurance Program (CHIP). Reducing fraud, waste, and abuse is an important part of restraining spend

ing growth and providing quality service delivery to beneficiaries. In November 2009, the President signed an Executive Order to reduce improper payments by boosting transparency, holding agencies accountable, and creating incentives for compliance. This Budget puts forward a robust set of proposals to strengthen Medicare, Medicaid and CHIP program integrity actions, including proposals aimed at preventing fraud and abuse before they occur, detecting it as early as possible when it does occur, and vigorously enforcing all penalties and recourses available when fraud is identified. It proposes $250 million in addition

-THE BUDGET FOR FISCAL YEAR 2011 

### 77

al resources that, among other things, will help expand the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, a joint effort by HHS and DOJ. As a result, the Ad

ministration will be better able to minimize inap

propriate payments, close loopholes, and provide greater value for program expenditures to ben

eficiaries and taxpayers. Also, to improve quality and safety, the Administration will strengthen its Medicare requirements to assure that air am

bulance operators comply with aviation safety

standards.

Supports Young Children and Their Fami

lies. The Budget provides critical support for young children and their families by building on historic increases provided in ARRA. The Bud

get provides an additional $989 million for Head Start and Early Head Start to continue to serve 64,000 additional children and families funded in ARRA. The Budget also provides an addi

tional $1.6 billion for the Child Care and Devel

opment Fund in preparation for reauthorization to expand child care opportunities, and improve health, safety, and outcomes for children. This re

quest will allow States to provide child care sub

sidies to 1.6 million children, 235,000 more than

could be served without the increase.

Helps Families Care for Aging Relatives

. The Budget includes $103 million for the Admin

istration on Aging’s Caregiver Initiative, an effort to expand help to families and seniors so that caregivers can better manage their multiple re

sponsibilities and seniors can live in the commu

nity for as long as possible. Without creating new programs, this initiative provides new resources to support the network of agencies in local com

munities across the country that already provide critical help to seniors and caregivers.

Provides Energy Assistance to Low-In

come Families. The Budget includes $3.3 bil

lion for the Low Income Home Energy Assistance Program to help low-income families with their home heating and cooling expenses. In addition, the Administration proposes a new trigger mech

anism to provide automatic increases in energy assistance whenever there is a spike in energy costs or large numbers of families in poverty. The trigger allows the program to be more responsive to volatile energy markets and to increased de

mand for energy assistance during times of eco

nomic hardship. Using probabilistic scoring, we expect the trigger to provide roughly $2 billion in additional assistance in 2011 and $6.5 billion
over 10 years.

Help States Provide Health Care Cover

age to Low-Income Individuals. The Budget includes $25.5 billion to support State Medic

aid programs by temporarily increasing Federal Medicaid funding for six months through June

2011. The Federal Medical Assistance Percent

age (FMAP) increase has been an effective way to help States maintain their Medicaid programs during a period of high enrollment growth and re

duced State revenue, and provide immediate and ongoing State fiscal relief.



### Department of Health and Human Services (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending
Discretionary Budget Authority:
Food and Drug Administration 1

���������������������������������������������������������������� 2,061 2,362 2,508
Program Level (non-add)

  2,691 3,284 4,031

Health Resources and Services Administration

���������������������������������������� 7,243 7,484 7,512

Indian Health Service

�������������������������������������������������������������������������������� 3,581 4,053 4,406

### 78 DEPARTMENT OF HEALTH AND HUMAN SERVICES



### Department of Health and Human Services

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Centers for Disease Control and Prevention

��������������������������������������������� 6,357 6,467 6,342

National Institutes of Health

���������������������������������������������������������������������� 30,096 31,089 32,089

Substance Abuse and Mental Health Services Administration

����������������� 3,335 3,432 3,541
Agency for Healthcare Research and Quality

������������������������������������������� — — — Program Level (non-add)

  372 397 611
Centers for Medicare & Medicaid Services (CMS) 2

�������������������������������� 3,522 3,415 3,601
Discretionary Health Care Fraud and Abuse Control

�������������������������������� 198 311 561

Administration for Children and Families

� �������������������������������������������������� 17,225 17,336 17,480
Administration on Aging

���������������������������������������������������������������������������� 1,488 1,513 1,625
General Departmental Management

�������������������������������������������������������� 395 500 544
Office of Civil Rights

���������������������������������������������������������������������������������� 40 41 44
Office of the National Coordinator for Health Information Technology

������� 44 42 78
Program Level (non-add)

  61 61 78
Office of Medicare Hearings and Appeals

������������������������������������������������ 65 71 78
Public Health and Social Services Emergency Fund

�������������������������������� 1,399 1,347 735
Office of Inspector General

����������������������������������������������������������������������� 45 50 52

All other

����������������������������������������������������������������������������������������������������� 58 61 61
Subtotal, Discretionary budget authority

���������������������������������������������������������� 77,152 79,574 81,257
Unallocated Bioshield Balances Transferred from Department of

Homeland Security 3

������������������������������������������������������������������������������� — 2,424

— Total, Discretionary budget authority

� �������������������������������������������������������������� 77,152 81,998 81,257

Memorandum:
Budget authority from American Recovery and Reinvestment Act 22,397 — — Budget authority from supplementals 9,119 — —

Total, Discretionary outlays 2

��������������������������������������������������������������������������� 74,921 82,266 82,803

Memorandum: Outlays from American Recovery and Reinvestment Act 682 8,437 10,100

Mandatory Outlays:

Medicare
Existing law 4

���������������������������������������������������������������������������������������� 424,828 450,664 489,305
Legislative proposal

����������������������������������������������������������������������������� — — -722

Medicaid 5
Existing law

������������������������������������������������������������������������������������������ 226,885 245,118 264,498
Legislative proposal

����������������������������������������������������������������������������� — 15 25,280

All other
Existing law

������������������������������������������������������������������������������������������ 34,503 34,872 35,915
Legislative proposal

����������������������������������������������������������������������������� — — 3,774
Total, Mandatory outlays

��������������������������������������������������������������������������������� 686,216 730,669 818,050THE BUDGET FOR FISCAL YEAR 2011 

### 79

Department of Health and Human Services

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Memorandum: Outlays from American Recovery and Reinvestment Act 32,673 45,674 21,520

Total, Outlays

�������������������������������������������������������������������������������������������������� 761,137 812,935 900,853

1 FDA 2009 budget authority increased by $6 million due to timing and availability of user fees

.

2 Amounts appropriated to the Social Security Administration (SSA) from the Hospital Insurance and Supplementary Medical Insurance accounts are included in the corresponding table in the SSA chapter

.

3 In 2010, $3,033 million from the Bioshield Special Reserve Fund (SRF) was transferred from the Department of Homeland Security to the Department of

Health and Human Services

. Of this amount, $609 million was redirected to suppor t Advanced Development and NIH, and $2,424 million remains as

balances in the SRF

. In 2011, $476 million from the SRF will be used to support the Biomedical Adv anced Research and Development Authority

.

4 Includes $44 million in 2009, $36 million in 2010, and $3 million in 2011 of CMS Program Management mandatory funding

. Social Security Medicare Improvements for Patients and Providers Act (MIPPA) funding is included in the corresponding table of the SSA chapter

.

5 Totals include Medicaid, CHIP, and CHIP Child Enrollment Contingency Fund outlays

.

### 81 The Department of Homeland Security (DHS) is the principal Federal agency charged with

such vital missions as aviation and border se

curity, preparedness and emergency response, maritime safety and security, and protecting our Nation’s leaders. The Budget includes $44 billion to support these missions.

Safeguards Our Nation’s Transportation Systems. The Budget provides $734 million to support the deployment of up to 1,000 new Advanced Imaging Technology (AIT) screening machines at airport checkpoints and new explo

sive detection equipment for baggage screening in 2011. AIT machines allow security officers to detect both metallic and non-metallic anomalies, such as weapons and explosives on persons enter

ing an airport’s sterile area. Additional funding

is also included for the Federal Air Marshal Ser

vice (FAMS). This funding will allow the FAMS to increase the number of international flights covered by FAMS to defend against attempted attacks on aviation. The Budget provides $54

million for the continued modernization and streamlining of transportation security vetting and credentialing, which will reduce duplicative Transportation Security Administration process

es and systems. This modernization will elimi

nate redundancies for those applying for mul

tiple credentials as all vetting will be performed centrally, allowing for multiple credentials to be issued with a single vetting process. **Funding Highlights:**

• Supports aviation security by deploying up to 1,000 Advanced Imaging Technology screening machines that can identify anomalies such as firearms and explosives on passengers, and by increasing the number of international flights on which Federal Air Marshals are present.

• Protects against threats to the homeland by procuring and deploying next-generation BioWatch sensors nationwide and supporting the Comprehensive National Cybersecurity

Initiative.

• Strengthens border security and immigration enforcement by supporting 20,000 Border Patrol agents, adding 300 new officers at ports of entry, completing the first segment of the virtual border fence, and by enhancing and expanding immigration verification systems.

• Supports State homeland security activities through funding provided to States and localities to protect Americans from terrorist attacks and natural disasters. Specifically, provides $4 billion in State and local programs funding for risk-informed grants and additional assistance to our Nation’s first responders as well as $1.95 billion for disaster assistance.

• Continues recapitalization of key Coast Guard assets, including $538 million to construct the fifth National Security Cutter and $240 million to construct four more Fast Response Cutters. 

# DEPARTMENT OF HOMELAND SECURITY

### 82 DEPARTMENT OF HOMELAND SECURITY

Prevents Biological, Radiological, and

Nuclear Attacks. The Budget funds activities to prevent attacks to our Nation. Procurement and nationwide deployment of next-generation BioWatch sensors is funded at $89 million. These

sensors will detect bio-attacks at the earliest possible instant. As part of the ongoing effort to protect against radiological or nuclear threats, the Budget funds $61 million for radiation de

tection equipment to enhance the Department of Homeland Security’s detection capabilities at sea ports, land border crossings, and airports.

Strengthens Border Security and Immi

gration Verification Programs. The Bud

get includes funding to support 20,000 Border Patrol agents and complete the first segment of Customs and Border Protection’s (CBP’s) virtual border fence. The Budget also includes funding for 300 new CBP officers for passenger and cargo screening at ports of entry, as well as expansion of pre-screening operations at foreign airports and land ports of entry. The Budget provides more than $1.6 billion for Immigration and Customs Enforcement programs to expeditiously identify and remove from the United States illegal aliens

who commit crimes. Included in this total is continued support for the Secure Communities

program.

To enhance and expand immigration related verification programs, the Budget provides $137 million to the U.S. Citizenship and Immigra

tion Services. Through E-Verify, U.S. employers can maintain a legal workforce by verifying the employment eligibility of their workers, while Systematic Alien Verification for Entitlements (SAVE) assists Federal, State, and local bene

fit-granting agencies with determining eligibil

ity for benefits by verifying immigration sta

tus. These programs promote compliance with immigration laws and prevent individuals from obtaining benefits for which they are not eligible.

Protects Critical Information Networks. Data networks are central to the functioning of our economy and Nation. The Budget provides $364 million to support the operations of the National Cyber Security Division, which protects Federal systems as well as continuing efforts un

der the Comprehensive National Cybersecurity Initiative to protect our information networks from the threat of attacks or disruptions.

Promotes Citizenship and Integration. The Budget increases support for integration of new immigrants with $18 million identified to promote citizenship through education and preparation programs, replication of promising practices in integration for use by communities across the Nation, and expansion of innovative English learning tools.

Invests Significantly in Upgrading the

Coast Guard Fleet. The Budget funds $538

million to construct the fifth Coast Guard National Security Cutter and $240 million to produce four new Fast Response Cutters. Fund

ing of $45 million enables Coast Guard to move ahead with selection of a design for the Offshore Patrol Cutter. These new assets replace an aging fleet of cutters and patrol boats and pro

vide stronger command and control platforms

for more effective and efficient execution of all

Coast Guard missions.

Supports First Responders, National Preparedness, and Re sponse Capabilities. The Budget funds $4 billion in State and lo

cal programs, including Firefighter Assistance Grants, for equipping, training, exercising, and hiring first responders. Of this amount, fund

ing of $1.1 billion for the Urban Area Security Initiative will direct resources to the metropoli

tan vicinities with the highest threat—based on a risk management methodology. Funding of $600 million provides essential support to the transportation sector through the Transit and Port Security Grant Programs. The Budget also supports disaster response and resilience efforts by funding the Disaster Relief Fund (DRF) at $1.95 billion. The DRF is used in the instance of a presidentially-declared disaster or emergency by the Federal Emergency Management Agen

cy to assist State and local governments in theTHE BUDGET FOR FISCAL YEAR 2011 

### 83

response, recovery, and mitigation against emer

gency and disaster events.

Cuts Waste and Improves Performance by Integrating and Unifying the Department. The Budget funds a number of activities to im

prove ongoing operations at DHS, including $288

million for the consolidation of DHS into one major complex in the National Capital Region. Funding is also provided to enhance the capabili

ty and capacity of the DHS acquisition workforce.



### Department of Homeland Security (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending
Discretionary Budget Authority: Departmental Management and Operations

�������������������������������������������� 963 1,131 1,618
Office of the Inspector General

���������������������������������������������������������������� 123 130 130

U

. S

. Citizenship and Immigration Services

���������������������������������������������� 149 224 382

United States Secret Service

������������������������������������������������������������������� 1,412 1,483 1,572
Transportation Security Administration

���������������������������������������������������� 4,741 5,126 5,724
Federal Law Enforcement Training Center

����������������������������������������������� 333 282 278
Immigration and Customs Enforcement

��������������������������������������������������� 4,992 5,437 5,524

Customs and Border Protection

��������������������������������������������������������������� 9,686 10,134 9,817

U

. S

. Coast Guard

������������������������������������������������������������������������������������� 8,112 8,595 8,466
National Protection and Programs Directorate

���������������������������������������� 3,108 –1,584 1,460
Federal Emergency Management Agency

����������������������������������������������� 7,001 7,108 7,294
Science and Technology

�������������������������������������������������������������������������� 933 1,000 1,018

Domestic Nuclear Detection Office

���������������������������������������������������������� 514 376 306
Total, Gross

����������������������������������������������������������������������������������������������������� 44,591 41,732 45,922

Less fee-funded activities

������������������������������������������������������������������������ 2,526 2,290 2,333
Total, Discretionary budget authority (net)

������������������������������������������������������ 42,065 39,442 43,589
Bioshield (non-add)

���������������������������������������������������������������������������������� 1,763 –3,033 —

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������������� 2,755 — — Budget authority from supplementals

������������������������������������������������������������� 500 3,842 254

Total, Discretionary outlays

����������������������������������������������������������������������������� 48,967 51,404 53,248

Memorandum: Outlays from American Recovery and Reinvestment Act

������� 107 1,313 1,077

Mandatory Outlays:

U

. S

. Citizenship and Immigration Services

���������������������������������������������� 2,390 2,314 2,568
Federal Emergency Management Agency

����������������������������������������������� 2,116 –158 –9

### 84 DEPARTMENT OF HOMELAND SECURITY



### Department of Homeland Security—Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Customs and Border Protection
Existing law

����������������������������������������������������������������������������������������� 1,055 1,327 1,373
Legislative proposal

���������������������������������������������������������������������������� — — 5

U

. S

. Coast Guard

������������������������������������������������������������������������������������� 1,512 1,500 1,604
Transportation Security Administration

���������������������������������������������������� 290 369 407

All other

���������������������������������������������������������������������������������������������������� –4,694 –5,154 –5,538
Total, Mandatory outlays

��������������������������������������������������������������������������������� 2,669 198 410

Total, Outlays

�������������������������������������������������������������������������������������������������� 51,636 51,602 53,658

Credit activity

Direct Loan Disbursements:

Disaster Assistance

��������������������������������������������������������������������������������� 89 160 160

Total, Direct loan disbursements

��������������������������������������������������������������������� 89 160 160

### 85 The Department of Housing and Urban Development (HUD) is committed to fulfilling its mission of supporting home ownership, increasing access to affordable housing free from discrimination, and supporting innovative and sustainable community development. The President’s Budget provides $48.5 billion in program funding to support HUD’s core programs and new initiatives to achieve these important goals while protecting taxpayer dollars and reducing costs through stronger risk management and reform of inefficient programs. This funding will be offset by estimated collections of $6.9 billion from responsible credit premiums charged for HUD mortgage insurance

and other credit enhancements. **Funding Highlights:**

• Provides $4.4 billion for the Community Development Fund, including full funding of Community Development Block Grant formula funds and $150 million for Catalytic Investment Competition Grants to implement economic development activities in targeted distressed

communities.

• Provides a $2.1 billion increase over the 2010 Budget for rental assistance to extremely low- and low-income families through Housing Choice Vouchers and Project-Based Rental Assistance. Rental assistance helps prevent homelessness and other hardships.

• Begins a new multi-year initiative to combine the Department’s multiple rental assistance programs into a single funding stream and encourage entities that administer Housing Choice Vouchers to operate on a regional basis. This initiative will more effectively preserve the public housing stock, provide assisted families greater housing mobility, and streamline Department operations.

• Strengthens communities and regions through place-based initiatives. The 2011 Budget requests an additional $250 million for Choice Neighborhoods; and includes $150 million for the Department’s role in developing and supporting the Sustainable Communities initiative in partnership with the Department of Transportation and the Environmental Protection Agency.

• Provides an unprecedented $2.1 billion for the Department’s Homeless Assistance Grants Program to implement the Homeless Emergency Assistance Rapid Transition to Housing (HEARTH) Act; the budget for homeless programs reflects the Administration’s commitment and goal to make visible, sustained progress toward ending homelessness.

• Reforms Federal Housing Administration (FHA) mortgage insurance, increases funding for FHA information technology and risk management, and provides additional funds for combating mortgage fraud. 

# DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT

### 86 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Fully Funds the Community Development Block Grant Program. The Budget provides $4.4 billion for the Community Development Fund, including $3.99 billion for the Commu

nity Development Block Grant (CDBG) formula program, and $150 million for the creation of a Catalytic Investment Competition Grants pro

gram. The new Catalytic Competition Grants program uses the authorities of CDBG, but will provide capital to bring innovative economic de

velopment projects to scale to make a measurable impact. The competitive grants will fund appli

cants with targeted economic investments while leveraging other federal neighborhood revital

ization programs, including mainstream CDBG funding. Unlike CDBG, consortia including high capacity non-governmental entities that have de

veloped an innovative plan may apply, along with governmental entities, and the grants will target areas experiencing significant economic distress. The program will create a well-targeted funding stream that is responsive to changes in market

conditions and that enhances the economic com

petitiveness of distressed communities.

Increases Funding for the Housing Choice Voucher Program. The President’s Budget requests $19.6 billion for the Housing Choice Voucher program to help more than two million extremely low- to low-income families with rental assistance to live in decent housing in neighbor

hoods of their choice. The Budget continues fund

ing for all existing mainstream vouchers and pro

vides flexibility to support new vouchers leased in 2009 and 2010 and $85 million in special purpose vouchers for homeless families with children, families at risk of homelessness, and persons

with disabilities. The Administration remains committed to working with the Congress to focus the goals and objectives of the program, as well as address the program’s costly inefficiencies, and to fully utilize available funding by alleviating the administrative burdens on the Public Housing Authorities that implement HUD voucher and other programs, and establish a funding mecha

nism that is transparent and predictable in order to serve more needy families

.

Preserves 1.3 Million Affordable Rental Units through Project-Based Rental Assis

tance Program

. The President’s Budget pro

vides $9.4 billion for the Project-Based Rental As

sistance program to preserve approximately 1.3 million affordable rental units through increased funding for contracts with private owners of mul

tifamily properties. This critical investment will help extremely low- to low-income households to obtain or retain decent, safe and sanitary housing.

Launches the Conversion of Public Housing to Project-based Vouchers Through the Transforming Rental Assistance Initia

tive. The Administration requests $350 million to fund the first phase of this multi-year initia

tive to regionalize the Housing Choice Voucherprogram and convert Public Housing to projectbased vouchers. The primary goals of this initia

tive are to improve the physical condition and management of the public housing stock, increase the mobility of assisted families, and streamline HUD oversight of its rental assistance programs.

Combats Mortgage Fraud. The Budget pro

vides $20 million for HUD to combat mortgage fraud and predatory lending practices. These

resources will allow HUD to increase enforce

ment of mortgage and home purchase settlement requirements.

Provides Funding for Choice Neighbor

hoods

. By providing $250 million in 2011, the Budget continues HUD’s effort to make a range of transformative investments in high-poverty neighborhoods where public and assisted housing

is concentrated. A central element of the Admin

istration’s place-based agenda, this initiative will invest in public, private and nonprofit partners that have transformative neighborhood interven

tions and provide the greatest returns on Federal

investment.

Implements the Homeless Emergency Assistance Rapid Transition to Housing (HEARTH) Act. The President’s Budget provides $2.1 billion for HUD’s Homeless Assistance Programs to effectively implement the HEARTH Act. Enacted in May 2009 to fundamentally transform the Federal response to homelessness,

HEARTH streamlined three current homeless programs into one, placed greater emphasis on homelessness prevention, and provided increased funds for renewal costs and permanent housingTHE BUDGET FOR FISCAL YEAR 2011 

### 87

beds. The Budget will support the key priorities reflected in HEARTH, including $200 million for Emergency Solutions Grant, funding for about 10,000 new permanent housing beds, and a com

petitive rural program. HUD is also working in partnership with the Department of Veteran Affairs to substantially lower the number of

homeless veterans.

Helps Communities Become More

Sustainable and Livable. As part of the Presi

dent’s Partnership for Sustainable Communities, the Budget includes $150 million to help stimulate comprehensive regional and community planning efforts that integrate transportation and housing investments that result in more regional and local sustainable development patterns, reduce green

house gases, and increase more transit accessible housing choices for residents. HUD’s Sustainable Communities Initiative also expands and better

coordinates Federal efforts to create incentives for State and local governments to plan for and implement pre-disaster mitigation strategies. Coordinating hazard mitigation efforts with re

lated sustainability goals and activities will re

duce risks while protecting life, property, and the environment. Combined with the Department of Transportation’s funding for strengthening the capacity of States and local governments to make

smarter infrastructure investments and the En

vironmental Protection Agency’s technical assis

tance, this interagency Partnership, which is one of the pillars of the Administration’s place-based agenda, aims to lower the cost of living while im

proving the quality of life in local communities.

It will do so by providing more coordinated hous

ing and transportation options, improving envi

ronmental quality, and better leveraging Federal

investments. Enhances FHA’s Risk Management and Housing Counseling

. The Budget provides an additional $18 million for FHA to enhance its monitoring and management of its insurance portfolio’s financial risk. In addition, the Budget includes programmatic changes to single-fam

ily mortgages insured by FHA. These changes, which include raising the minimum credit score for high-risk borrowers and restructuring of in

surance premiums, will reduce risk and replenish FHA’s capital reserves while allowing it to meet its mission of providing sound access to home financing for underserved populations. In addi

tion, the Budget proposes $338 million for hous

ing counseling, including a greater than 7 percent increase for the Neighborhood Reinvestment Cor

poration (NeighborWorks), which will fund vital foreclosure counseling services in communities

across the Nation.

Expands Funding for High-Priority Research and Program Evaluations. The Budget provides increased funding for housing re

search, fully funds the American Housing Survey, and funds three new impact evaluations as part

of the Government-wide evaluation initiative—a Family Self-Sufficiency Demonstration, Rent Re

form Demonstration, and Choice Neighborhoods

Demonstration. This increased investment in re

search will allow HUD to determine whether pro

grams are achieving their intended outcomes and provide new evidence on how to efficiently and ef

fectively provide rental assistance. The Budget also includes $25 million to support research and development (R&D) tied to the President’s na

tional goals of energy, health and sustainability. Partnering with other agencies, HUD will invest in R&D focused on the linkages between the built environment and health, hazard risk reduction and resilience, and the development of innovative building technologies and building processes.

### 88 DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT



### Department of Housing and Urban Development (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority: Community Development Fund

����������������������������������������������������������������� 3,900 4,450 4,380
Catalytic Investment Grants (non-add)

������������������������������������������������� — — 150
Sustainable Communities (non-add)

���������������������������������������������������� — 150 150
HOME Investment Partnerships Program

������������������������������������������������� 1,825 1,825 1,650

Homeless Assistance Grants

�������������������������������������������������������������������� 1,677 1,865 2,055
Housing Opportunities for Persons with AIDS

������������������������������������������ 310 335 340

Tenant-based Rental Assistance

�������������������������������������������������������������� 16,225 18,184 19,551
Project-based Rental Assistance

�������������������������������������������������������������� 7,100 8,558 9,376
Public Housing Operating Fund

���������������������������������������������������������������� 4,455 4,775 4,829
Public Housing Capital Fund

��������������������������������������������������������������������� 2,450 2,500 2,044
Transforming Rental Assistance

��������������������������������������������������������������� — — 350
Choice Neighborhoods/HOPE VI

�������������������������������������������������������������� 120 200 250
Native American Housing Block Grant

������������������������������������������������������ 645 700 580
Housing for the Elderly

������������������������������������������������������������������������������ 765 825 274
Housing for Persons with Disabilities

�������������������������������������������������������� 250 300 90
Federal Housing Administration (FHA)
Existing Law

����������������������������������������������������������������������������������������� –874 –2,215 –1,628
Legislative proposal

����������������������������������������������������������������������������� –4,099
Government National Mortgage Association (GNMA)

������������������������������� –888 –914 –679
Salaries and Expenses

����������������������������������������������������������������������������� 1,303 1,346 1,379
Policy Development and Research

����������������������������������������������������������� 58 48 87

All other

����������������������������������������������������������������������������������������������������� 722 799 761
Total, Discretionary budget authority

� �������������������������������������������������������������� 40,043 43,581 41,590

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������������� 13,626

— — Budget authority from supplementals

������������������������������������������������������������� 30

— —

Total, Discretionary outlays

����������������������������������������������������������������������������� 44,240 46,208 46,127

M

emorandum: Outlays from American Recovery and Reinvestment Act

........ 1,520 3,628 5,545

Mandatory Outlays:

FHA

����������������������������������������������������������������������������������������������������������� 15,938 12,228 1,016
Community Planning and Development

���������������������������������������������������� 119 1,263 1,128
Housing Trust Fund (non-add)

�������������������������������������������������������������� — — 20

All other

����������������������������������������������������������������������������������������������������� –798 –807 –732
Total, Mandatory outlays

��������������������������������������������������������������������������������� 15,259 12,684 1,412

Total, Outlays

�������������������������������������������������������������������������������������������������� 59,499 58,892 47,539THE BUDGET FOR FISCAL YEAR 2011 

### 89

Department of Housing and Urban Development

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Credit activity

Direct Loan Disbursements:

FHA

����������������������������������������������������������������������������������������������������������� — 50 50

GNMA

������������������������������������������������������������������������������������������������������� 10 27 25
Green Retrofit Program for Multifamily Housing

��������������������������������������� — 143

— Total, Direct loan disbursements

��������������������������������������������������������������������� 10 220 75

Guaranteed Loan Commitments:

FHA

����������������������������������������������������������������������������������������������������������� 355,723 340,080 265,705

GNMA

�������������������������������������������������������������������������������������������������������� 418,938 380,942 283,042

All other

����������������������������������������������������������������������������������������������������� 608 1,126 1,220

Total, Guaranteed loan commitments

������������������������������������������������������������� 775,269 722,148 549,967

### 91 The Department of the Interior (DOI) is com

mitted to fulfilling its mission to protect and manage the Nation’s natural resources and cul

tural heritage; provide scientific and other in

formation about those resources; and honor its trust responsibilities or special commitments to American Indians, Alaska Natives, and affiliated

Island Communities. The President’s 2011 Bud

get provides $12 billion to DOI to achieve these goals, while reforming inefficient programs and generating mandatory savings of about $2.7 billion over 10 years. Invests in a Clean Energy Future. DOI plays a key role in supporting the President’s plan to create a clean energy future that holds the promise of an improved environment, en

hanced energy security, and green jobs in new in

dustries. DOI already manages public lands and offshore resources that provide about one-third of the domestic supply of fossil fuel resources. The Department is now expanding on that role to become a leader in promoting clean, renew

able energy on Federal lands. The 2011 Budget adds $14 million—on top of $50 million in 2010 increases—to build agency capacity to review and permit renewable energy projects on Federal **Funding Highlights:**

• Promotes renewable energy development on Federal lands and waters with the goal of permitting at least 9,000 megawatts of energy capacity on Department of the Interior lands by

the end of 2011.

• Stays on track to fully fund Land and Water Conservation Fund programs by 2014 by providing nearly $620 million to acquire new lands for national parks, forests and refuges, protect endangered species habitat, and promote outdoor recreation.

• Helps Federal land managers address the impact of climate change by expanding the Department’s science capability to develop vital decision support tools.

• Improves the return to taxpayers from U.S. mineral production through royalty reforms and industry fees.

• Strengthens Native American communities with funds to enhance the management capacity of tribal governments and improve coordination between Federal agencies on law

enforcement.

• Prepares responsibly for wildfires with full funding for suppression and a contingency reserve

fund.

• Promotes water conservation and science while balancing competing water resource needs. 

# DEPARTMENT OF THE INTERIOR

### 92 DEPARTMENT OF THE INTERIOR

lands. This includes conducting the environmen

tal evaluations and technical studies needed to spur development of renewable energy projects, assess available alternative resources, and miti

gate the impacts of development. DOI has set a goal to permit at least 9,000 megawatts of new solar, wind, and geothermal electricity genera

tion capacity on DOI-managed lands by the end

of 2011.

Conserves Landscapes and Ecosystems.

The Administration continues its commitment to acquire and conserve landscapes and ecosystems that lack adequate protection with increased funding from the Land and Water Conserva

tion Fund (LWCF). The Budget provides an in

crease of $106 million, or 31 percent, for LWCF programs in DOI that protect Federal lands for wildlife and public enjoyment and provide State grants for park and recreational improvements. Total LWCF funding for the Departments of Agriculture and the Interior is nearly $620 mil

lion, keeping the Administration on track to fully fund LWCF programs at $900 million by 2014. In addition, the Budget proposes to reauthorize and expand DOI’s authority under the Federal Land Transaction Facilitation Act, so that the proceeds

from the sale of low-conservation value lands may be used to acquire additional high-priority

conservation lands.

Establishes Climate Science Centers. Managing ecosystems and wildlife habitat that are facing the impact of climate change requires reliable data on changes, supporting science, and tools to bring these together to inform land man

agement decisions. DOI is establishing a frame

work, which includes Climate Science Centers that will focus on the impact of climate change on a broad array of Departmental resources. The Budget includes an increase of $14 million for these Centers to provide land managers with vital decision support tools based on the latest

science.

Provides a Better Return to Taxpayers from Mineral Development. The public re

ceived about $10 billion in 2009 from fees, royal

ties, and other Federal payments related to oil, gas, coal, and other mineral development. Yet a number of recent studies by the Government Ac

countability Office and DOI’s Inspector General have found that this return could be improved through more rigorous oversight and policy changes, such as charging appropriate fees and reforming how royalties are set. The Budget pro

poses a number of actions to ensure that Federal taxpayers receive a fair return from the develop

ment of U.S. mineral resources:

• Terminating payments to coal-producing States and Tribes that no longer need funds to clean up abandoned coal mines.

• Extending the practice of having States with mineral revenue payments help to defray the Federal costs in managing the mineral leases that generate the revenue.

• Charging user fees to oil companies for processing oil and gas drilling permits and inspecting operations on Federal lands

and waters.

• Establishing fees for new non-producing oil and gas leases (both onshore and off

shore) to encourage more timely produc

tion.

• Making administrative changes to Feder

al oil and gas royalties, such as adjustingroyalty rates and terminating the royaltyin-kind program.

Empowers Tribal Nations. The Adminis

tration supports tribal self-determination and will assist tribal governments in enhancing their management capacity. The Budget provides in

creased funding to better compensate Tribes for the work they perform in managing Federal pro

grams under self-determination contracts and self-governance compacts. In addition, the Bud

get includes proposals to foster better coordina

tion between the Departments of the Interior and

Justice on Indian law enforcement issues.

Prepares Responsibly for Wildfires. The Budget continues the long-standing practice of fully funding the 10-year average cost of wild

land fire suppression operations. To reduce the need for emergency appropriations, the BudgetTHE BUDGET FOR FISCAL YEAR 2011 

### 93

for DOI includes an additional $75 million fund

ing reserve to be used only as a contingency when regular suppression funding is exhausted. The Budget also targets hazardous fuels reduction funding for activities in the wildland-urban in

terface where they are most effective. Priority is given to projects in communities that have met “Firewise” standards, identified acres to be treated, and invested in local solutions to protect against wildland fire.

Invests in Water Resources Infrastructure

and Science. The Budget continues to focus re

sources on the Department’s Water Conservation initiative, which assists local communities in in

creasing water availability by encouraging vol

untary water banks, reuse of treated wastewater, and other market-based conservation measures.

The initiative also includes the Bureau of Rec

lamation’s water reuse and recycling (Title XVI) program and invests an additional $9 million in a multi-year, nationwide study of water availability and use by the U.S. Geological Survey. Moreover, in coordination with other Federal agencies and the State of California, the Department is also participating in activities and dedicating resourc

es to foster continued progress in the restoration of a number of sensitive ecosystems, including the California Bay-Delta. The Department will work with Federal interagency working groups to de

velop performance measures and tools to identify those restoration activities that yield the highest
returns to taxpayers.



### Department of the Interior (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority:

Bureau of Land Management

������������������������������������������������������������������� 1,062 1,143 1,151
Minerals Management Service

����������������������������������������������������������������� 163 181 190
Office of Surface Mining

���������������������������������������������������������������������������� 164 163 146

Bureau of Reclamation/CUPCA

���������������������������������������������������������������� 1,124 1,129 1,108

U

. S

. Geological Surv ey

����������������������������������������������������������������������������� 1,044 1,112 1,133

Fish and Wildlife Service

��������������������������������������������������������������������������� 1,443 1,647 1,642

National Park Service

������������������������������������������������������������������������������� 2,558 2,791 2,759

Bureau of Indian Affairs

���������������������������������������������������������������������������� 2,379 2,619 2,566
Office of the Special Trustee

��������������������������������������������������������������������� 182 186 160

All other

����������������������������������������������������������������������������������������������������� 1,133 1,183 1,250

Wildland Fire (non-add)

���������������������������������������������������������������������������� 859 856 934
Subtotal, Gross discretionary budget authority

����������������������������������������������� 11,252 12,154 12,105
Mandatory Savings Proposals

������������������������������������������������������������������ — — –70

Total, Discretionary budget authority

� �������������������������������������������������������������� 11,252 12,154 12,035

Memorandum:

������������������������������������������������������������������������������������������������ Budget authority from American Recovery and Reinvestment Act

����������������� 3,005

— — Budget authority from supplementals

������������������������������������������������������������� 50

— —

Total, Discretionary outlays

����������������������������������������������������������������������������� 11,298 12,387 12,439

### 94 DEPARTMENT OF THE INTERIOR



### Department of the Interior

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Memorandum: Outlays from American Recovery and Reinvestment Act

������� 168 1,255 1,128

Mandatory Outlays:

Cobell Settlement

Legislative proposal, Payments from the Judgment Fund

�������������������� — –2,000

— Legislative proposal, Payments for Trust Land Purchasing

������������������ — 100 400

All other

Existing law

������������������������������������������������������������������������������������������ 485 420 334
Legislative proposals

���������������������������������������������������������������������������� — — –96

Total, Mandatory outlays

��������������������������������������������������������������������������������� 485 –1,480 638

Total, Outlays

�������������������������������������������������������������������������������������������������� 11,783 10,907 13,077

Credit activity

Guaranteed Loan Commitments:
Indian Guaranteed Loan Program

������������������������������������������������������������ 78 134 132
Total, Guaranteed loan commitments

������������������������������������������������������������� 78 134 132

### 95 The President’s Budget for the Department of Justice (DOJ) is $29.2 billion. The Budget ad

dresses key priorities in national security and crime-fighting programs in the FBI and other DOJ components; addresses needs in Indian Country, and combats financial fraud. The Bud

get also puts more police officers on the beat by funding the Community Oriented Policing Ser

vices (COPS) hiring program; provides other vital support for innovative State and local law enforcement efforts; and secures the Nation’s

borders.

Increases Funding to Support the Hir

ing of Additional Police Officers Across the Country. The Budget includes $600 million, an increase of $302 million, to support the hir

ing or retention of police officers in communi

ties across the country. Supporting the hiring of **Funding Highlights:**

• Continues to strengthen and expand local law enforcement agencies by providing $600 million as part of the President’s multi-year commitment to fund the hiring of 50,000 additional police

officers nationwide.

• Steps up the effort to combat financial fraud and protect public investments in our Nation’s financial stability.

• Expands targeted, place-based efforts to combat violent crime.

• Strengthens efforts to combat violence against women by providing $538 million, an increase of 29 percent.

• Reinvigorates Federal Civil Rights Enforcement.

• Promotes public safety and economic opportunity by providing re-entry programming for prisoners who need support to successfully reintegrate into their communities.

• Strengthens the Department’s capacity to target violent criminal activity and makes sure the

Nation’s borders are secure.

• Addresses the national security and intelligence challenges confronting the FBI and other Department of Justice components.

• Increases efforts to target and combat violent drug trafficking cartels and organized criminal enterprise operations.

• Expands law enforcement, prosecutorial and grant assistance, and improves their coordination in Indian Country. 

# DEPARTMENT OF JUSTICE

### 96 DEPARTMENT OF JUSTICE

police officers will help States and communities prevent the growth of crime in our communities.

Combats Financial Fraud. To combat finan

cial and other sophisticated crime problems, DOJhas developed a strategy of using intelligencebased and prosecutor-led task forces to leverage the resources and expertise of the complete law enforcement spectrum. For example, the Depart

ment has established an interagency task force to combat financial crime. The Attorney General and the Secretary of the Department of Health

and Human Services have also established a

Health Care Fraud Prevention and Enforcement Teams (HEAT) task force initiative to combat

medical fraud. The task forces establish and co

ordinate investigative and enforcement priorities across multiple agencies. The Budget supports these efforts by providing resources for additional FBI agents and DOJ attorneys to investigate and prosecute major white collar crime, as well as mortgage and healthcare fraud cases.

Expands Targeted, Place-Based Efforts

to Curb Violent Crime. The Budget provides $112 million for place-based, evidence-supported,

initiatives to combat violence in local communi

ties, including $25 million for the CommunityBased Violence Prevention Initiatives that aim to reduce gun and other violence among youth gangs in cities and towns across the country, and $37 million for the Attorney General’s Children Exposed to Violence Initiative, which targets the youth most affected by violence and most suscep

tible to propagating it as they grow up. A new initiative, the Byrne Criminal Justice Innova

tion Program, for which the Budget requests $40 million, is a central component of the Adminis

tration’s interagency initiative on Neighborhood

Revitalization.

Strengthens Efforts to Combat Violence Against Women. The Budget includes $538 mil

lion, an increase of $120 million, to support wom

en victims of violence, including domestic abuse

and sexual assault victims. The numbers are staggering: last year, over a half million non-fa

tal violent victimizations were committed against women by an intimate partner. In 2007, 64 per

cent of female homicide victims were murdered by a family member or intimate partner. Many other women were harmed by people they did not

know.

Reinvigorates Federal Civil Rights

Enforcement. To strengthen civil rights en

forcement against racial, ethnic, sexual orienta

tion, religious, and gender discrimination, the Budget includes an 11 percent increase in fund

ing for DOJ’s Civil Rights Division. This invest

ment will help the Division handle implementa

tion of a historic new hate crimes law.

Combats Drug-trafficking and Organized Criminal Enterprises. The Budget includes an increase of $37 million for a comprehensive ap

proach to combating drugs and crime through enhancing the Organized Crime Drug Enforce

ment Task Forces (OCDETF) and provides an additional $54 million to expand the Drug En

forcement Administration’s El Paso Intelligence Center (EPIC). The OCDETF task forces utilize the full capabilities of DOJ, including both agents and attorneys, to target major drug-trafficking and criminal organizations. EPIC enables Fed

eral, State and local law enforcement partners to share real-time intelligence and unique capabili

ties of participating members to target, disrupt, and dismantle major drug trafficking cartels and criminal enterprise operations. The initiative

also enhances the Department’s ability to combat gunrunners along the U.S. Southwest Border. Ad

ditionally, the Budget includes additional funding for enforcement along the Nation’s borders, com

bining the efforts of law enforcement and pros

ecutorial units to investigate arrest, detain, and prosecute criminal illegal aliens, as well as those who enter or stay in the country without proper

documentation.

Counters the Threat of Terrorism and Strengthens National Security. The Budget includes $145 million in enhancements for the FBI’s national security programs, and $100 mil

lion, including $8 million in program enhance

ments, for the National Security Division to protect the American people from terrorist acts. Funding supports counterterrorism, counter-THE BUDGET FOR FISCAL YEAR 2011 

### 97

intelligence, cyber-security and other threats against our National Security. The Budget also provides $73 million for the transfer, prosecution, and incarceration of Guantanamo Bay detainees. The Administration further anticipates working with the Congress to identify additional funding and other resources that may be needed in 2010 to address extraordinary Federal, State, and local security requirements associated with terrorism trials that may begin in 2010 and continue into

2011.

Supports Detention and Incarceration Programs and Expands Prisoner Re-entry Programs. The Budget provides $6.8 billion for the Bureau of Prisons to activate new prisons and increase correctional staff, and $1.5 billion for the

Office of the Detention Trustee so that sentenced

criminals and detainees are housed in facilities that are safe, humane, cost-efficient, and appro

priately secure. The Budget also provides $330

million for the State Criminal Alien Assistance Program to assist States and localities in the identification, status determination and conduct of removal proceedings of incarcerated illegal aliens. The Budget also provides $144 million for prisoner re-entry programs, including $100 mil

lion for the Office of Justice Programs to admin

ister grant programs authorized by the Second Chance Act and $30 million for residential sub

stance abuse treatment programs in State and local prisons and jails. These programs reduce recidivism by providing counseling, job training, drug treatment, and other transitional assistance so that former prisoners can reintegrate into the job market and community life.

Enhances Capacity to Address Needs in Indian Country. The Budget includes $19 mil

lion to support 45 additional FBI agents for Indi

an country, and $256 million in grants and tech

nical assistance to increase public safety efforts in tribal areas. The funding for additional FBI agents will be provided on a reimbursable basis through the Department of the Interior. The De

partments of Justice and the Interior will coor

dinate the deployment of Federal public safety resources to best address the public safety needs in Indian Country.



### Department of Justice (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority: Federal Bureau of Investigation

������������������������������������������������������������������� 7,340 7,736 8,165
Drug Enforcement Administration

���������������������������������������������������������������� 2,045 2,028 2,130
Federal Prison System

��������������������������������������������������������������������������������� 6,172 6,188 6,804

United States Marshals Service

������������������������������������������������������������������� 956 1,145 1,207
Bureau of Alcohol, Tobacco, Firearms, and Explosives

������������������������������� 1,054 1,119 1,163

Detention Trustee

����������������������������������������������������������������������������������������� 1,289 1,439 1,534
United States Attorneys

������������������������������������������������������������������������������� 1,837 1,934 2,041
General Legal Activities

������������������������������������������������������������������������������� 806 875 976
National Security Division

���������������������������������������������������������������������������� 84 88 100
Office of Justice Programs, Office of Community Oriented Policing

Services, Office on Violence Against Women

������������������������������������������ 2,915 3,540 3,364

### 98 DEPARTMENT OF JUSTICE



### Department of Justice

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Organized Crime and Drug Enforcement Task Force

���������������������������������� 515 528 579

All other

�������������������������������������������������������������������������������������������������������� 940 925 1,127
Subtotal, Discretionary budget authority

������������������������������������������������������������ 25,953 27,545 29,190

Less Crime Victims’ Fund cancellation

��������������������������������������������������������� — — -4,552

Less Assets Forfeiture Fund cancellation

���������������������������������������������������� — — -495
Total, Discretionary budget authority

� ����������������������������������������������������������������� 25,953 27,545 24,143

Memorandum:
Budget authority from American Recovery and Reinvestment Act

�������������������� 4,012

— — Budget authority from supplementals

���������������������������������������������������������������� 245

— — FBI Overseas Contingency Operations

� ������������������������������������������������������������� — 101

— Total, Discretionary outlays

�������������������������������������������������������������������������������� 24,509 26,709 26,075

Memorandum: Outlays from American Recovery and Reinvestment Act

���������� 1,160 1,843 664

Mandatory Outlays:
Existing law

�������������������������������������������������������������������������������������������������� 2,060 1,868 5,232
Legislative proposal

������������������������������������������������������������������������������������� — — —

Total, Mandatory outlays

������������������������������������������������������������������������������������ 2,060 1,868 5,232

Memorandum: Outlays from American Recovery and Reinvestment Act

���������� — — —

Total, Outlays

����������������������������������������������������������������������������������������������������� 26,569 28,577 31,307

### 99 The President’s Budget provides $14 billion for the Department of Labor (DOL) to prepare work

ers for good jobs that will allow them to support their families; guarantee fair, safe and healthy workplaces and secure retirements for America’s workers; and fulfill its other core responsibilities.

Reforming the Job Training System. Whether they want to find a job, build basic or occupational skills, earn a postsecondary cer

tificate, credential, or degree, or get guidance on charting a career path, all Americans deserve ac

cess to high-quality job training throughout their careers. That is why the Budget calls for reform of the Workforce Investment Act (WIA), which supports almost 3,000 One-Stop Career Centers nationwide and a range of other services. With $6 billion for WIA at DOL—and an additional $4 billion in the Department of Education—the Budget calls for reforms to improve WIA by:

• Creating a Workforce Innovation Part

nership to Streamline Service De livery

and Invest in What Works. Over 30 Fed

eral programs provide job training and **Funding Highlights:**

• Supports reform of the Workforce Investment Act (WIA), which authorizes $10 billion for job training and employment services.

• Creates a Workforce Innovation Partnership with the Department of Education and establishes two innovation funds that will support and test promising approaches to job training as well as encourage States and localities to work across programmatic silos to improve services.

• Starts a joint Labor-Treasury initiative to stop the inappropriate misclassification of employees as independent contractors.

• Rebuilds worker protection programs to strengthen enforcement of labor standards.

• Expands families’ access to paid leave by creating a new fund to help States launch paid leave programs.

• Boosts funding for unemployment insurance integrity efforts and proposes legislative changes that would reduce improper payments by over $4 billion and employer tax evasion by $300 million over 10 years.

• Initiates a multi-agency legislative proposal to establishes automatic workplace pensions and expand access to the saver’s credit, and proposes regulatory reforms to give all workers access to retirement savings opportunities, provide Americans with incentives to save throughout their working careers, and protect pension plans. 

# DEPARTMENT OF LABOR

### 100 DEPARTMENT OF LABOR

related services. Yet today, workers and young people looking for effective training must navigate a maze of programs with little information about how well these pro

grams work. Leveraging funding from the WIA formula programs, the 2011 Budget sets aside $261 million to establish two in

novation funds that will support and test promising approaches to training, break

ing down program silos, building evidence about effective practices, and investing in what works. With a $101 million increase in the Youth funding stream, the Budget re

directs 15 percent of total Youth funding to a Youth Innovation Fund to pilot innovativemodels for delivering summer and yearround work experiences and comprehensive services to disconnected youth. The Work

force Innovation Fund pulls 5 percent from

the Adult and Dislocated Worker streams to support and test “learn and earn” strat

egies like apprenticeships and on-the-job training; promote regional and sectoral col

laborations; and support other innovations. In addition, DOL will work closely with the Department of Education to administer the innovation grants, and use them as a mech

anism for encouraging States and localities to work across programs to improve service delivery and pa rticipant outcomes.

• Meeting the Needs of Regional Econo

mies and Employers. Labor markets are typically regional, yet the workforce system is designed around State and local bound

aries. The system also does not do a good enough job matching training with employ

er demand. Through new innovation funds and WIA reauthorization, the Administra

tion will facilitate regional collaboration and close linkages with employers so that train

ing leads to good jobs.

• Establishing a Transparent Account

ability System that Encourages Suc

cess. The current accountability system dissuades States and localities from serving the populations that most need their assis

tance, like low-skilled adults, individuals with disabilities, and others needing more specialized and intensive services. The Bud

get supports efforts to overhaul performance measures and incentives to discourage “cream-skimming,” more accurately capture the value added by different services, and encourage better outcomes for individuals at every level of the workforce system. Per

formance data should be widely available to policymakers, program managers, and the participants themselves, so they can make informed choices about training.

• Focusing on High-Growth Sectors and

Workers Often Left Behind. The Budget makes strategic investments in competitive programs to target high-growth sectors and serve populations often left behind, includ

ing $85 million for green job training and $40 million for transitional jobs programs. The Budget also supports an initiative to reform and improve Job Corps, by setting high standards for Job Corps centers and taking quick and decisive action to address problems.

Protecting Benefits for Employees by En

suring Proper Classification. When employ

ees are misclassified as independent contractors, they are deprived of benefits and protections to which they are legally entitled. For example, in

dependent contractors do not receive overtime and are ineligible to receive unemployment ben

efits. Misclassification also has a budgetary im

pact, reducing receipts in Treasury and the Social Security, Medicare and Unemployment Insurance

Trust Funds. As part of the 2011 Budget, the Departments of Labor and Treasury are pursu

ing a joint proposal that eliminates incentives in law for employers to misclassify their employees; enhances the ability of both agencies to penalize employers who misclassify; and restores protec

tions to employees who have been denied them because of their improper classification. This pro

posal would increase Treasury receipts by more than $7 billion over 10 years. The 2011 Budget for DOL includes an additional $25 million to tar

get misclassification with 100 additional enforce

ment personnel and competitive grants to boost States’ incentives and capacity to address this problem.THE BUDGET FOR FISCAL YEAR 2011 

### 101

Rebuilding Worker Protection Programs. The Budget includes a $67 million (4 percent) increase for the Department’s worker protec

tion agencies to ensure they have the resources to meet their responsibilities to protect the health, safety, wages and working conditions,

and retirement security of the nation’s workforce. The 2011 Budget builds on the 2010 Budget pol

icy of returning worker protection programs to the 2001 staffing levels, after years of decline. In addition, the Budget provides additional resourc

es for the regulatory and enforcement activities

of these agencies.

Helping States Provide Paid Family Leave

to Workers. Too many families must make the painful choice between the care of their fami

lies and a paycheck they desperately need. The Family and Medical Leave Act allows workers to take job-protected time off unpaid, but millions of families cannot afford to use unpaid leave. A handful of States have enacted policies to offer paid family leave, but more States should have the chance. The Budget establishes a $50 million State Paid Leave Fund within DOL that will pro

vide competitive grants to help States that chooseto launch paid-leave programs cover their startup costs. The Budget also provides resources to allow DOL to explore ways to improve the collec

tion of data related to intersection of work and family responsibilities.

Strengthening Access to, and Accuracy of, Unemployment Benefits. Working with the Congress, the Administration has already extend

ed and expanded unemployment insurance (UI) benefits to historic levels and offered powerful in

centives for States to make permanent changes to modernize their UI programs. In response to these incentives, 26 States have changed their laws so that up to 20 weeks of additional bene

fits are available to workers who have exhausted their regular and Emergency Unemployment Compensation benefits; and 32 States now offer

benefits to recent entrants to the workforce who lose their jobs. States ha ve also granted benefits to part-time workers, those who must leave their jobs because of domestic violence or other compel

ling family reasons, and those seeking to retool

for another career.

At the same time, the Administration believes UI benefits should go to the right workers in the right amounts. When States have to finance high levels of UI improper payments, employers face higher taxes and workers may see cuts in their benefit levels. Despite the efforts of States to reduce improper payments, over $11.4 billion in UI benefits were erroneously paid in 2009— an overpayment rate of almost 10 percent. The Administration will tackle this problem by boost

ing funding for UI integrity efforts and proposing legislative changes that together would reduce improper payments by over $4 billion and em

ployer tax evasion by $300 million over 10 years.

Improving Retirement Security. After a lifetime of employment, American workers de

serve to know that their efforts have resulted in

a secure retirement. The Administration is com

mitted to giving Americans more and better choic

es to save for retirement while also strengthening the existing private pension system. The Budget proposes a multi-agency effort to expand and im

prove employment-based retirement security by:

• Establishing Automatic Workplace

Pensions. Currently, 78 million working Americans—roughly half the workforce— lack employer-based retirement plans. The 2011 Budget proposes a system of automatic workplace pensions that will expand access to tens of millions of workers who currently lack pensions. Under the proposal, employ

ers who do not currently offer a retirement plan will be required to enroll their employ

ees in a direct-deposit IRA account that is compatible with existing direct-deposit pay

roll systems. Employees may opt-out if they choose. The smallest firms would be exempt.

• Doubling the Small Employer Pension Plan Startup Credit. Under current law, small employers are eligible for a tax cred

it equal to 50 percent (up to a maximum of $500 a year for three years) of the start-up expenses of establishing or administering a new retirement plan. To encourage small

### 102 DEPARTMENT OF LABOR

employers to offer pensions to their work

ers in connection with the automatic IRA proposal, the Budget will increase the maxi

mum credit from $500 a year to $1,000 per

year.

• Reforming and Expanding the Saver’s

Credit. The Budget proposes to expand retirement savings incentives for working families by modifying the existing Saver’s Credit to provide a 50 percent match on the retirement savings of families that earn less than $85,000 (up to $1,000 of savings would be matched). The credit would be fully re

fundable to create savings incentives fair to

all workers. Studies indicate that automatic enrollment combined with a savings match significantly increases the savings participa

tion rate for low and middle income workers. This proposal is expected to increase signifi

cantly both the number of Americans who

save for retirement and the overall amount of amount of retirement wealth they accu

mulate.

• Improving the Defined-Contribution Savings System. A majority of American workers rely on 401(k)-style plans to finance their retirements. The Budget proposes a number of initiatives to improve the trans

parency and adequacy of 401(k) retirement savings. Specifically, DOL will undertake regulatory efforts to reduce barriers to an

nuitization of 401(k) plan assets; increase the transparency of pension fees; improve transparency of target date and other de

fault retirement investments; and reduce conflicts of interest between pension advis

ers and fiduciaries.

• Expanding Opportunities for Auto

matic Enrollment in 401(K) and Other Retirement Savings Plans. Automatic enrollment typically boosts participation in 401(k) retirement plans from about 70 per

cent to more than 90 percent, and it is par

ticularly effective in increasing the partici

pation of low-income and minority workers. But while nearly half of larger companies with 401(k) plans have adopted automatic enrollment, fewer medium-sized or small

businesses have done so. The Administra

tion will streamline the process for 401(k) plans to adopt automatic enrollment; make it easier to increase saving over time; and al

low automatic enrollment in SIMPLE-IRAs.



### Department of Labor

(In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority: Training and Employment Service

������������������������������������������������������������������� 3,626 3,829 3,925
Unemployment Insurance Administration

�������������������������������������������������������� 3,511 3,990 3,581
Employment Service/One-Stop Career Centers

���������������������������������������������� 793 788 788
Office of Job Corps

������������������������������������������������������������������������������������������ 1,684 1,708 1,707
Community Service Employment for Older Americans

������������������������������������ 572 825 600

Bureau of Labor Statistics

�������������������������������������������������������������������������������� 597 611 645
Occupational Safety and Health Administration

����������������������������������������������� 513 559 573
Mine Safety and Health Administration

������������������������������������������������������������ 347 357 361
Wage and Hour Division 1

��������������������������������������������������������������������������������� 193 224 244
Office of Federal Contract Compliance Programs

������������������������������������������� 82 103 113THE BUDGET FOR FISCAL YEAR 2011 

### 103

Department of Labor

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Office of Labor-Management Standards

���������������������������������������������������������� 45 41 45
Office of Workers’ Compensation Programs

���������������������������������������������������� 103 108 127
Employee Benefits Security Administration

����������������������������������������������������� 143 155 162
Veterans Employment and Training

������������������������������������������������������������������ 239 256 262
Departmental Management: 314 356 429
Bureau of International Labor Affairs (non-add)

������������������������������������������ 86 93 115
Solicitor of Labor (non-add)

������������������������������������������������������������������������� 101 117 123
Foreign Labor Certification

������������������������������������������������������������������������������� 68 68 66
Office of Disability Employment Policy

������������������������������������������������������������� 27 39 39

State Paid Leave Fund

������������������������������������������������������������������������������������� — — 50

All other

������������������������������������������������������������������������������������������������������������ 36 241 251
Total, Discretionary budget authority

� ��������������������������������������������������������������������� 12,893 14,266 13,967

Memorandum: Budget authority from American Recovery and Reinvestment Act

���� 4,805 — —

Total, Discretionary outlays

������������������������������������������������������������������������������������� 12,125 14,674 13,936

Memorandum: Outlays from American Recovery and Reinvestment Act

�������������� 882 2,941 565

Mandatory Outlays:
Unemployment Insurance Benefits
Existing law

������������������������������������������������������������������������������������������������� 93,783 126,787 82,385
Legislative proposal

������������������������������������������������������������������������������������ — 31,000 17,912
Trade Adjustment Assistance
Existing law

������������������������������������������������������������������������������������������������� 416 810 1,497
Legislative proposal

������������������������������������������������������������������������������������ — — 145
Pension Benefit Guaranty Corporation

������������������������������������������������������������ 194 -86 -1,073
Black Lung Benefits Program

� �������������������������������������������������������������������������� 3,060 524 512
Federal Employees’ Compensation Act 2
Existing law

������������������������������������������������������������������������������������������������� 1,246 184 180
Legislative proposal

������������������������������������������������������������������������������������ — — -10
Energy Employees Occupational Illness Compensation Program Act

������������� 1,168 1,080 960

All other

������������������������������������������������������������������������������������������������������������ -2,146 -2,534 271
Total, Mandatory outlays

���������������������������������������������������������������������������������������� 97,721 157,765 102,779

Memorandum: Outlays from American Recovery and Reinvestment Act

�������������� 27,434 33,896 1,533

Total, Outlays

���������������������������������������������������������������������������������������������������������� 109,846 172,439 116,715

1 In the 2011 Budget, funding previously requested for the component agencies and offices under the heading “Employment Standards Administration Salaries and Expenses” is requested separately for the Office of Workers’ Compensation Programs, Wage and Hour Division, Office of Federal Contract Compliance Programs, and Office of Labor-Management Standards

.

2 2009 outlays are lower due to delayed reimbursements from the Postal Service

.

### 105 **Funding Highlights:**

• Increases funding for the President’s Global Health Initiative, including increased efforts to reduce mortality of mothers and children under five, avoid unintended pregnancies, and work towards the elimination of some neglected tropical diseases. As part of this effort, the Budget also expands support for the President’s Emergency Plan for AIDS Relief to prevent new HIV infections while providing care and treatment to millions of people, and for the President’s Malaria Initiative to dramatically reduce the prevalence of this disease.

• Increases funding for the President’s Global Hunger and Food Security Initiative to help poor countries improve the nutritional and income status of millions of people living in extreme poverty and suffering from hunger by 2015.

• Increases aid to Afghanistan and Pakistan to revitalize economic development and confront the resurgence of the Taliban.

• Supports continued progress toward a sovereign, stable, and self-reliant Iraq and prepares the Department of State to assume responsibility for security, logistics, and police training programs as part of the military-to-civilian transition in Iraq.

• Helps developing nations adapt to climate change and pursue low-carbon development.

• Recognizes that diplomacy and development activities are instrumental in promoting U.S. National Security interests and provides critical funding necessary to support greater civilian capacity to meet expanded roles.

• Maintains path to achieve goal of 11,000 Peace Corps volunteers by 2016.

• Supports President Obama’s vision of Global Engagement through activities to expandeconomic opportunity, foster scientific and technological innovation, and strengthen people-topeople connections.

• Promotes sustainable economic growth to help reduce global poverty with support for new Millennium Challenge Corporation compacts.

• Supports the poorest populations globally through U.S. contributions to the Multilateral Development Banks. 

# DEPARTMENT OF STATE AND OTHER
INTERNATIONAL PROGRAMS

### 106 DEPARTMENT OF STATE AND OTHER INTERNATIONAL PROGRAMS

The Department of State, the U.S. Agency for International Development (USAID), and other international programs advance the interests of the United States through engagement, part

nership, and the promotion of universal values. Through the power of example and the empow

erment of people, using diplomatic and devel

opment tools, the Administration is working to forge the global consensus required to defeat the threats, manage the challenges, and seize the opportunities of the 21st century.

Increases Funding for the President’s

Global Health Initiative. The Administration

will build on its commitment to save millions of lives through increased investments in global health activities. The Budget includes increased funding to combat the HIV/AIDS crisis by: fo

cusing on increasing treatment and prevention; ramping up maternal and child health program

ming to reduce mortality of mothers and children under five and decrease the prevalence of malnu

trition; expanding investments in family planning activities, malaria, tuberculosis, and neglected tropical diseases; and strengthening local health systems to enhance capacity and long-run sus

tainability of each health program. Alongside our multilateral partners, the United States will continue to provide global leadership in fulfilling our shared responsibility and our common prom

ise to improve the health of the world’s poorest populations.

Promotes U.S. Strategy in Afghanistan

and Pakistan. The 2011 Budget increases U.S. resources in support of the President’s strategy to disrupt, dismantle, and defeat al Qaeda in Af

ghanistan and Pakistan. The Budget increases assistance to both countries, providing addi

tional funding for governance, reconstruction, and other development activities that will coun

ter extremists. For Pakistan, the Budget also increases security assistance and funds a new signature energy project. The Budget expands the number of civilian personnel in Afghanistan and Pakistan in an effort to build government capacity, increase diplomatic engagement, man

age expanded assistance programs, and reduce the potential for fraud and misuse of American funding.

Supports Strategic Realignments in Iraq. The 2011 Budget aligns U.S. assistance efforts in Iraq with the U.S.-Iraq Strategic Framework Agreement and provides support for continued progress toward a sovereign, stable, and self-re

liant Iraq. The Budget provides the Department of State with the resources to prepare to assume responsibility for key programs that have been funded and led by the Department of Defense, including police capacity building, and provides security and logistic support for U.S. civilians deployed around the country. The Budget also continues to provide support for Iraqis who have been displaced from their homes.

Fights Hunger and Expands Food Security

Efforts. The 2011 Budget increases funding for agriculture development and nutrition programs as part of a multi-year plan to lift a significantnumber of people out of poverty and reduce underfive malnutrition for millions of children by 2015. The Budget provides assistance through bilateral assistance and a new multi-donor facility admin

istered by the World Bank to poor countries that make policy and financial commitments to address their internal food security needs. Additional as

sistance will help targeted countries increase ag

ricultural productivity, improve agricultural re

search and development, and expand markets and trade while monitoring and evaluating program performance. The Budget also maintains strong support for food aid and other humanitarian as

sistance.

Helps Developing Nations to Adapt to Climate Change and Pursue Low-Carbon Development. To reduce greenhouse gas emis

sions worldwide, the United States will spur the development and dissemination of clean energy technologies and increase the sequestration of carbon stored in soils, plants, and trees. The United States will take prompt, substantial ac

tion to help vulnerable countries adapt and build resilience to the effects of climate change. The top priority is to support the development of low-carbon development strategies that containTHE BUDGET FOR FISCAL YEAR 2011 

### 107

measureable, reportable, and verifiable actions, laying the groundwork for meaningful reductions in national emissions trajectories.

Maintains Path to Increase Peace Corps

Volunteers. The 2011 Budget funds the second year of the President’s initiative to significantly increase the number of Peace Corps volunteers, and puts the Peace Corps on track to grow by 50 percent so that it reaches 11,000 volunteers by

2016.

Aligns Resources with Global Engage

ment Priorities. The 2011 Budget supports President Obama’s vision of global engagement that is based on mutual respect, the pursuit of sustainable partnerships in areas of mutual in

terest, and a commitment to listening to and working with local stakeholders, with an empha

sis on women and youth. The Budget supports ac

tivities designed to expand economic opportunity including job creation and employment-focused education efforts; foster scientific and technologi

cal innovation; and strengthen people-to-people connections through exchange programs.

Combats Trafficking in Persons World

wide. The 2011 Budget supports the Adminis

tration’s efforts to combat trafficking in persons and assist in the coordination of anti-trafficking efforts both worldwide and domestically. It will allow the United States to lead in advancing public awareness and advocacy in concert with non-governmental organizations, international organizations, Congress and the media; with our programs focusing on the “3P” paradigm of prosecuting traffickers, protecting victims, and preventing trafficking in persons.

Supports the Poorest Populations Globally . The Multilateral Development Banks (MDBs) provide concessional financing to meet the needs of the poorest populations globally, in

cluding in fragile and post-conflict countries and in countries that have disproportionally felt the effects of the global financial crisis. The MDBs play a particularly important role in regions of high need like Sub-Saharan Africa, while working throughout the developing world to help countries achieve sustained economic growth and poverty

reduction. U.S. contributions to the MDBs lever

age other donor resources and increase the U.S.’s influence, credibility, and effectiveness globally. The Budget also provides funding for new Millen

nium Challenge Corporation compacts in eligible countries, such as Indonesia and Zambia, to re

duce poverty and stimulate economic growth.

Realigns Non-Military Contingency and Stabilization Activities of the Department of Defense and the Department of State. The Budget proposes a Complex Crises Fund within the Department of State that would replace cur

rent authorities of the Department of Defense to provide non-military reconstruction, security, and stabilization assistance funding. The account would provide a source of flexible contingency funding to meet unforeseen reconstruction and

stabilization needs.



### Department of State and Other International Programs (In millions of dollars)

Actual
2009 Estimate

2010 1 2011

Spending
Discretionary Budget Authority: Administration of Foreign Affairs

��������������������������������������������������������������� 9,974 13,320 12,377
International Organizations and Peacekeeping

���������������������������������������� 3,993 3,808 3,778
Economic Support Fund

��������������������������������������������������������������������������� 7,122 8,164 7,812

Global Health and Child Survival

�������������������������������������������������������������� 7,289 7,829 8,513

### 108 DEPARTMENT OF STATE AND OTHER INTERNATIONAL PROGRAMS



### Department of State and Other International Programs—Continued (In millions of dollars)

Actual
2009 Estimate

2010 1 2011

International Narcotics and Law Enforcement (includes ACP)

����������������� 1,844 2,448 2,136
Migration and Refugee Assistance

����������������������������������������������������������� 1,675 1,693 1,605
Non-proliferation, Anti-terrorism, Demining Programs

������������������������������ 632 754 758
Foreign Military Financing

������������������������������������������������������������������������� 5,007 5,480 5,473
Pakistan Counterinsurgency Capability Fund

������������������������������������������� 700 — 1,200
Assistance for Europe, Eurasia, and Central Asia

������������������������������������ 918 742 716
Development Assistance

��������������������������������������������������������������������������� 2,004 2,495 2,946
USAID Operating Expenses

��������������������������������������������������������������������� 1,059 1,389 1,476
Broadcasting Board of Governors

������������������������������������������������������������� 725 746 769
Millennium Challenge Corporation

������������������������������������������������������������ 875 1,105 1,280
Export-Import Bank

����������������������������������������������������������������������������������� –177 3 –9
Overseas Private Investment Corporation

������������������������������������������������ –173 –172 –189
Peace Corps

��������������������������������������������������������������������������������������������� 340 400 446
Multilateral Development Banks

���������������������������������������������������������������� 1,493 2,044 2,957
Other State and International Programs

��������������������������������������������������� 3,595 2,924 2,726
Food for Peace, USDA P.L. 480 Title II (non-add)

................................. 2,321 1,690 1,690
Total, Discretionary budget authority (including supplementals)

��������������������� 48,895 55,172 56,770

Memorandum: Budget authority from American Recovery and Reinvestment Act

................. 600 — — Budget authority from enacted supplementals

............................................... 11,946 1,841 — Budget authority from requested supplementals

............................................ — 4,461 —

Total, Discretionary outlays

����������������������������������������������������������������������������� 41,044 49,906 54,662

Memorandum: Outlays from American Recovery and Reinvestment Act

....... 29 356 135

Total, Mandatory outlays

��������������������������������������������������������������������������������� –3,941 1,087 –853

Total, Outlays

�������������������������������������������������������������������������������������������������� 37,103 50,993 53,809

Credit activity

Direct Loan Disbursements:
Export-Import Bank

����������������������������������������������������������������������������������� 1,481 50 25
All other programs

������������������������������������������������������������������������������������� 360 7,435 5,909

Total, Direct loan disbursements

��������������������������������������������������������������������� 1,841 7,485 5,934

Guaranteed Loan Commitments:
Export-Import Bank

����������������������������������������������������������������������������������� 14,599 13,500 14,425
All other programs

������������������������������������������������������������������������������������� 692 2,226 2,394
Total, Guaranteed loan commitments

������������������������������������������������������������� 15,291 15,726 16,819

1 The 2010 Estimate includes $1

. 8 billion of the 2010 President’s Request that was forward funded in the 2009 supplemental

.

### 109 The Department of Transportation (DOT) is focused on its core mission of promoting safety and increasing mobility, and supporting the de

velopment of infrastructure that will underpin job creation for years to come. For 2011, DOT has several major initiatives in these areas, in addition to plans to deliver transportation funds based on greater use of analysis and consider

ation of program performance.

Creates a National Infrastructure In novation

and Finance Fund. The Budget includes $4

billion to create a National Infrastructure In

novation and Finance Fund to invest in projects of regional or national significance. This marks an important departure from the Federal Gov

ernment’s traditional way of spending on infra

structure through grants to specific States and localities. Established as a new operational unit within DOT, the Fund will directly provide resources for projects through grants, loans, or a blend of both, and will effectively leverage non-Federal resources, including private capi

tal. The Fund will allocate resources based on demonstrable merit and analytical measures of performance. The Fund will provide planning, feasibility, and analytical capacity to help spon

sors identify projects from around the country and then carefully select the most worthwhile.

Establishes a New Federal Transit Safety Program. Unlike other modes of transporta

tion, closed system rail transit services (gener

ally, metro area subways and light rail systems) are not overseen by Federal safety regulators, but rather are subject to review by a patchwork **Funding Highlights:**

• Provides $4 billion for a new National Infrastructure Innovation and Finance Fund, which will invest in high-value projects of regional or national significance.

• Establishes a new $30 million Federal transit safety program to address critical needs.

• Invests in modernizing the air traffic control system by increasing funding for NextGen by more than 30 percent.

• Commits to developing long-run solutions for surface transportation finance and for improving program performance.

• Helps communities to become more livable and sustainable by allocating $527 million for the Department’s investments as part of the President’s multi-agency Partnership for Sustainable

Communities.

• Sustains large-scale, multi-year support for high-speed rail, with $1 billion to fund promising and transformative projects. 

# DEPARTMENT OF TRANSPORTATION U N
I T E

D

S

T

A

T E S O F

A

M

E R I C A D E P A R T M

E

N

T O F T R A

N

S

P

O

R T A T

I O

N

### 110 DEPARTMENT OF TRANSPORTATION

of State safety organizations. Recent deadly acci

dents in Washington D.C., Boston, and San Fran

cisco underscore the need for common nationwide safety standards and for Federal enforcement of these standards. The Budget includes $30 million for a new transit safety oversight program within the Federal Transit Administration (FTA). This will enable FTA to hire new staff and to imple

ment a comprehensive safety oversight strategy, as proposed in legislation.

Invests in Modernizing the Air Traffic Control System. The Budget provides $1.14 billion, more than a 30 percent increase from 2010 for the Next Generation Air Transportation System. NextGen is the Federal Aviation Admin

istration’s long-term effort to improve the effi

ciency, safety, and capacity of the aviation system. The 2011 Budget supports the transformation from a national ground-based radar surveillance system to a more accurate satellite-based surveil

lance system; the development of more efficient routes through the airspace; and the improve

ment of aviation weather information.

Commits to Developing Long-Run Solu

tions for Surface Transportation Finance and for Improving Program Performance. Surface transportation programs are at a cross

roads. The current framework for financing and allocating surface transportation investments is not financially sustainable, nor does it effectively

allocate resources to meet our critical national

needs. The Administration recommends extend

ing the current authorization through March 2011, during which time it will work with the Congress to reform surface transportation pro

grams and put the system on a viable financing path. Careful consideration is needed to design a Federal surface transportation program that leads to higher performing investments, increases people’s transportation options, promotes a sus

tainable environment, and makes our economy more productive. Further, the Federal program must generate the best investments to reduce congestion and improve safety. To do so, the Ad

ministration seeks to integrate economic analysis and performance measurement in transportation planning to ensure that taxpayer dollars are bet

ter targeted and spent.

Helps Communities to Become More

Livable and Sustainable. As part of the Presi

dent’s Partnership for Sustainable Communities initiative, the Budget includes $527 million in DOT to help State and local governments invest smarter in transportation infrastructure and le

verage that investment to advance sustainable development. The Federal Government will help stimulate comprehensive regional and communi

ty planning efforts that integrate transportation, housing, and other critical investments. This ap

proach aims to reduce greenhouse gases, improve mobility and transportation access to economic opportunity, and improve housing choices. Com

bined with $150 million in Department of Hous

ing and Urban Development planning grants, and $10 million in Environmental Protection Agency technical assistance, DOT will dedicate $527 mil

lion, focused on capacity building and transporta

tion projects, to this multi-agency effort. Because improving local quality of life is a universal chal

lenge, this place-based interagency initiative will help communities across the Nation make better coordinated, higher-performing infrastructure

investments.

Sustains Multi-Year Support for HighSpeed Rail. Building on the historic $8 billion down payment provided through the American Recovery and Reinvestment Act, the President’s Budget includes $1 billion for high-speed rail.The 2011 request supports the President’s fiveyear, $5 billion pledge in the 2010 Budget. Highspeed rail promises to give the traveling public a practical alternative to flying or driving, particu

larly where there is congestion in the skies and on the roads. With trains efficiently connecting city and business centers, travelers would enjoy

a new level of convenience not available in most parts of the country today. The Administration is dedicated to working with States and project sponsors to identify high-speed rail projects that will provide the greatest transportation, social, and environmental benefits, while maximizing the return on taxpayer dollars.THE BUDGET FOR FISCAL YEAR 2011 

### 111

Department of Transportation (In millions of dollars)

**Actual**
**2009 Estimate** 

**2010 2011** 

Spending

Discretionary Budgetary Resources:

Federal Aviation Administration

������������������������������������������������������������������ 11,959 12,477 12,953
Obligation Limitation

������������������������������������������������������������������������������� 3,515 3,515 3,515
Federal Highway Administration

� ����������������������������������������������������������������� 176 936 –263
Obligation Limitation

������������������������������������������������������������������������������ 39,715 41,107 41,363
Federal Motor Carrier Safety Administration Obligation Limitation

������������ 541 550 570
National Highway Traffic Safety Administration

������������������������������������������� 127 143 136
Obligation Limitation

������������������������������������������������������������������������������ 729 730 743

Federal Railroad Administration

������������������������������������������������������������������ 1,798 4,360 2,831

Federal Transit Administration

��������������������������������������������������������������������� 1,969 2,388 2,167
Obligation Limitation

������������������������������������������������������������������������������ 9,247 8,343 8,632

Federal Maritime Administration

����������������������������������������������������������������� 333 363 352

St

. Lawrence Seaway Development Corporation

���������������������������������������� 32 32 32
Pipeline and Hazardous Materials Safety Administration

��������������������������� 144 164 174
Research and Innovative Technology Administration

���������������������������������� 13 13 17

National Infrastructure Innovation and Finance Fund:
Legislative proposal

������������������������������������������������������������������������������� — — 4,000
Office of the Secretary

�������������������������������������������������������������������������������� 207 890 352

All other

������������������������������������������������������������������������������������������������������� 21 18 14
Total, Discretionary budgetary resources 1

������������������������������������������������������ 70,526 76,029 77,588

Memorandum:
Budget authority from American Recovery and Reinvestment Act

������������������� 48,120

— — Budget authority from supplementals

��������������������������������������������������������������� 3,013

— —

Total, Discretionary outlays

������������������������������������������������������������������������������� 68,778 73,393 74,376

Memorandum: Outlays from American Recovery and Reinvestment Act

��������� 3,652 16,363 11,359

Mandatory Outlays:

Federal Aviation Administration

������������������������������������������������������������������ –162 –159 –178
Federal Highway Administration

� ����������������������������������������������������������������� 793 1,094 900

Federal Railroad Administration

������������������������������������������������������������������� 10 15 –3

Federal Maritime Administration

����������������������������������������������������������������� 265 254 176
Pipeline and Hazardous Materials Safety Administration

��������������������������� 16 37 35
Office of the Secretary

�������������������������������������������������������������������������������� 38 53 50

All other

������������������������������������������������������������������������������������������������������� –384 –106 –50
Total, Mandatory outlays

����������������������������������������������������������������������������������� 576 1,188 930

Total, Outlays

���������������������������������������������������������������������������������������������������� 69,354 74,581 75,306

### 112 DEPARTMENT OF TRANSPORTATION



### Department of Transportation

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Credit activity

Direct Loan Disbursements: Transportation Infrastructure Financing and Innovation Program

��������������� 317 1,159 1,107
Railroad Rehabilitation and Improvement Program

������������������������������������ 96 600 600

National Infrastructure Innovation and Finance Fund

���������������������������������� — — 250

Total, Direct loan disbursements

����������������������������������������������������������������������� 413 1,759 1,957

Guaranteed Loan Commitments:
Transportation Infrastructure Financing and Innovation Program

��������������� — 40 80
Railroad Rehabilitation and Improvement Program

������������������������������������� — 100 100
Minority Business Resource Centers

���������������������������������������������������������� 3 18 18

Maritime Guaranteed Loans

����������������������������������������������������������������������� 269 350 450

Total, Guaranteed loan commitments

��������������������������������������������������������������� 272 508 648

1 Includes discretionary budget authority and obligation limitations

.

### 113 The Department of the Treasury is a leader in the President’s efforts to promote the economic prosperity and financial security of the United States. Treasury operations are critical to the core functions of government, including collect

ing over $2.3 trillion in revenue and disbursing over $2.3 trillion in payments, managing Fed

eral finances, and protecting the financial sys

tem from threats. Treasury also plays a key role in modernizing the American financial regula

tory framework and ensuring effective, trans

parent administration of programs designed to strengthen the economy. Supports the Administration’s Reform of Financial Regulation and Consumer

Protection. In June 2009, the Administration proposed comprehensive financial reform legis

lation designed to create a robust financial regu

latory system that could help prevent future eco

nomic crises. The proposal includes changes to improve the safety and soundness of the financial sector, especially large and interconnected firms, and creates a new Government entity respon

sible for monitoring financial businesses and practices that impact consumers directly. **Funding Highlights:**

• Includes resources to implement the Administration’s proposal to reform financial regulation including a new agency to protect consumers, and increases the security and convenience of Federal payment and collection transactions.

• Manages responsibly Troubled Asset Relief Program (TARP) investments to protect taxpayer interests while winding down extraordinary market interventions.

• Provides $250 million to expand job-creating investments and access to credit in disadvantaged communities through the Community Development Financial Institutions Fund.

• Invests over $8 billion in the Internal Revenue Service’s enforcement and modernization programs, while continuing to drive innovation and responsiveness in taxpayer services. The Budget supports significant new revenue-generating initiatives that will target critical areas of non-compliance, and enhances a multi-year modernization strategy that will deliver a vastly improved IRS within the next five years.

• Supports the capacity of the Department to respond to future economic challenges by expanding Treasury’s finance and tax policy resources. This increased analytical capability will also fund the Administration’s plan to strengthen oversight of financial institutions and markets so that the system is safer for consumers and investors. 

# DEPARTMENT OF THE TREASURY

### 114 DEPARTMENT OF THE TREASURY

Redirects TARP to Small Businesses and

Homeowners . The Budget continues to sup

port activities authorized under the Emergency Economic Stability Act of 2008 and the Housing and Economic Recovery Act of 2008 that help sta

bilize the financial system and restart markets critical to financing American households and businesses, through new and existing investment agreements with financial institutions including banks, servicers, insurance companies, and the Government-Sponsored Enterprises Fannie Mae and Freddie Mac. New TARP agreements will be directed toward assisting homeowners threat

ened with foreclosure and small businesses need

ing access to affordable credit. The Budget em

phasizes effective, transparent, and accountable management of the TARP. Over the past year,

financial markets have rebounded faster than ex

pected, and as a result the Budget reflects a sig

nificantly lower cost and volume of TARP asset purchases than previously estimated.

Supports Lending in Low-Income

Communities. The Budget supports the avail

ability of affordable financing in low-income communities by providing targeted support to Community Development Financial Institu

tions throughout the Nation. The $250 million in financial support will help these local finan

cial institutions offer affordable loans to small businesses, consumers, nonprofit developers, and home buyers in communities that lack access to

affordable credit. These resources will also be coordinated with resources in other agencies to support the Administration’s place-based initia

tives. New initiatives will expand financing for access to healthy foods and access to financial ser

vices in underserved communities. Supporting

the Department’s efforts to improve protections for consumers of complicated financial products, Treasury will continue its work to improve finan

cial literacy, especially among youth and young adult populations. Treasury along with its part

ners, will work to improve access to financial ser

vices for America’s unbanked and underbanked, building upon findings from its multi-year com

munity financial access pilot, which concludes in

2010. Improves Services to Taxpayers. The Ad

ministration will improve the quality of IRS ser

vices to taxpayers, providing for a better tax fil

ing experience. The Budget provides additional resources for high-quality phone service so that taxpayers’ questions are answered quickly and correctly. A top priority of the IRS is to promptly and correctly answer a taxpayer’s question the first time asked, through the most efficient and taxpayer-friendly means. The IRS will also work to improve interactions between taxpayers and tax preparation service providers through a new targeted strategy, and will further enhance elec

tronic filing capabilities through increased avail

ability of electronic forms and improved informa

tion technology infrastructure.

Streamlines Internal Processes to Deliver Tax Fairness while Targeting Waste and

Fraud. The Budget supports the IRS’ continued progress in reducing the tax gap through fair, robust, and equal application of the tax laws— including new revenue-generating enforcement initiatives that will increase recovery of tax debts by nearly $2 billion a year once the initiatives are fully mature in 2013. This set of initiatives will

be balanced with an increased focus on IRS mod

ernization, for which the Budget makes a signifi

cant commitment through nearly $200 million in targeted investments in the IRS’ new core tax

payer database and processing platform. Once complete, this modernized system will i mprove both the taxpayer experience through, for exam

ple, enhanced service capabilities such as more individualized self-service offerings, as well as the IRS’ operational effectiveness, creating a more responsive, nimble organization. The Bud

get also includes a set of innovative legislative proposals to improve the fairness, effectiveness and efficiency of tax administration, which will also narrow the tax gap.

Achieves New Savings Through Common

sense Reforms. The Budget will increase col

lections of delinquent debt owed to the Federal Government, as well as child support payments through States, expand the use of electronic payment and collection transactions, and propose other cross-cutting initiatives that are expectedTHE BUDGET FOR FISCAL YEAR 2011 

### 115

to yield approximately $2 billion in savings over the next 10 years. The Budget eliminates nearly $250 million in Federal subsidies to insurance companies for terrorism insurance. These sub

sidies are no longer necessary given the robust private market for such insurance, and domestic terrorism insurance policies are now sufficiently

available and affordable to meet demand. Ac

cording to industry data, property and casualty insurers’ surpluses—the balances available to pay claims associated with covered terrorist at

tacks—are currently estimated at over $490

billion. Strengthens the Analytic Capacity of Departmental Offices. The Budget funds addi

tional staff with expertise in finance and tax pol

icy. This investment will allow the Department to identify more effectively and address emerging economic challenges and improve policy-making capacity. Some of the new positions will support implementation of Financial Regulation Reform initiatives, including the launch of the Office of

National Insurance and the Financial Services Oversight Council, which will improve supervi

sion and regulation of financial institutions and

markets.



### Department of the Treasury (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending 1

Discretionary Budget Authority:

Internal Revenue Service

���������������������������������������������������������������������� 11,522 12,147 12,633
Financial Management Service

������������������������������������������������������������ 240 244 235
Departmental Offices

���������������������������������������������������������������������������� 279 305 346
Department-wide Systems and Capital Investments Programs

����������� 27 10 22

Bureau of the Public Debt

��������������������������������������������������������������������� 179 182 176
Department and IRS Inspectors General

����������������������������������������������� 172 182 185
Special Inspector General for TARP

� ������������������������������������������������������ — 23 50

Alcohol and Tobacco Tax and Trade Bureau

����������������������������������������� 99 103 — Financial Crimes Enforcement Network

������������������������������������������������ 91 111 100
Community Development Financial Institutions Fund

��������������������������� 107 247 250

All other

������������������������������������������������������������������������������������������������� –92 — –62
Total, Discretionary budget authority

� ���������������������������������������������������������� 12,624 13,554 13,935

Memorandum:
Budget authority from American Recovery and Reinvestment Act

������������� 318 — —

Total, Discretionary outlays

������������������������������������������������������������������������� 12,224 13,278 13,738

Memorandum: Outlays from American Recovery and Reinvestment Act

��� 139 149 16

Mandatory Outlays:
Payment where tax credit exceeds liability for tax (multiple programs)

�� 78,604 71,821 59,438

GSE MBS and HFA Purchases

������������������������������������������������������������� –4,500 –9,879 —

### 116 DEPARTMENT OF THE TREASURY



### Department of the Treasury

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

GSE Preferred Stock Purchase Agreements and Dividends

���������������� 91,264 56,746 5,435
Troubled Asset Relief Program (TARP)

������������������������������������������������ 151,151 41,427 10,734

TARP Downward Reestimate of Subsidies

������������������������������������������� — –114,531 — Office of Financial Stability

�������������������������������������������������������������������� 90 443 309
Special Inspector General for TARP

� ����������������������������������������������������� 12 37 11

Internal Revenue Collections for Puerto Rico

��������������������������������������� 473 356 348
Legislative Proposal

������������������������������������������������������������������������� — 66 91
Terrorism Insurance Program

��������������������������������������������������������������� 2 104 236
Legislative proposal

������������������������������������������������������������������������� — — –26

All other

������������������������������������������������������������������������������������������������� –2,633 5,239 3,163
Total, Mandatory outlays

����������������������������������������������������������������������������� 314,463 51,763 79,674

Memorandum: Outlays from American Recovery and Reinvestment Act

��� 2,433 49,156 44,181

Total, Outlays

���������������������������������������������������������������������������������������������� 326,687 65,041 93,412

**Credit activity**

Direct Loan Disbursements:

GSE MBS and HFA Purchases

������������������������������������������������������������ 190,574 48,676 — Troubled Asset Relief Program

� ������������������������������������������������������������ 363,825 85,713 5,168

Total, Direct loan disbursements

����������������������������������������������������������������� 554,399 134,389 5,168

Guaranteed Loan Commitments:
Troubled Assets Relief Program

������������������������������������������������������������ 301,000 — — Total, Guaranteed loan commitments

��������������������������������������������������������� 301,000 — —

1 Excludes International Programs

.

### 117 Veterans earn an array of benefits and ser

vices through their dedicated service to America. The President’s Budget makes it easier for veter

ans to access the benefits and services they have earned, by investing in 21st Century technology and in improved services for veterans with spe

cialized needs.

Builds on the Historic Past Increase in Funding for VA. The Budget provides $57 billion in funding for a 20 percent total increase since 2009. This significant increase contributes to the President’s pledge to increase funding for the VA, providing a foundation to transform the Department and better serve veterans and their families today. Provides Advance Appropriations for

VA Medical Care. The 2011 Budget requests $50.6 billion in advance appropriations for the VA medical care program so that care for the Na

tion’s veterans is not hindered by budget delays. This funding will enable the Department to have timely and predictable funding from year to year, ultimately making it easier for veterans to rely

on accessible VA care.

Focuses on the Unique Needs of Women

Veterans. The 2011 President’s Budget re

sponds to the growing number of women veter

ans by providing for their unique needs, from an appropriate environment of care to specialized medical and counseling services. **Funding Highlights:**

• Builds on the historic past increase in funding for the Department of Veterans Affairs (VA), for a 20 percent total increase since 2009.

• Secures timely, sufficient, and predictable funding for health care services through 2012 with advance appropriations for VA Medical Care.

• Increases access to medical care services by focusing on the unique needs of women veterans and continuing the enrollment of over 500,000 previously ineligible veterans into VA health care by 2013.

• Supports timely and high-quality delivery of health care and benefits through 21st Century technology, including the Virtual Lifetime Electronic Record and benefits processing systems.

• Funds the Administration’s commitment to dramatically reduce veteran homelessness.

• Continues the emphasis on specialized care for veterans with psychological and cognitive health needs, especially due to post-traumatic stress and traumatic brain injury.

• Provides greater benefits to veterans who are medically retired from service.

• Dramatically expands access to national cemeteries for eligible veterans. 

# DEPARTMENT OF VETERANS AFFAIRS

### 118 DEPARTMENT OF VETERANS AFFAIRS

Continues to Increase Enrollment of Pre

viously Ineligible Veterans into VA Health

Care. The President’s Budget continues enroll

ing more than 500,000 moderate-income veter

ans into the VA health care system by 2013 while maintaining high-quality and timely care for the

lower-income and disabled veterans who current

ly rely on VA.

Supports Timely and High-Quality Delivery of Health Care and Benefits through 21st Century Technology. VA and the Department of Defense (DOD) are jointly implementing the Virtual Lifetime Electronic Record, which will enable VA to maintain a complete health record for each veteran and

to deliver care and benefits to veterans with efficiency and accuracy. The President’s Budget also invests over $200 million in automated processing to directly improve the accuracy and timeliness of veterans benefits, particularly disability compensation and the new Post-9/11

GI Bill benefit.

Works to Dramatically Reduce Veteran

Homelessness. With an investment of almost $800 million, the President’s Budget expands

VA’s services for homeless veterans and those at risk of becoming homeless through the expansion of collaborative partnerships with local governments, non-profit organizations, and the Departments of Housing and Urban Development, Justice, and Labor. Continues the Emphasis on Specialized Care for Veterans with Psychological and Cognitive Health Needs. The President’s Bud

get strengthens VA’s ability to provide veterans the best possible care for Post-Traumatic Stress, Traumatic Brain Injury, and other mental health conditions by investing $5.2 billion in special

ized care. These conditions will continue to be urgent issues for the VA for many years to come. The Budget increases collaboration between joint DOD and VA programs that target psychological health; increases research to develop new evi

dence-based approaches; and increases outreach

to veterans.

Provides Greater Benefits to Veterans who are Medically Retired from Service. For the first time, highly-disabled veterans who are medically retired from service will be eligible for concurrent receipt of disability benefits from

VA in addition to DOD retirement benefits. All medically retired servicemembers will be eligible for concurrent receipt of VA and DOD benefits by

2015.

Dramatically Expands Access to National Cemeteries for Eligible Veterans. VA will re

duce the population threshold used to determine

where new national veterans cemeteries should be built from 170,000 to 80,000 veterans living within 75 miles of a potential location. The lower threshold will provide a nearby national cemetery burial option to at least 500,000 additional veter

ans and will result in 94 percent of all veterans having a veterans cemetery burial option within

a reasonable distance of their homes.THE BUDGET FOR FISCAL YEAR 2011 

### 119

Department of Veterans Affairs (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority:

Medical Care

����������������������������������������������������������������������������������������������� 40,183 44,512 48,183
Medical Collections (non-add)

������������������������������������������������������������ 2,767 3,026 3,355
Total Medical Care including collections (non-add)

���������������������������� 42,950 47,538 51,538

Medical Care and Prosthetics Research

����������������������������������������������������� 510 581 590
Information Technology

������������������������������������������������������������������������������� 2,748 3,307 3,307

Construction

������������������������������������������������������������������������������������������������ 1,882 2,043 1,750

Veterans Benefits Administration

���������������������������������������������������������������� 1,461 1,689 2,149

General Administration

������������������������������������������������������������������������������� 336 398 463
Housing and Other Credit

��������������������������������������������������������������������������� 158 166 165
National Cemetery Administration

�������������������������������������������������������������� 230 250 251
Office of Inspector General

������������������������������������������������������������������������� 88 109 109
Total, Discretionary budget authority

� ���������������������������������������������������������������� 47,596 53,055 56,967

Memorandum:
Budget authority from American Recovery and Reinvestment Act

������������������� 1,408 — — Budget authority from supplementals

��������������������������������������������������������������� 198 — —

Total, Discretionary outlays

������������������������������������������������������������������������������� 46,580 51,516 55,224

Memorandum: Outlays from American Recovery and Reinvestment Act

��������� 86 590 465

Mandatory Outlays: Disability Compensation and Pensions:
Existing law

�������������������������������������������������������������������������������������������� 44,270 47,901 57,109
Supplemental

����������������������������������������������������������������������������������������� — 13,377 — Legislative proposal

������������������������������������������������������������������������������� — 531 44

Education Benefits

�������������������������������������������������������������������������������������� 3,155 8,444 9,704
Vocational Rehabilitation and Employment

������������������������������������������������� 720 787 830
Housing (credit)

������������������������������������������������������������������������������������������� 329 828 19

Insurance

���������������������������������������������������������������������������������������������������� 48 49 63

All other

������������������������������������������������������������������������������������������������������� –188 549 764
Total, Mandatory outlays

����������������������������������������������������������������������������������� 48,334 72,466 68,533

Memorandum: Outlays from American Recovery and Reinvestment Act

��������� 465 — —

Total, Outlays

���������������������������������������������������������������������������������������������������� 94,914 123,982 123,757

Credit activity

Direct Loan Disbursements:
Vendee and Acquired Loans

����������������������������������������������������������������������� 79 965 1,102

### 120 DEPARTMENT OF VETERANS AFFAIRS



### Department of Veterans Affairs

— Continued

(In millions of dollars)

Actual
2009 Estimate

2010 2011

All other programs

��������������������������������������������������������������������������������������� 22 15 12

Total, Direct loan disbursements

����������������������������������������������������������������������� 101 980 1,114

Guaranteed Loan Commitments:

Veterans Home Loans

�������������������������������������������������������������������������������� 67,849 58,286 53,570

### 121 The Army Corps of Engineers civil works pro

gram (Corps) develops, manages, and protects the Nation’s water resources through its studies of potential projects; its construction, operation and maintenance of projects; and its regulatory program. The Corps, working with other Federal agencies, also helps communities respond to and

recover from floods and other natural disasters. The Corps conducts much of its work in partner

ship with State and local governments and other

non-Federal entities.

Funds High-Return Construction Proj

ects. The Budget for the construction program supports high-return investments for ongoing

work in the three main mission areas of the Corps: commercial navigation; flood and storm damage reduction; and aquatic ecosystem resto

ration. The Budget also gives priority for fund

ing to dam safety work, projects that reduce sig

nificant risks to human safety, and projects that will complete construction during 2011.

Supports Capital Investment on the In

land Waterways. The Budget proposes to re

place the current excise tax on diesel fuel for the inland waterways with a new funding mecha

nism that raises the revenue needed to meet the

authorized non-Federal cost-share of inland wa

terways capital investments in a way that is more efficient and more equitable than the fuel tax. It will also preserve the landmark cost-sharing re

form established by the Congress in 1986, while supporting inland waterways construction, ex

pansion, replacement, and rehabilitation work.

Advances Aquatic Ecosystem Restora

tion. The Budget supports ongoing, high-per

forming ecosystem restoration efforts, including continued progress toward restoring the Florida **Funding Highlights:**

• Helps build infrastructure to support economic growth and restore aquatic ecosystems by allocating $1.7 billion to fund construction for projects that provide the highest economic and environmental return to the Nation while achieving public safety objectives.

• Emphasizes the safe and reliable operation and maintenance of key inland and coastal waterways and other infrastructure.

• Focuses resources on the restoration of significant aquatic ecosystems, such as the Everglades, the California Bay-Delta, and the Louisiana coastal wetlands.

• Begins to chart a new direction for the Corps to meet 21st Century water resources challenges, including reforming the procedures for planning future projects and eliminating funding for ongoing projects and activities that are ineffective or duplicative. 

# CORPS OF ENGINEERS —CIVIL WORKS

### 122 CORPS OF ENGINEERS —CIVIL WORKS

Everglades, the California Bay-Delta, and the Louisiana coast. Based on sound science, these and other aquatic ecosystem efforts supported in the Budget focus on those activities that cost ef

fectively provide high-quality, reliable, and sus

tainable long-term solutions that restore the en

vironmental integrity and sustainability of the affected ecosystems. The Corps will work with Federal interagency working groups led by the White House Council on Environmental Qual

ity to develop performance measures and tools to identify those restoration activities with the highest returns to taxpayers.

Emphasizes the Operation and Mainte

nance of Existing Infrastructure. The Budget focuses resources on furthering the operational reliability, safety, and availability of the key fea

tures of the existing Corps infrastructure. The Budget funds high-priority maintenance work that will improve the overall performance of the Corps aging infrastructure, including work on the Ohio, Upper Mississippi, and Illinois Waterway, and development of models to help the Corps un

derstand the impact of climate change on its proj

ects and how to adapt to those changes. Supports a New Direction for the Corps. The Budget supports Corps activities to plan and implement water resources projects that advance sustainable economic development and preserve and restore ecosystems. It also supports the Ad

ministration’s effort to revise the over 25-year old procedures for planning future Federal water resources projects and supports improving the management of existing projects to incorporate current water resources planning concepts and analytical methods. In addition, the Administra

tion intends to develop a set of broad principles to chart the future course of the Corps and to help guide authorization of Corps studies, proj

ects, and programs in the next Water Resources Development Act.

Eliminates Funding for Ineffective or Du

plicative Programs. The Budget eliminates funding for dozens of projects that have a low

economic or environmental return or that are du

plicative of programs in other agencies, including cutting $129 million for water and wastewater infrastructure projects that are better addressed through other Federal programs.THE BUDGET FOR FISCAL YEAR 2011 

### 123

Corps of Engineers

— Civil Works (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending
Discretionary Budget Authority:

Construction

������������������������������������������������������������������������������������������������ 2,080 2,029 1,690
Operation and Maintenance

������������������������������������������������������������������������ 2,202 2,400 2,361
Mississippi River and Tributaries

����������������������������������������������������������������� 384 340 240
Flood Control and Coastal Emergencies

���������������������������������������������������� — — 30
Investigations

���������������������������������������������������������������������������������������������� 168 162 104
Regulatory Program

������������������������������������������������������������������������������������ 183 190 193
Expenses

���������������������������������������������������������������������������������������������������� 179 185 185
Office of the Assistant Secretary of the Army (Civil Works)

������������������������ 5 5 6
Formerly Utilized Sites Remedial Action Program

�������������������������������������� 140 134 130
Subtotal, Discretionary budget authority

����������������������������������������������������������� 5,341 5,446 4,939
Cancellation of Unobligated Balances, Mississippi River and Tributaries

��� — — –58
Total, Discretionary budget authority

� ���������������������������������������������������������������� 5,341 5,446 4,881

Memorandum:
Budget authority from American Recovery and Reinvestment Act

������������������� 4,600

— — Budget authority from supplementals

��������������������������������������������������������������� 6,558

— — Total, Discretionary outlays

������������������������������������������������������������������������������� 6,777 7,566 5,951

Memorandum: Outlays from American Recovery and Reinvestment Act

��������� 346 2,965 976

Mandatory Outlays:
Existing law

������������������������������������������������������������������������������������������������� –261 38 35
Total, Mandatory outlays

����������������������������������������������������������������������������������� –261 38 35

Total, Outlays

���������������������������������������������������������������������������������������������������� 6,516 7,604 5,986

### 125 The Environmental Protection Agency (EPA) is committed to protecting human health and the environment. To achieve this mission, EPA col

laborates with States and Tribes to implement air, water, waste, and chemical programs. The Bud

get requests $10 billion for EPA, a substantially higher annual amount than requested under any previous Administration. This total expands the Administration’s 2010 increase to the Agency’s core operating budget, which provides funds for program implementation, priority research, en

hanced regulation, and comprehensive enforce

ment activities. EPA’s budget also provides more funding for State and tribal program implemen

tation grants than any previous budget.

Invests in Clean Water Infrastructure. The Budget requests $3.3 billion for the Clean Water and Drinking Water State Revolving Funds (SRFs). The Federal SRF funding pro

vides grants to States for low-interest loans to communities through a combination of Federal capitalization, State matches, State leverag

ing, interest, and loan repayments. Since loan interest and principal payments are returned to the program, the SRFs continue to generate funding for new loans even without continued Federal funding. The Federal contribution to

water and waste water infrastructure has been substantially incorporated into SRFs. These Funds, combined, now produce approximately $5 billion in repayments each year. As the Funds have grown, the need for Federal capitalization will decline over the next decade. Some ongoing

contribution will be maintained so the neediest communities are adequately served. **Funding Highlights:**

• Provides $3.3 billion total for the Clean Water and Drinking Water State Revolving Funds. This will allow States and Tribes to initiate approximately 800 clean water and 500 drinking water projects nationally, continuing a major Federal commitment to water infrastructure

investment.

• Provides new funding to support the Administration’s commitment to mitigate climate change.

• Continues support for collaborative, interagency ecosystem restoration efforts in the Great Lakes, Chesapeake Bay and Mississippi River Basin.

• Provides grants for States and Tribes to administer delegated environmental programs at $1.3 billion, the highest level ever.

• Funds the Agency’s operating budget at $3.8 billion to support regulatory, research, and

enforcement activities.

• Supports economic growth and job creation in hard hit regions by bolstering Brownfields cleanup. 

# ENVIRONMENTAL PROTECTION AGENCY

### 126 ENVIRONMENTAL PROTECTION AGENCY

For 2011, EPA proposes a new approach to helping small drinking water systems, as well as reforms to improve the long-term financial, man

agerial, and environmental sustainability of the SRFs. As part of that strategy, Federal dollars provided through the SRFs will act as a catalyst for efficient system-wide planning, improvements in technical, financial and managerial capacity, and the design, construction and on-going man

agement of sustainable water infrastructure.

Supports Efforts to Mitigate Climate Change. The President has called on the Con

gress to enact forward-looking energy legislation that would spur U.S. development of advanced, clean energy technologies to reduce our depen

dence on oil, strengthen our energy and national security, create new jobs, and restore America’s position as a global leader in efforts to mitigate climate change and address its worst consequenc

es. The Administration supports a comprehensive market-based climate change policy to reduce greenhouse gas emissions in the United States more than 80 percent below 2005 levels by 2050. The President also supports a near-term target in the range of a 17-percent reduction by 2020. The Budget includes $21 million, an increase of $4 million from 2010 enacted levels, to implement the Mandatory Greenhouse Gas Reporting Rule and ensure the availability of high quality emis

sions data that will serve as the basis for effective climate policy.

In order for EPA and States to quickly and effectively address climate change, the Bud

get requests $43 million in new funding for regulatory initiatives to control greenhouse gas emissions under existing Clean Air Act authorities. Requested funds include $25 mil

lion to aid States in permitting activities for greenhouse gas (GHG) emissions under the New Source Review, and Title V operating per

mits programs. The Budget also requests $7 million to develop New Source Performance

Standards to control GHG emissions from a few categories of major stationary sources. The Budget requests an increase of $6 mil

lion to support regulatory programs to reduce

GHG emissions from mobile sources. These initiatives will help the United States meet its target for emissions reductions.

Advances Restoration of Great Lakes and Other Imperiled Waters. The 2011 Budget supports ecosystem restoration efforts, includ

ing $300 million for the Great Lakes, the larg

est freshwater system in the world. This EPAled interagency effort to restore the Great Lakes focuses on priority environmental issues such as contaminated sediments and toxics, nonpoint source pollution, habitat degradation and loss, and invasive species.

The Budget also provides $17 million in new funding for the Mississippi River Basin and in

creases support for the Chesapeake Bay by $13 million. In the Mississippi River Basin, EPA will work with the Department of Agriculture to target nonpoint source reduction practices on agricultural land to reduce nutrient loadings. Funding for the Chesapeake Bay supports the President’s May 2009 Chesapeake Bay Protec

tion and Restoration Executive Order and will enable EPA to conduct robust regulatory, per

mitting, modeling, and reporting efforts. EPA and Federal partners will continue to coordinate with States, Tribes, municipalities, and industry to restore the integrity of imperiled waters of

the United States.

Assists States and Tribes Clean Air and

Water Efforts. For grants that support eligible States and Tribes that implement environmen

tal programs, the Budget requests $1.3 billion, a 14-percent increase from 2010 enacted and the highest level ever. In addition to the $25 million provided for States to conduct GHG permitting activities, the Budget recognizes State fiscal con

straints and provides substantial increases for select State and tribal programs, including a $45 million increase for State water pollution control grants and a $58 million increase for air quality management grants. The Budget includes $30 million for a new tribal multimedia grant pro

gram targeted at Tribes and tribal consortia that can implement environmental program require

ments on tribal lands.THE BUDGET FOR FISCAL YEAR 2011 

### 127

Promotes Economic Growth with Increased Funding for Brownfields Clean

up. Brownfields are lightly contaminated sites— many in economically hard-hit regions—that pol

lution may keep from being used productively. To stimulate economic growth and job creation

in economically distressed areas, the Budget provides a substantial increase for the Brown

fields program to integrate area-wide planning

and environmental remediation activities.



### Environmental Protection Agency (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority: Operating Budget 1

���������������������������������������������������������������������������������������� 3,281 3,940 3,843

State and Tribal Assistance Grants

�������������������������������������������������������������� 1,082 1,116 1,276
Clean Water State Revolving Fund

�������������������������������������������������������������� 689 2,100 2,000
Drinking Water State Revolving Fund

���������������������������������������������������������� 829 1,387 1,287
Brownfields Assessment and Cleanup

�������������������������������������������������������� 97 100 138

Clean Diesel Grants

������������������������������������������������������������������������������������� 75 80 60
Targeted Water Infrastructure

���������������������������������������������������������������������� 192 195 20
Requested (non-add)

������������������������������������������������������������������������������ 39 30 20
Unrequested (non-add)

��������������������������������������������������������������������������� 153 165 — Superfund

���������������������������������������������������������������������������������������������������� 1,285 1,307 1,293
Leaking Underground Storage Tanks

����������������������������������������������������������� 113 113 113
Cancellation of unobligated balances

���������������������������������������������������������� –10 –40 –10
Total, Discretionary budget authority

� ����������������������������������������������������������������� 7,633 10,298 10,020

Memorandum: Budget authority from American Recovery and Reinvestment Act

������ 7,220 — —

Total, Discretionary outlays

�������������������������������������������������������������������������������� 7,885 8,591 9,351

Memorandum: Outlays from American Recovery and Reinvestment Act

���������� 302 2,841 2,005

Mandatory Outlays:
Agency-wide
Existing law

��������������������������������������������������������������������������������������������� –117 –131 –129
Legislative proposals, Pesticide and PMN user fees

������������������������������� — — –50
Total, Mandatory outlays

������������������������������������������������������������������������������������ –117 –131 –179

Total, Outlays

��������������������������������������������������������������������������������������������������� 7,768 8,460 9,172

1 Includes funding for Great Lakes Initiative

.

### 129 The mission of the National Aeronautics and Space Administration (NASA) is to drive ad

vances in science, technology, and exploration to enhance knowledge, education, innovation, economic vitality, stewardship of the Earth, and solutions to national and global challenges. The President’s Budget will allow NASA to improve our knowledge of the Earth, explore space with humans and robots, foster strong partnerships with other nations, and educate and inspire the next generation of scientists and engineers. **Funding Highlights:**

• Adds $6 billion to NASA’s budget over five years and draws upon American ingenuity to enable us to embark on an ambitious 21st Century program of human space exploration.

• Initiates flagship exploration technology development and demonstration programs of “gamechanging” technologies that will increase the reach and reduce the costs of future human space exploration as well as other NASA, government, and commercial space activities.

• Embraces the commercial space industry and the thousands of new jobs that it can create by contracting with American companies to provide astronaut transportation to the Space Station—thus reducing the risk of relying exclusively on foreign crew transport capabilities.

• Ends NASA’s Constellation program, which was planning to use an approach similar to the Apollo program to return astronauts back to the Moon 50 years after that program’s triumphs. An independent panel found that Constellation was years behind schedule and would require large budget increases to land even a handful of astronauts back on the Moon before 2030. Instead, we are launching a bold new effort that invests in American ingenuity for developing more capable and innovative technologies for future space exploration.

• Extends the International Space Station and enhances its utilization, bringing nations together in a common pursuit of knowledge and excellence in space.

• Enhances the Nation’s global climate change research and monitoring system, including reflight of a satellite that will help identify global carbon sources and sinks.

• Provides for a robust program of robotic solar system exploration and new astronomical observatories, including a probe that will fly through the Sun’s atmosphere and an expanded effort to detect potentially hazardous asteroids.

• Revitalizes and realigns NASA to put in place the right workforce and facilities to function as an efficient 21st Century research and development agency. 

# NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION

### 130 NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

Lays the Foundation for a Bold New Course for Human Space Flight. NASA’s Constellation program—based largely on existing technologies—was begun to realize a vision of returning astronauts back to the Moon by 2020. However, the program was over budget, behind schedule, and lacking in innovation due to a failure to invest in critical new technologies. Using a broad range of criteria, an independent review panel determined that even if fully funded, NASA’s program to repeat many of the achievements of the Apollo era, 50 years later, was the least attractive approach to space exploration as compared to potential alternatives. Furthermore, NASA’s attempts to pursue its Moon goals had drawn funding away from other NASA programs, including robotic space exploration, science, and Earth observations. The President’s Budget cancels Constellation and replaces it with a bold new approach that invests in the building blocks of a more capable approach to space exploration that includes:

• Research and development to support future heavy-lift rocket systems that will increase the capability of future explora

tion architectures with significantly lower operations costs than current systems— potentially taking us farther and faster into space.

• A vigorous new technology development and test program that aims to increase the capabilities and reduce the cost of fu

ture exploration activities. NASA, work

ing with industry, will build, fly, and test in orbit key technologies such as automat

ed, autonomous rendezvous and docking, closed-loop life support systems, in-orbitpropellant transfer, and advanced inspace propulsion so that our future hu

man and robotic exploration missions are both highly capable and affordable.

• A steady stream of precursor robotic ex

ploration missions to scout locations and demonstrate technologies to increase the safety and capability of future human missions and provide scientific dividends. Develops and Deploys Technologies to Re

duce Future Space Mission Costs, Expand Opportunities, and Grow the American Economy. NASA will embark on a new agencywide technology development and test program aimed at increasing the capabilities and reduc

ing the cost of future NASA, other government, and commercial space activities. NASA will in

crease its support for transformative research that can enable a broad range of NASA missions. This program, which will involve work at NASA, in private industry, and at all levels of academia, will also generate spin-off technologies and po

tentially entire new industries.

Supports Extension and Enhanced Utili

zation of the Space Station . The International Space Station is poised to reach its full comple

ment of international crew and laboratories in 2010. The President’s Budget provides funds to extend operations of the Space Station past its previously planned retirement date of 2016. Working with partners around the world, NASA will maximize return on this investment by de

ploying new research facilities to conduct scien

tific research and test technologies in space and by making Space Station research capabilities

available to educators and new researchers. New capabilities could include a centrifuge to support research into human physiology, inflatable space habitats, and a program to continuously upgrade Space Station capabilities.

Supports Promising Commercial Space Transportation. Commercial launch vehicles have for years carried all U.S. military and com

mercial—and most NASA—satellites to orbit. The Budget funds NASA to contract with indus

try to provide astronaut transportation to the International Space Station as soon as possible, reducing the risk of relying solely on foreign crew transports for years to come. A strength

ened U.S. commercial space launch industry will bring needed competition, act as a catalyst for the development of other new businesses capitalizing on affordable access to space, help create thou

sands of new jobs, and help reduce the cost of human access to space.THE BUDGET FOR FISCAL YEAR 2011 

### 131

Commits Funds to Safely and Prudently Fly the Remaining Space Shuttle Flights. The President’s Budget promotes a safe and or

derly retirement of the Space Shuttle program by providing funding for the Shuttle to fly its fi

nal five missions, even if their schedule slips into

2011.

Improves Our Understanding of Global Climate Change. NASA’s Earth science pro

gram conducts first-of-a-kind demonstration flights of sensors in air and space in an effort to foster scientific understanding of the Earth sys

tem and to improve the ability to forecast cli

mate change and natural disasters. The Budget accelerates the development of new satellites

the National Researc h Council recommended as Earth science priorities. The Budget also sup

ports several research satellites currently in development, a campaign to monitor changes in polar ice sheets, and enhancements to climate models. In addition, the Budget provides funds for NASA to develop and fly a replacement for the Orbiting Carbon Observatory, a mission designed to identify global carbon sources and sinks that

was lost when its launch vehicle failed in 2009.

Increases Scientific Understanding of the Solar System and Universe. NASA’s space probes, rovers, and telescopes have revolution

ized humanity’s scientific understanding of the cosmos. The Budget supports space science re

search grants and dozens of operating missions and telescopes currently studying the planets and stars as well as many more in development— including a telescope to succeed the Hubble Space Telescope, missions to study the Moon, and two Mars exploration missions. The Budget also funds early work on a mission that will make the closest-ever approach to the Sun, flying through its outer atmosphere in an attempt to understand how it is heated and how it ejects the stream of charged particles known as the solar wind. In addition, the Budget increases funding to detect asteroids that could potentially pose a hazard to

the Earth.

Increases Support for Green Aviation and a More Efficient Air Transportation Sys

tem. The President’s Budget increases support for NASA’s green aviation initiative by focusing

on both innovative fundamental research and systems-level applications to reduce fuel needs, noise, and emissions of aircraft. These improve

ments to future air transportation will promote

both the economic and environmental health of this country.

Revitalizes and Realigns NASA. The Bud

get supports the revitalization of NASA to put in place the right workforce and facilities to function as an efficient 21st Century research and devel

opment agency. A major focus of this effort will be to create the 21st Century launch facilities and infrastructure needed at Kennedy Space Center, transforming the facility to more effectively sup

port future NASA, commercial, and other govern

ment launches.

Inspires More Young People to Engage in Science, Technology, Engineering, and

Mathematics. The Budget supports NASA pro

grams that are designed to meet the goals of the President’s “Educate to Innovate” campaign in Science, Technology, Engineering and Mathemat

ics education. NASA’s Summer of Innovation, for example, will work with thousands of middle school teachers and students to engage studentsin stimulating, evidence-based math and sciencebased education programs.

### 132 NATIONAL AERONAUTICS AND SPACE ADMINISTRATION



### National Aeronautics and Space Administration (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority:

Science

����������������������������������������������������������������������������������������������������� 4,503 4,469 5,006
Exploration

������������������������������������������������������������������������������������������������ 3,505 3,746 4,263
Aeronautics and Space Research and Technology

���������������������������������� 500 501 1,152
Space Operations

������������������������������������������������������������������������������������� 5,765 6,147 4,888

Education

�������������������������������������������������������������������������������������������������� 169 183 146
Cross Agency Support

������������������������������������������������������������������������������ 3,306 3,194 3,111
Construction and Environmental Compliance and Restoration

����������������� — 448 397
Inspector General

������������������������������������������������������������������������������������� 34 36 37
Total, Discretionary budget authority

� �������������������������������������������������������������� 17,782 18,724 19,000

Memorandum:

Budget authority from American Recovery and Reinvestment Act

����������������� 1,002 — —

Total, Discretionary outlays

����������������������������������������������������������������������������� 19,138 18,347 17,694

Memorandum: Outlays from American Recovery and Reinvestment Act

������� 37 790 183

Mandatory Outlays:
All Other General Funds and Proprietary Receipts

���������������������������������� –6 –15 –15
Undistributed Intragovernmental Payments and Receivables

������������������� –2 — — Science, Space, and Technology Education Trust Fund

��������������������������� 1 1 1

Total, Mandatory outlays

��������������������������������������������������������������������������������� –7 –14 –14

Total, Outlays

�������������������������������������������������������������������������������������������������� 19,131 18,333 17,680

### 133 The National Science Foundation (NSF) is the key Federal agency responsible for supporting

the full breadth of non-biomedical science and technology research at the Nation’s universities and colleges. This basic research and the agen

cy’s high-tech workforce development programs help drive future economic growth and the cre

ation of high-wage jobs for American workers. The Budget fully funds the President’s Plan for Science and Innovation by providing NSF with $552 million over the 2010 enacted level, and

maintains the Administration’s commitment to doubling funding for key basic research agencies.

Lays the Groundwork for the Industries

and Jobs of the Future. The Budget doubles funding to $90 million for basic research aimed at creating a future bio-economy by enhanc

ing our ability to design biological systems, and starting the next revolution in computing by designing new materials. The Budget also sup

ports advanced manufacturing technologies by funding research on nano-manufacturing and cyber-physical systems such as automated traf

fic control and zero-net energy buildings.

Inspires Students to Pursue Clean Energy

Careers. In partnership with the Department of Energy, NSF will dedicate at least 5 percent of its undergraduate and graduate fellowship, scholarship, and traineeship programs, roughly $19 million in 2011, to students pursuing clean

energy careers.

Increases Sustainability Research. The Budget provides $766 million, an increase of $105 million over comparable 2010 levels, for a new effort at NSF that represents a fundamen

**Funding Highlights:**

• Provides $7.4 billion for the National Science Foundation, an 8 percent increase over the 2010 enacted level, as part of the President’s Plan for Science and Innovation.

• Drives the creation of the industries and jobs of the future by doubling funding for multidisciplinary research targeted at next-generation information and biological technologies.

• Provides $19 million in graduate and undergraduate fellowships and scholarships for a joint initiative with the Department of Energy to inspire tens of thousands of American students to pursue careers in science, engineering, and entrepreneurship related to clean energy.

• Creates a new $766 million, cross-agency sustainability research effort focused on renewable energy technologies and complex environmental- and climate-system processes.

• Increases funding by 14 percent for a new consolidated program aimed at building the science and technology workforce by recruiting and retaining undergraduate students from under-represented groups. 

# NATIONAL SCIENCE FOUNDATION

### 134 NATIONAL SCIENCE FOUNDATION

tal shift in how the agency defines and supports multidisciplinary energy and climate research. This new cross-agency effort is an integrated ap

proach to increasing U.S. energy independence, enhancing environmental stewardship, reducing energy and carbon intensity, and generating sus

tained economic growth. Broadens Reach and Increases Funding to Promote Study of Science and Technology. The Budget proposes to launch a comprehensive science and technology workforce program to engage undergraduates at Historically Black, Tribal, and Hispanic-serving colleges and universities by realigning and building on existing programs. Funding for these activities would increase by over 14 percent to $103 million.



### National Science Foundation (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority:

Research and Related Activities

��������������������������������������������������������������� 5,183 5,564 6,019

Education and Human Resources

������������������������������������������������������������ 845 873 892
Major Research Equipment and Facilities Construction

��������������������������� 152 117 165
Agency Operations and Award Management

������������������������������������������� 294 300 329
Inspector General

������������������������������������������������������������������������������������� 4 5 5

National Science Board

���������������������������������������������������������������������������� 12 14 14
Total, Discretionary budget authority

� �������������������������������������������������������������� 6,490 6,873 7,424

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������������� 3,002 — — Total, Discretionary outlays

����������������������������������������������������������������������������� 5,834 6,149 6,653

Memorandum: Outlays from American Recovery and Reinvestment Act

������� 27 1,463 859

Mandatory Outlays:
H-B Fee Programs

������������������������������������������������������������������������������������ 96 165 137

All other

����������������������������������������������������������������������������������������������������� 1 42 -2
Total, Mandatory outlays

��������������������������������������������������������������������������������� 97 207 135

Total, Outlays

�������������������������������������������������������������������������������������������������� 5,931 6,356 6,788

### 135 The 2011 Budget provides $994 million for the Small Business Administration (SBA), a $170 million, or 21 percent, increase over the 2010

enacted level. This reflects the Administration’s strong support of small businesses, which play a vital role in the Nation’s economy.

Provides Small Business Access to Credit. The Budget provides $165 million in subsidy costs to support $17.5 billion in 7(a) loan guaran

tees that will help small businesses operate and expand. This includes an estimated $16 billion in term loans and $1.5 billion in revolving lines of credit; the latter are expected to support $39 billion in total economic activity through draws and repayments over the life of the guarantee. The Budget also supports $7.5 billion in guaran

teed lending for commercial real estate develop

ment and heavy machinery purchases; $3 billion in Small Business Investment Company deben

tures to support new businesses and new jobs through early-stage and mezzanine small busi

ness financing; and $25 million in direct Micro

loans, for intermediaries to provide small loans to emerging entrepreneurs and other promising

but “un-bankable” borrowers.

The Budget also includes the following legisla

tive proposals, to improve small business access to credit. It proposes to increase the maximum 7(a) loan size from $2 million to $5 million; to increase the maximum Certified Development Company (or “504”) loan size from $2 million to $5 million for regular projects and from $4 mil

lion to $5.5 million for manufacturing projects;

and to increase the maximum Microloan size to $50,000. The Budget also proposes to increase the maximum outstanding loan amount to Mi

croloan intermediaries in their first year of par

ticipation from $750,000 to $1 million, and from $3.5 million to $5 million in the subsequent

years. **Funding Highlights:**

• Supports $28 billion in loan guarantees to help small businesses access the credit they need to grow and create jobs.

• Provides competitive technical assistance grants to better support business development and regional economic growth.

• Provides long-term disaster recovery loans for homeowners, renters, and businesses of all

sizes.

• Strengthens lender and procurement program oversight to protect taxpayer dollars.

• Upgrades the Agency’s information technology systems and human capital resources to increase SBA’s impact on businesses and communities. 

# SMALL BUSINESS ADMINISTRATION

### 136 SMALL BUSINESS ADMINISTRATION

Supports Business Growth and Cluster Development . The Budget includes $14 million for competitive technical assistance grants

to expand SB A’s Emerging Leaders (formerly Emerging 200) initiative and to enhance small business participation in regional economic clusters. The Emerging Leaders initiative ($3 million) provides intensive technical assistance to companies that have high growth potential and are located in distressed economic areas, such as inner cities and Native American communities, and connects them to regional business networks to accelerate growth. SBA will also support enhanced small business participation in regional economic clusters ($11 million) by awarding competitive grants to facilitate greater coordination of resources (business counseling, training, mentor-protégé partnerships).

Funds Long-Term Disaster Recovery. The Budget supports $1.1 billion in direct loans, the normalized 10-year average, for homeowners and businesses whose property is damaged by natu

ral disasters. The Budget requests $203 million in new budget authority for disaster-loan admin

istrative expenses, an increase of $126 million

from the 2010 enacted level.

Strengthens Oversight to Protect Tax

payer Dollars. Due to the economic downturn and higher defaults on prior loans, SBA’s guar

anteed loan programs are recording a $4.5 bil

lion increase in losses and subsidy costs on its outstanding loan portfolio, particularly on those

made between 2005 and 2007. This reestimate increases the deficit in 2010. In addition, project

ed defaults and economic conditions have doubled

the estimated cost of new 7(a) loan guarantees for 2011 compared to 2010. The Budget provides funding for these increased costs in 2011, as not

ed above. However, to strengthen the program’s long-term economic foundation, the Administra

tion will submit a legislative package to provide SBA the flexibility to adjust fees in the program to enable it to be self-sustaining over time. These changes in the program’s fee structure would be

come effective for loans originated in 2012.

The Budget also provides additional resources to improve program management through en

hanced lender oversight and credit risk mitiga

tion activities, to promote prudent use of taxpayer dollars in SBA’s programs. In addition, an in

crease of $4 million is requested to improve SBA’s oversight of Government contracting programs ($2 million), including the HUBzone program, and to strengthen performance assessment and management of the Small Business Innovation Research program ($2 million), which provides small business opportunities through set-asides of over $2 billion annually in Federal research and development funding.

Strengthens Core Agency Capabilities. The Budget provides the resources needed to modernize SBA information technology systems, including migrating additional loan programs to a modern loan management and accounting sys

tem. The Budget also contains funds to continue SBA personnel training initiatives, to allow the agency to continue to make progress on improv

ing its human capital and customer relationships.THE BUDGET FOR FISCAL YEAR 2011 

### 137

Small Business Administration (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority: Salaries and Expenses

���������������������������������������������������������������������������������� 390 433 446

Business Loans:
Loan Subsidy

������������������������������������������������������������������������������������������� 2 83 169

Loan Administration

���������������������������������������������������������������������������������� 138 153 157
Subtotal, Business Loans

������������������������������������������������������������������������������ 140 236 326

Disaster Loans:
Loan Subsidy

������������������������������������������������������������������������������������������� — 2

— Loan Administration

���������������������������������������������������������������������������������� — 77 203
Subtotal, Disaster Loans

�������������������������������������������������������������������������������� — 79 203
Office of the Inspector General

���������������������������������������������������������������������� 17 16 18
Surety Bond Revolving Fund

������������������������������������������������������������������������� 2 1 1
Unrequested Projects

������������������������������������������������������������������������������������ 66 59

— Subtotal, Gross Discretionary budget authority

����������������������������������������������������� 615 824 994
Negative subsidy receipts

������������������������������������������������������������������������������� — – 2 –1

Total, Net Discretionary budget authority

��������������������������������������������������������������� 615 822 993

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������������������� 730

— — Budget authority from supplementals

������������������������������������������������������������������� — 125

—

Total, Discretionary outlays

����������������������������������������������������������������������������������� 924 916 1,233

Memorandum: Outlays from American Recovery and Reinvestment Act

������������� 119 380 160

Mandatory Outlays:
Business Loan Subsidy Reestimates

������������������������������������������������������������� 1,051 4,475 N/A
Disaster Loan Subsidy Reestimates

�������������������������������������������������������������� 159 211 N/A
Liquidating Credit Accounts

��������������������������������������������������������������������������� –7 –4 –5
Total, Mandatory outlays

��������������������������������������������������������������������������������������� 1,203 4,682 –5

Total, Outlays

�������������������������������������������������������������������������������������������������������� 2,127 5,598 1,228

Credit activity

Direct Loan Disbursements:

Direct Disaster Loans

������������������������������������������������������������������������������������� 727 738 738

Direct Business Loans

����������������������������������������������������������������������������������� 24 400 450

Total, Direct loan disbursements

��������������������������������������������������������������������������� 751 1,138 1,188

### 138 SMALL BUSINESS ADMINISTRATION



### Small Business Administration

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Guaranteed Loan Commitments:

Guaranteed Business Loans

�������������������������������������������������������������������������� 12,116 22,803 23,900

Guaranteed Disaster Loans

��������������������������������������������������������������������������� — 75

— Total, Guaranteed loan commitments

������������������������������������������������������������������� 12,116 22,878 23,900

### 139 **Funding Highlights:**

• Provides $12.5 billion for the Social Security Administration, an 8 percent increase, targeted at reducing backlogs and improving service for the American public.

• Expands program integrity efforts to make sure payments are made to the right person and in the right amount.

• Restructures Federal Wage Reporting. 

# SOCIAL SECURITY ADMINISTRATION

The President believes that all Americans should be able to retire with dignity. He is com

mitted to protecting Social Security and working in a bipartisan manner to preserve its original purpose as a reliable source of income for Ameri

can seniors. The Social Security Administration (SSA) administers the Old Age, Survivors, and Disability Insurance program and the Supple

mental Security Income (SSI) program. In 2009,

more than 51 million retired or disabled work

ers, survivors, and their families received over $659 billion in benefit payments. Nearly 8 mil

lion Americans received SSI benefits totaling $49 billion.

Protects Social Security. The President recognizes that Social Security is indispensable to workers, people with disabilities, seniors, and survivors and is probably the most important and most successful program that our country

has ever established. Based on current fore

casts, Social Security can pay full benefits until 2037. The President is committed to making sure that Social Security is solvent and viable for the American people, now and in the future. He is strongly opposed to privatizing Social Security and looks forward to working in a bipartisan way to preserve it for future generations.

Provides an 8 Percent Funding Increase

to Provide Services Faster and Reduce Backlogs. This year, SSA will process almost 5 million retirement, survivor, and Medicare claims; 3.3 million disability claims; and over 326,000 Supplemental Security Income (SSI) aged claims. The Budget proposes $12.5 billion for SSA, an increase of $930 million, or (8 per

cent), above the 2010 enacted level of $11.6 bil

lion. This amount includes resources to increase staffing in 2011 and will allow SSA to provide services faster with a focus on key service deliv

ery areas, such as processing initial retirement and disability claims, and disability appeals. At the end of 2010, the initial disability claims backlog is expected to reach record highs with over one million people waiting for a decision. This is unacceptable. The 2011 Budget funds SSA to lower the backlog below one million by processing over three million claims. The Bud

get also allows SSA to continue to reduce the appeals hearing backlog. By hearing approxi

mately 799,000 cases in 2011, the backlog will

### 140 SOCIAL SECURITY ADMINISTRATION

fall to 657,000 hearings pending. In addition, the Budget also includes resources to enable SSA to more effectively and efficiently verify hundreds of millions of Social Security Numbers and issue

about 19 million Social Security cards.

Increases Significantly Program Integrity

Efforts. SSA’s program integrity efforts are part of a strong framework for making sure the Government is spending tax dollars efficiently and that benefits are paid only to those beneficiaries who are eligible and are paid in correct amounts. The President’s 2011 Budget provides $796 million for SSA program integrity, including an over 9 percent increase in the level of medical Continuing Disability Reviews over the prior year. Continuing Disability Reviews make sure that Disability Insurance and SSI recipients

continue to the meet the medical criteria for those

programs.

Restructures the Federal Wage Reporting

Process . The President’s 2011 Budget proposes to restructure the Federal wage reporting process by reverting to quarterly wage reporting. Cur

rently, wages are reported to the Federal Govern

ment once a year. Increasing the timeliness of wage reporting would enhance tax administra

tion, improve program integrity for a range of programs, and facilitate implementation of auto

matic workplace pensions. The Administration

will work with the States so that the overall re

porting burden on employers is not increased.



### Social Security Administration (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending
Discretionary Budget Authority:
Limitation on Administrative Expenses (LAE) Base 1, 2

���������������������� 10,285 11,281 12,195
Office of Inspector General

����������������������������������������������������������� 100 103 106
Research and Development

���������������������������������������������������������� 28 42 36
Total, Discretionary budget authority

� ������������������������������������������������������� 10,413 11,426 12,338

Memorandum:
Budget authority from American Recovery and Reinvestment Act

���������� 1,092

— —

Total, Discretionary outlays

���������������������������������������������������������������������� 10,163 11,124 12,142

Memorandum: Outlays from American Recovery and Reinvestment Act

��� 165 389 31

Mandatory Outlays: Old-age, Survivors, and Disability Insurance

������������������������������������� 664,732 702,582 729,523
Supplemental Security Income

���������������������������������������������������������� 44,906 47,478 52,761
Special Benefits for Certain World War II Veterans

���������������������������� 9 9 8
Offseting collections

��������������������������������������������������������������������������� –24,452 –28,006 –30,285
Legislative proposals

������������������������������������������������������������������������� — 12,543 569

All other

���������������������������������������������������������������������������������������������� 20,838 24,440 26,889
Total, Mandatory outlays

�������������������������������������������������������������������������� 706,033 759,046 779,465THE BUDGET FOR FISCAL YEAR 2011 

### 141

Social Security Administration

— Continued (In millions of dollars)

Actual
2009 Estimate

2010 2011

Memorandum: Outlays from American Recovery and Reinvestment Act

��� 13,079 300 45

Total, Outlays

�������������������������������������������������������������������������������������������� 716,173 770,379 791,681

1 The LAE account includes funding from the Hospital Insurance and Supplementary Medical Insurance trust funds for services that support the Medicare program, including implementation of Medicare Reform

. 2 This amount reflects offsetting collections from SSI State Supplemental Fees

.

### 143 **Funding Highlights:**

• Expands AmeriCorps, the national service program, to a record-level 105,000 members from 85,000 members, providing more opportunities for all Americans to serve their communities.

• Fosters the replication of innovative, proven and transformative evidence-based programs through the Social Innovation Fund.

• Strengthens the Corporation’s management and information technology infrastructure to meet the President’s vision and support the growth and excellence in its programs. 

# CORPORATION FOR NATIONAL
AND COMMUNITY SERVICE

The President believes that service is ce ntral to addressing our Nation’s greatest challenges. The Corporation for National and Commu

nity Service (CNCS) provides an on-ramp for Americans of all ages to serve their community and country in sustained and effective ways throughout their lives, from tutoring at -risk youth to responding to natural disasters to building the capacity of community organiza

tions. The President also believes that many of the best solutions to America’s challenges can be found outside of Washington, in communities across the country. That is why the President’s Budget proposes $1.416 billion for CNCS, an increase of $266 million from 2010, providing more Americans the opportunity to serve and fostering community innovation.

Expands National Service. In April 2009, the President signed the Edward M. Kennedy Serve America Act, which authorized an unprecedented expansion of the AmeriCorps program to 250,000 members by 2017. This Budget keeps the program on that trajectory by funding over 105,000 members in 2011, an increase of 20,000 from 2010. The increase for AmeriCorps includes additional funds for the National Civilian Community Corps program, a full-time, team-based, residential program with

a focus on disaster relief.

Invests in Innovative Non-Profits. Innovators often come up with great ideas for addressing critical national challenges, but too often they lack the capital to develop, evaluate, and replicate successful approaches. The Budget invests $60 million in the Social Innovation Fund to test promising new approaches to major challenges, leverage private and foundation capital to meet these needs, and grow evidence-based programs.

Strengthens the Management Capacity of the Corporation. The success of the Corpo

ration’s programs and growth requires an invest

ment in its management, so the Budget provides resources to strengthen the Corporation’s capac

ity to meet the President’s vision and manage its growing portfolio. In addition to staffing, the Budget supports targeted enhancements to the agency’s information technology (IT) infrastruc

ture. These IT improvements are critical to the effective performance of nearly every aspect of

### 144 CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

the Corporation’s business. The Budget likewise invests in the Corporation’s capacity to measure its performance, evaluate its programs, and make

data-driven decisions.



### Corporation for National and Community Service (In millions of dollars)

Actual
2009 Estimate

2010 2011

Spending

Discretionary Budget Authority: Operating Expenses

��������������������������������������������������������������������������������� 812 1,054 1,298
AmeriCorps (non-add)

������������������������������������������������������������������������� 526 698 914
Learn and Serve America (non-add)

���������������������������������������������������� 37 40 40
Senior Corps (non-add)

����������������������������������������������������������������������� 214 221 221
Social Innovation Fund (non-add)

�������������������������������������������������������� — 50 60
Salaries and Expenses

���������������������������������������������������������������������������� 72 88 109
Office of the Inspector General

����������������������������������������������������������������� 7 8 9
Total, Discretionary budget authority

� �������������������������������������������������������������� 891 1,150 1,416

Memorandum:
Budget authority from American Recovery and Reinvestment Act

����������������� 201 — —

Total, Discretionary outlays

����������������������������������������������������������������������������� 860 732 945

Memorandum: Outlays from American Recovery and Reinvestment Act

������� 56 50 26

Mandatory Outlays:
Interest, National Service Trust

����������������������������������������������������������������� — 30 22
Total, Mandatory outlays

��������������������������������������������������������������������������������� — 30 22

Total, Outlays

�������������������������������������������������������������������������������������������������� 859 762 967145 

# SUMMARY TABLES

### 146 SUMMARY TABLESTable S–1.Budget Totals(In billions of dollars)200920102011201220132014201520162017201820192020Totals2011-20152011-2020Budget (Without Fiscal Commission)Budget Totals in Billions of Dollars:Receipts����������������������������������������������������������2,1052,1652,5672,9263,1883,4553,6343,8874,0944,2994,5074,71015,77137,268Outlays�����������������������������������������������������������3,5183,7213,8343,7553,9154,1614,3864,6654,8725,0845,4155,71320,05145,800Deficit�������������������������������������������������������1,4131,5561,2678287277067527787787859081,0034,2808,532Debt held by the public����������������������������������7,5459,29810,49811,47212,32613,13913,98814,83315,68616,53517,50218,573Debt net of financial assets���������������������������6,6478,1649,41810,24610,97211,67712,42813,20513,98314,76715,67516,677Gross domestic product (GDP)���������������������������14,23714,62415,29916,20317,18218,19319,19020,16321,13622,08723,06524,067Budget Totals as a Percent of GDP:Receipts����������������������������������������������������������14.8%14.8%16.8%18.1%18.6%19.0%18.9%19.3%19.4%19.5%19.5%19.6%18.3%18.9%Outlays�����������������������������������������������������������24.7%25.4%25.1%23.2%22.8%22.9%22.9%23.1%23.1%23.0%23.5%23.7%23.3%23.3%Deficit�������������������������������������������������������9.9%10.6%8.3%5.1%4.2%3.9%3.9%3.9%3.7%3.6%3.9%4.2%5.1%4.5%Debt held by the public����������������������������������53.0%63.6%68.6%70.8%71.7%72.2%72.9%73.6%74.2%74.9%75.9%77.2%Debt net of financial assets���������������������������46.7%55.8%61.6%63.2%63.9%64.2%64.8%65.5%66.2%66.9%68.0%69.3%FISCAL COMMISSIONThe Administration supports the creation of a Fiscal Commission.TheFiscal Com-mission is charged with identifying policies to improve the fiscal situation in themedium term and to achieve fiscal sustainability over the long run.Specifically,the Commission is charged with balancing the budget excluding interest paymentson the debt by 2015.The resultis projected to stabilize the debt-to-GDP ratio at anacceptable level once the economy recovers.Themagnitude and timing of the policymeasures necessary to achieve this goal are subject to considerable uncertainty andwill depend on the evolution of the economy.Inaddition, the Commission will ex-amine policies to meaningfully improve the long-run fiscal outlook, including chang-es to address the growth of entitlement spending and the gap between the projectedrevenues and expenditures of the Federal Government.THE BUDGET FOR FISCAL YEAR 2011 

### 147Table S–2.Effect of Budget Proposals on Projected Deficits(Deficit increases (+) or decreases (–) in billions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Projected deficits in the baseline projection ofcurrent policy1...........................................................1,4301,1459349409349831,0131,0421,0771,2271,3464,93610,640Percent of GDP�������������������������������������������������������������9.8%7.5%5.8%5.5%5.1%5.1%5.0%4.9%4.9%5.3%5.6%5.8%5.5%Temporary recovery measures:Tax cuts�������������������������������������������������������������������������295320–7–5–4–3–2–2–1–15747Mandatory proposals���������������������������������������������������45441*...................................4646Allowance for other jobs initiatives�����������������������������24501664..............................7676Total, temporary recovery measures�������������������9814737–1–1–4–3–2–2–1–1179169Allowance for health reform2�������������������������������������������6–23–34–39–28–3122–6–12–20–127–150Allowance for climate policy3�������������������������������������������Tax cuts for families and businesses4,5���������������������������1229312324252728303235133284Other revenue changes and loophole closers4,6�������������–1–36–66–74–77–78–79–81–83–86–90–331–749Proposed changes in mandatory programs and userfees7������������������������������������������������������������������������������2–2424–2–4–6–7–7–66–24Proposed changes in appropriated (“discretionary”)programs:Overseas contingency operations (OCO)��������������������937–41–75–83–87–91–93–95–98–101–250–728Security (except OCO)�������������������������������������������������212182326303234353637109284Non-security����������������������������������������������������������������*–10–15–24–27–29–29–30–31–30–25–105–249Subtotal, appropriated programs������������������������1139–38–76–84–86–88–89–91–92–88–245–693Subtotal, policy proposals.....................................127154–67–164–161–147–135–148–158–166–170–386–1,164Upper-income tax provisions dedicated to deficitreduction....................................................................–1–34–41–50–60–68–74–80–85–91–97–252–678Credit and other indirect interest effects�����������������������-*–2–2-*1222333–113Debt service����������������������������������������������������������������������*251–8–18–28–39–51–64–79–17–279Total reduction in projected deficits..................125121–105–213–228–231–235–264–292–319–343–656–2,108Resulting deficits in 2011 Budget.............................1,5561,2678287277067527787787859081,0034,2808,532Percent of GDP�������������������������������������������������������������10.6%8.3%5.1%4.2%3.9%3.9%3.9%3.7%3.6%3.9%4.2%5.1%4.5%

### 148 SUMMARY TABLESTable S–2.Effect of Budget Proposals on Projected Deficits—Continued(Deficit increases (+) or decreases (–) in billions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Memorandum, proposed changes in appropriated(“discretionary”) budgetary resources:Overseas contingency operations�������������������������������3328–84–86–88–90–93–95–98–101–103–320–810Security (except OCO)�������������������������������������������������816273033373839394041144341Non-security����������������������������������������������������������������.....–14–19–31–29–27–32–34–34–32–25–120–278Total, appropriated funding���������������������������������4130–75–86–85–80–87–91–93–93–87–296–747Memorandum, deficit reduction exclusive of OCOproposals and related debt service������������������������������11784–65–136–140–135–131–153–173–192–208–391–1,249Note: Figures displayed in the table do not reflect the impact of any recommendations from the Fiscal Commission.* $500 million or less.1See tables S–3 and S–7 for information on the baseline projection of current policy.2Allowance for pending health reform legislation.See Table S–8 for further detail.3A comprehensive market-based climate change policy will be deficit neutral because proceeds from emissions allowances will be used to compensate vulnerable families,communities, and businesses during the transition to a clean energy economy.Receipts will also be reserved for investments to reduce greenhouse gas emissions,including support of clean energy technologies, and in adapting to the impacts of climate change, both domestically and in developing countries.4Includes refundable tax credits.5Includes the effects of continuing certain expiring provisions through calendar year 2011.6Includes limiting itemized deductions, trade initiatives, and other tax initiatives on Table S–8.7Includes PAYGO impact of changes in mandatory programs included in appropriations language.THE BUDGET FOR FISCAL YEAR 2011 

### 149Table S–3.Baseline Projection of Current Policy by Category1(In billions of dollars)200920102011201220132014201520162017201820192020Totals2011–20152011–2020Outlays:Appropriated (“discretionary”) programs:Security���������������������������������������������������������7828448468508638829039219449689931,0194,3449,187Non-security�������������������������������������������������4375535304904804844935045165285415542,4775,120Subtotal, appropriated programs�����������1,2191,3971,3761,3401,3431,3671,3961,4251,4601,4961,5341,5736,82114,307Mandatory programs:Social Security����������������������������������������������6787037307628018468949471,0041,0671,1331,2044,0339,388Medicare�������������������������������������������������������4254514925025576256547277607958869572,8306,955Medicaid��������������������������������������������������������2512752712742933133373633904204534881,4883,602Troubled Asset Relief Program (TARP)2����151–7311107631**..........3739Other mandatory programs�������������������������6077015965325325265255425435425886062,7105,532Subtotal, mandatory programs��������������2,1122,0572,1002,0792,1912,3162,4132,5792,6982,8233,0603,25611,09825,515Net interest���������������������������������������������������������1871882503404345165866527167798449122,1266,029Disaster costs3����������������������������������������������������.....134445555552146Total outlays�������������������������������������������������3,5183,6433,7283,7623,9734,2034,4004,6614,8795,1035,4435,74620,06645,897Receipts:Individual income taxes��������������������������������������9159511,1261,2711,3871,5071,6251,7391,8531,9662,0782,1866,91716,739Corporation income taxes�����������������������������������1381762933333614153834224374494614781,7854,031Social insurance and retirement receipts:Social Security payroll taxes�����������������������6546356747207648108549089499941,0381,0773,8238,788Medicare payroll taxes���������������������������������1911801922082222362502662782923053171,1082,566Unemployment insurance����������������������������385160667175777776747475349725Other retirement������������������������������������������89899999999104389Excise taxes���������������������������������������������������������627480838486878889899091419867Estate and gift taxes�������������������������������������������231724212224252729323436116274Customs duties����������������������������������������������������222429333638404345485053175413Deposits of earnings, Federal Reserve System��347779675952485052555759305578Other miscellaneous receipts�����������������������������18181818181819191919202091188Total receipts������������������������������������������������2,1052,2132,5832,8293,0333,2693,4173,6483,8384,0264,2154,40015,13035,257Deficit......................................................................1,4131,4301,1459349409349831,0131,0421,0771,2271,3464,93610,640On-budget deficit�������������������������������������������������1,5501,5081,2411,0541,0741,0801,1391,1831,2091,2431,3851,4865,58912,094Off-budget surplus (–)�����������������������������������������–137–78–96–120–135–147–156–170–168–166–157–140–653–1,454

### 150 SUMMARY TABLESTable S–3.Baseline Projection of Current Policy by Category1 —Continued(In billions of dollars)200920102011201220132014201520162017201820192020Totals2011–20152011–2020Memorandum, funding (“budgetary resources”) forappropriated programs:Security����������������������������������������������������������������8248148348548748959179399639881,0131,0404,3749,318Non-security��������������������������������������������������������6894474564654774884995115235365495632,3855,067Total, appropriated funding�������������������������1,5131,2601,2901,3191,3511,3831,4161,4501,4861,5241,5621,6026,76014,385* $500 million or less.1See Table S–7 for information on adjustments to the Budget Enforcement Act (BEA) baseline.2Outlays for TARP in 2011 and subsequent years result from obligations for the Home Affordable Modification Program, and other estimated TARP obligations incurredthrough October 3, 2010.3These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction.Such assistance might be provided in the form ofdiscretionary or mandatory outlays or tax relief.These amounts are included as outlays for convenience.THE BUDGET FOR FISCAL YEAR 2011 

### 151Table S–4.Proposed Budget by Category(In billions of dollars)200920102011201220132014201520162017201820192020Totals2011–20152011–2020Outlays:Appropriated (“discretionary”) programs:Security����������������������������������������������������������7828558958278118258458628859079319554,2038,743Non-security��������������������������������������������������4375535204754564574654754864975115292,3734,871Subtotal, appropriated programs������������1,2191,4081,4151,3011,2671,2831,3101,3371,3711,4051,4421,4846,57613,614Mandatory programs:Social Security�����������������������������������������������6787157307628018458939451,0021,0641,1301,2014,0309,373Medicare��������������������������������������������������������4254514915015566236527247577918819532,8226,927Medicaid���������������������������������������������������������2512752972742923133363623894194514871,5123,619Troubled Asset Relief Program (TARP)1�����151–7311107631**..........3739Allowance for jobs initiatives������������������������.....1225832..............................3838Allowance for health reform2������������������������.....6–7–172307210110010010410680590Other mandatory programs��������������������������6077376195705475465445635675686166372,8265,775Subtotal, mandatory programs���������������2,1122,1232,1652,1072,2082,3642,5002,6962,8152,9423,1823,38411,34426,363Net interest�����������������������������������������������������������1871882513434365105716276817337868402,1105,777Disaster costs3�������������������������������������������������������.....134445555552146Total outlays��������������������������������������������������3,5183,7213,8343,7553,9154,1614,3864,6654,8725,0845,4155,71320,05145,800Receipts:Individual income taxes����������������������������������������9159361,1211,3261,4681,6041,7331,8561,9802,1022,2232,3387,25317,752Corporation income taxes�������������������������������������1381572973663934454114494634734865021,9134,285Social insurance and retirement receipts:Social Security payroll taxes������������������������6546356747207668098569119541,0001,0441,0843,8258,819Medicare payroll taxes����������������������������������1911801922082232372512672802933073181,1122,578Unemployment insurance�����������������������������385160677377797978777677357743Other retirement�������������������������������������������89899999999104389Excise taxes�����������������������������������������������������������627374818587888990909192415867Estate and gift taxes���������������������������������������������231725232426283032353740124298Customs duties������������������������������������������������������222427323537394244474952170404Deposits of earnings, Federal Reserve System����347779675952485052555759305578Allowance for jobs initiatives�������������������������������.....–12–25–8–3–2..............................–38–38Allowance for health reform2�������������������������������..........16183958748693101110119204712Other miscellaneous receipts�������������������������������18181717171818181819191987180Total receipts�������������������������������������������������2,1052,1652,5672,9263,1883,4553,6343,8874,0944,2994,5074,71015,77137,268Deficit.......................................................................1,4131,5561,2678287277067527787787859081,0034,2808,532

### 152 SUMMARY TABLESTable S–4.Proposed Budget by Category—Continued(In billions of dollars)200920102011201220132014201520162017201820192020Totals2011–20152011–2020On-budget deficit���������������������������������������������������1,5501,6341,3639498638529109529529591,0751,1534,93710,028Off-budget surplus (–)�������������������������������������������–137–78–96–120–136–146–158–175–174–174–167–151–656–1,496Primary deficit������������������������������������������������������1,2261,3681,01648629119618115197521231632,1702,755Net interest�����������������������������������������������������������1871882513434365105716276817337868402,1105,777Memorandum, funding (“budgetary resources”) forappropriated programs:Security������������������������������������������������������������������8248558797988198408648859069299539784,1988,849Non-security����������������������������������������������������������6894474414464464594724794895025175382,2654,789Total, appropriated funding��������������������������1,5131,3021,3201,2441,2651,2991,3361,3631,3951,4311,4701,5156,46413,638Note: Figures displayed in the table do not reflect the impact of any recommendations from the Fiscal Commission.* $500 million or less.1Outlays for TARP in 2011 and subsequent years result from obligations for the Home Affordable Modification Programs, and other estimated TARP obligations incurredthrough October 3, 2010.2Reflects on-budget effects only.See Table S–8 for further detail.3These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction.Such assistance might be provided in the form ofdiscretionary or mandatory outlays or tax relief.These amounts are included as outlays for convenience.THE BUDGET FOR FISCAL YEAR 2011 

### 153**Policy Outlays by Category Other Mandatory** **Programs and Disaster Costs** **Net Interest Security Discretionary** **Non-Security Discretionary** **Social Security Medicare** **Medicaid Policy Revenues by Source** **Borrowing and Other Net** **Financing Social** **Security Payroll Taxes** **Excise Taxes Corporation** **Income Taxes Unemployment** **Insurance Medicare** **Payroll Taxes** **Individual Income Taxes** **Other Receipts 2011** **2011 2015** **2015 Borrowing and Other Net** **Financing Social** **Security Payroll Taxes** **Excise Taxes Corporation** **Income Taxes Unemployment** **Insurance Medicare Payroll** **Taxes Individual** **Income Taxes Other Receipts** **Security Discretionary Non-Security** **Discretionary Social** **Security Medicare** **Medicaid Net Interest** **Other Mandatory Programs and** **Disaster Costs**

### 154 SUMMARY TABLESTable S–5.Proposed Budget by Category as a Percent of GDP(As a percent of GDP)200920102011201220132014201520162017201820192020Averages2011–20152011-2020Outlays:Appropriated (“discretionary”) programs:Security�������������������������������������������������������������5.55.85.85.14.74.54.44.34.24.14.04.04.94.5Non-security����������������������������������������������������3.13.83.42.92.72.52.42.42.32.32.22.22.82.5Subtotal, appropriated programs���������������8.69.69.28.07.47.16.86.66.56.46.36.27.77.0Mandatory programs:Social Security��������������������������������������������������4.84.94.84.74.74.64.74.74.74.84.95.04.74.8Medicare�����������������������������������������������������������3.03.13.23.13.23.43.43.63.63.63.84.03.33.5Medicaid������������������������������������������������������������1.81.91.91.71.71.71.81.81.81.92.02.01.81.8Troubled Asset Relief Program (TARP)1����������1.1–0.50.10.1******..........**Allowance for jobs initatives����������������������������.....0.10.2***..............................**Allowance for health reform2����������������������������.....*–*–0.1*0.20.40.50.50.50.40.40.10.3Other mandatory programs�����������������������������4.35.04.03.53.23.02.82.82.72.62.72.63.33.0Subtotal, mandatory programs������������������14.814.514.213.012.913.013.013.413.313.313.814.113.213.4Net interest�������������������������������������������������������������1.31.31.62.12.52.83.03.13.23.33.43.52.42.9Disaster costs3����������������������������������������������������������.....*************Total outlays�����������������������������������������������������24.725.425.123.222.822.922.923.123.123.023.523.723.323.3Receipts:Individual income taxes������������������������������������������6.46.47.38.28.58.89.09.29.49.59.69.78.48.9Corporation income taxes���������������������������������������1.01.11.92.32.32.42.12.22.22.12.12.12.22.2Social insurance and retirement receipts:Social Security payroll taxes��������������������������4.64.34.44.44.54.44.54.54.54.54.54.54.44.5Medicare payroll taxes������������������������������������1.31.21.31.31.31.31.31.31.31.31.31.31.31.3Unemployment insurance��������������������������������0.30.40.40.40.40.40.40.40.40.30.30.30.40.4Other retirement����������������������������������������������0.10.10.10.1********0.1*Excise taxes�������������������������������������������������������������0.40.50.50.50.50.50.50.40.40.40.40.40.50.4Estate and gift taxes�����������������������������������������������0.20.10.20.10.10.10.10.10.20.20.20.20.10.2Customs duties��������������������������������������������������������0.20.20.20.20.20.20.20.20.20.20.20.20.20.2Deposits of earnings, Federal Reserve System������0.20.50.50.40.30.30.20.20.20.20.20.20.40.3Allowance for jobs initatives�����������������������������������.....–0.1–0.2-*-*-*..............................–*–*Allowance for health reform�����������������������������������..........0.10.10.20.30.40.40.40.50.50.50.20.3Other miscellaneous receipts���������������������������������0.10.10.10.10.10.10.10.10.10.10.10.10.10.1Total receipts����������������������������������������������������14.814.816.818.118.619.018.919.319.419.519.519.618.318.9Deficit..........................................................................9.910.68.35.14.23.93.93.93.73.63.94.25.14.5THE BUDGET FOR FISCAL YEAR 2011 

### 155Table S–5.Proposed Budget by Category as a Percent of GDP—Continued(As a percent of GDP)200920102011201220132014201520162017201820192020Averages2011–20152011-2020On-budget deficit�����������������������������������������������������10.911.28.95.95.04.74.74.74.54.34.74.85.85.2Off-budget surplus (–)���������������������������������������������–1.0–0.5–0.6–0.7–0.8–0.8–0.8–0.9–0.8–0.8–0.7–0.6–0.8–0.8Primary deficit��������������������������������������������������������8.69.46.63.01.71.10.90.70.50.20.50.72.71.6Net interest�������������������������������������������������������������1.31.31.62.12.52.83.03.13.23.33.43.52.42.9Memorandum, funding (“budgetary resources”) forappropriated programs:Security��������������������������������������������������������������������5.85.85.74.94.84.64.54.44.34.24.14.14.94.6Non-security�����������������������������������������������������������4.83.12.92.82.62.52.52.42.32.32.22.22.62.5Subtotal, appropriated programs��������������������10.68.98.67.77.47.17.06.86.66.56.46.37.67.0Note: Figures displayed in the table do not reflect the impact of any recommendations from the Fiscal Commission.* 0.05 percent of GDP or less.1Outlays for TARP in 2011 and subsequent years result from obligations for the Home Affordable Modification Program, and other estimated TARP obligations incurredthrough October 3, 2010.2Reflects on-budget effects only.See Table S–8 for further detail.3These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction.Such assistance might be provided in the form ofdiscretionary or mandatory outlays or tax relief.These amounts are included as outlays for convenience.

### 156 SUMMARY TABLESTable S–6. Proposed Budget by Category Adjusted for Inflation and Population Growth(In billions of dollars, based on 2011 prices and population)2011201220132014201520162017201820192020Outlays:Appropriated (“discretionary”) programs:Security���������������������������������������������������������������������������������������������������������������895804766756752745741738734731Non-security������������������������������������������������������������������������������������������������������520461430419413410407404403405Subtotal, appropriated programs�����������������������������������������������������������������1,4151,2651,1961,1751,1651,1551,1491,1421,1371,137Mandatory programs:Social Security����������������������������������������������������������������������������������������������������730740756774794816840865891920Medicare�������������������������������������������������������������������������������������������������������������491487524570580625634643695730Medicaid��������������������������������������������������������������������������������������������������������������297266276287299313326340356373Troubled Asset Relief Program (TARP)1�����������������������������������������������������������11107631**..........Allowance for jobs initiatives�����������������������������������������������������������������������������25832..............................Allowance for health reform2�����������������������������������������������������������������������������–7–17127658783828282Other mandatory programs�������������������������������������������������������������������������������619554517500484486475461486488Subtotal, mandatory programs��������������������������������������������������������������������2,1652,0482,0842,1662,2252,3292,3582,3912,5102,592Net interest����������������������������������������������������������������������������������������������������������������251333411467508542571596620643Disaster costs3������������������������������������������������������������������������������������������������������������3444444444Total outlays�������������������������������������������������������������������������������������������������������3,8343,6503,6953,8133,9024,0304,0824,1334,2714,376Receipts:Individual income taxes���������������������������������������������������������������������������������������������1,1211,2891,3861,4701,5421,6041,6591,7091,7531,791Corporation income taxes������������������������������������������������������������������������������������������297356371408366388388384383385Social insurance and retirement receipts:Social Security payroll taxes����������������������������������������������������������������������������674700723741762787800813823830Medicare payroll taxes��������������������������������������������������������������������������������������192203210217224231235239242244Unemployment insurance����������������������������������������������������������������������������������60666971706865626059Other retirement������������������������������������������������������������������������������������������������8888887777Excise taxes����������������������������������������������������������������������������������������������������������������74798079787775747270Estate and gift taxes��������������������������������������������������������������������������������������������������25222223252627282931Customs duties�����������������������������������������������������������������������������������������������������������27313334353637383940Deposits of earnings, Federal Reserve System���������������������������������������������������������79655648424344444545Allowance for jobs initiatives������������������������������������������������������������������������������������–25–8–3–2..............................Allowance for health reform2������������������������������������������������������������������������������������16173753667478828691Other miscellaneous receipts������������������������������������������������������������������������������������17171616161615151515Total receipts������������������������������������������������������������������������������������������������������2,5672,8453,0093,1673,2333,3583,4313,4953,5543,607Deficit............................................................................................................................1,267805686647669672652638716768THE BUDGET FOR FISCAL YEAR 2011 

### 157Table S–6. Proposed Budget by Category Adjusted for Inflation and Population Growth—Continued(In billions of dollars, based on 2011 prices and population)2011201220132014201520162017201820192020On-budget deficit��������������������������������������������������������������������������������������������������������1,363922815781810823798779848883Off-budget surplus (–)������������������������������������������������������������������������������������������������–96–117–128–134–141–151–146–141–131–115Primary deficit�����������������������������������������������������������������������������������������������������������1,016472275179161130814297125Net interest����������������������������������������������������������������������������������������������������������������251333411467508542571596620643Memorandum, funding (“budgetary resources”) for appropriated programs:Security�����������������������������������������������������������������������������������������������������������������������879775773769769764760755751749Non-security��������������������������������������������������������������������������������������������������������������441434421421420414410408408412Subtotal, appropriated programs����������������������������������������������������������������������1,3201,2091,1941,1901,1891,1781,1691,1631,1591,160Note: Figures displayed in the table do not reflect the impact of any recommendations from the Fiscal Commission.* $500 million or less.1Outlays for TARP in 2011 and subsequent years result from obligations for the Home Affordable Modification Program, and other estimated TARP obligations incurredthrough October 3, 2010.2Reflects on-budget effects only.See Table S–8 for further detail.3These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction.Such assistance might be provided in the form ofdiscretionary or mandatory outlays or tax relief.These amounts are included as outlays for convenience.

### 158 SUMMARY TABLESTable S–7.Bridge From Budget EnforcementActBaseline to Baseline Projection of Current Policy(Deficit increases (+) or decreases (–) in billions of dollars)200920102011201220132014201520162017201820192020Totals2011–20152011–2020BEA baseline deficit...................................................1,4131,4049126135614954924694454215075573,0735,472Adjustments to reflect current policies:Index to inflation the 2009 parameters of the AMT.....13643238455362728497110233659Continue the 2001 and 2003 tax cuts1��������������������.....51352372662953183353523693864031,2513,097Prevent reduction in Medicare physician payments����.....722273234353840434853150371Correct baseline growth rates for pay increases�����..........–2–3–3–3–3–3–3–4–4–4–14–32Subtotal���������������������������������������������������������������.....252192943333714034324614925275621,6204,095Adjustment to reflect costs of possibleemergencies2................................................................134445555552146Adjustments to Pell Grants:Reflect cost of funding existing maximum grantaward���������������������������������������������������������������������..........912121212121212121356118Remove Pell Grants from appropriated category����–19–27–27–29–30–30–31–31–32–32–32–33–147–307Add Pell Grants to mandatory category������������������192727293030313132323233147307Subtotal���������������������������������������������������������������..........912121212121212121356118Total program adjustments��������������������������������������.....262313103493874204494785105455801,6974,259Debt service on adjustments������������������������������������.....*21131517194118146175209167909Total adjustments�����������������������������������������������.....262333213794384915435976557207891,8635,167Baseline projection of current policy deficit.......1,4131,4301,1459349409349831,0131,0421,0771,2271,3464,93610,640*$500 million or less.1In continuing the 2001 and 2003 tax cuts, the estate tax is maintained at its 2009 parameters.2These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction.Such assistance might be provided in the form ofdiscretionary or mandatory outlays or tax relief.These amounts are included as outlays for convenience.THE BUDGET FOR FISCAL YEAR 2011 

### 159S–8.Mandatory and Receipt Proposals(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Temporary Recovery Measures (emergency,exempt from PAYGO):Tax Cuts:Extend making work pay tax credit in 20111����.....30,13231,075........................................61,20761,207Extend COBRA health insurance premiumassistance1�����������������������������������������������������3,1885,237228........................................5,4655,465Provide additional tax credits for investmentin qualified property used in a qualifiedadvanced energy manufacturing project������.....2847311,1451,114539122–72–114–62–263,8133,661Extend temporary increase in expensing forsmall businesses��������������������������������������������706440–434–268–186–135–76–43–24–15–12–583–753Extend temporary bonus depreciation forcertain property���������������������������������������������22,44515,216–11,912–7,478–5,149–3,912–2,580–1,685–1,063–792–744–13,235–20,099Extend option for grants to States in lieu ofhousing tax credits1��������������������������������������2,4351,798–91–269–429–511–538–538–538–538–538498–2,192Total, tax cuts�����������������������������������������������28,77453,10719,597–6,870–4,650–4,019–3,072–2,338–1,739–1,407–1,32057,16547,289Mandatory Initiatives:Provide 6-month extension of FMAP relief tostates:Medicaid impact�������������������������������������������.....25,500.............................................25,50025,500Foster care impact����������������������������������������.....214194...................................237237Extend EUC/EB unemployment insurancebenefits�����������������������������������������������������������31,00018,000.............................................18,00018,000Enhance TANF emergency fund�����������������������5081,3571,363273...................................2,9932,993Extend ARRA suspension of SNAP time limits����.....252525Provide $250 Economic Recovery Payments2��13,58568195........................................776776Interaction with the making work pay taxcredit���������������������������������������������������������–348–1,986–2........................................–1,988–1,988Total, mandatory initiatives������������������������44,74543,7911,475277...................................45,54345,543Allowance for other jobs initiatives2...........24,00050,00016,0006,0004,000..............................76,00076,000Health insurance reform (allowance)2,3................5,500–23,000–34,500–39,000–27,500–3,00012,0002,000–5,500–12,000–19,500–127,000–150,000Climate policy (deficit-neutral reserve)4..............................................................................

### 160 SUMMARY TABLESS–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Other Tax Provisions:5Tax Cuts for Families and Individuals:6Expand earned income tax credit1�������������������.....851,6741,6451,6361,6281,6391,6631,6921,7301,7666,66815,158Expand the child and dependent care taxcredit��������������������������������������������������������������.....3771,3451,3591,3681,3731,3771,3741,3651,3541,3495,82212,641Provide for automatic enrollment in IRAs anddouble the tax credit for small employerplan startup costs1����������������������������������������..........5068258769821,1131,2611,4231,6041,8013,18910,391Expand saver’s credit1��������������������������������������.....3232,6832,9963,0293,1093,1953,3233,4903,7163,91012,14029,774Extend American opportunity tax credit1��������.....9516,8757,4447,8158,4008,8418,6328,7388,8708,90731,48575,473Total, tax cuts for families and individuals.....1,73613,08314,26914,72415,49216,16516,25316,70817,27417,73359,304143,437Tax Cuts for Businesses:Eliminate capital gains taxation on smallbusinesses������������������������������������������������������....................552807311,2171,5911,9332,2483358,055Make research and experimentation tax creditpermanent�����������������������������������������������������3,0445,3465,9696,6227,2867,9458,5979,2449,88710,53011,18233,16882,608Remove cell phones from listed property���������692772262382482662812963143323481,2552,826Total, tax cuts for businesses����������������������3,1135,6236,1956,8607,5898,4919,60910,75711,79212,79513,77834,75893,489Continue certain expiring provisionsthrough calendar year 20111.........................8,86721,53911,9262,2051,5811,4221,3091,0131,1381,4353,10938,67346,677Other Revenue Changes and LoopholeClosers:Reform treatment of financial institutions andproducts:Impose a financial crisis responsibility fee���.....–8,000–8,000–9,000–9,000–9,000–9,000–9,000–9,000–10,000–10,000–43,000–90,000Require accrual of income on forward saleof corporate stock�������������������������������������–1–5–12–19–26–33–36–38–40–42–44–95–295Require ordinary treatment of incomefrom day-to-day dealer activities forcertain dealers of equity options andcommodities����������������������������������������������–49–169–214–226–240–254–270–286–303–321–341–1,103–2,624Modify the definition of “control” forpurposes of section 249����������������������������–2–15–30–32–34–36–38–41–43–46–48–147–363Subtotal, reform treatment of financialinstitutions and products�������������������–52–8,189–8,256–9,277–9,300–9,323–9,344–9,365–9,386–10,409–10,433–44,345–93,282Reinstate Superfund taxes�������������������������������.....–1,203–1,608–1,729–1,837–1,921–1,995–2,068–2,129–2,196–2,239–8,298–18,925Repeal LIFO method of accounting forinventories�����������������������������������������������������..........–2,667–6,007–7,070–7,120–7,162–7,224–7,207–7,278–7,350–22,864–59,085Repeal gain limitation for dividends receivedin reorganization exchanges�������������������������.....–46–77–78–78–81–83–85–86–86–88–360–788THE BUDGET FOR FISCAL YEAR 2011 

### 161S–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Reform U.S.international tax system:Defer deduction of interest expense relatedto deferred income�����������������������������������.....–2,024–3,357–3,343–3,350–3,434–3,520–3,572–1,803–613–626–15,508–25,642Reform foreign tax credit: Determine theforeign tax credit on a pooling basis�������.....–1,928–3,198–3,184–3,191–3,271–3,353–3,403–3,439–3,462–3,532–14,772–31,961Reform foreign tax credit: Preventsplitting of foreign income and foreigntaxes����������������������������������������������������������.....–1,226–2,223–2,494–2,707–2,875–3,006–3,106–3,186–3,253–3,327–11,525–27,403Tax currently excess returns associatedwith transfers of intangibles offshore�����.....–635–1,580–1,573–1,577–1,616–1,657–1,681–1,699–1,711–1,745–6,981–15,474Limit shifting of income through intangibleproperty transfers������������������������������������.....–12–32–54–78–104–131–159–189–220–254–280–1,233Disallow the deduction for excess nontaxedreinsurance premiums paid to affiliates����.....–22–53–54–54–50–50–54–58–60–64–233–519Limit earnings stripping by expatriatedentities������������������������������������������������������.....–211–352–353–356–368–379–385–390–393–402–1,640–3,589Repeal 80/20 company rules������������������������.....–83–111–111–112–116–120–122–123–124–127–533–1,149Prevent the use of equity swaps to avoiddividend withholding taxes���������������������–219–275–135–91–94–96–97–102–109–115–123–691–1,237Modify tax rules for dual capacitytaxpayers��������������������������������������������������.....–381–676–734–788–846–907–972–1,044–1,121–1,080–3,425–8,549Combat under-reporting of income onaccounts and entities in offshorejurisdictions����������������������������������������������–27–72–161–716–919–447–381–549–686–740–762–2,315–5,433Subtotal, reform U.S.international taxsystem�������������������������������������������������–246–6,869–11,878–12,707–13,226–13,223–13,601–14,105–12,726–11,812–12,042–57,903–122,189Eliminate fossil fuel tax preferences:Oil and gas company preferences:Repeal enhanced oil recovery credit7����.................................................................Repeal credit for oil and gas producedfrom marginal wells7��������������������������.................................................................Repeal expensing of intangible drillingcosts�����������������������������������������������������.....–1,202–1,582–1,089–914–848–694–482–374–344–310–5,635–7,839Repeal deduction for tertiary injectants.....–5–9–9–8–7–6–6–5–6–6–38–67Repeal exception to passive losslimitations for working interests inoil and natural gas properties������������.....–20–24–19–18–17–17–17–16–16–16–98–180Repeal percentage depletion for oil andnatural gas wells��������������������������������.....–522–895–933–969–1,009–1,052–1,095–1,141–1,184–1,226–4,328–10,026

### 162 SUMMARY TABLESS–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Repeal domestic manufacturing taxdeduction for oil and natural gascompanies�������������������������������������������.....–851–1,470–1,559–1,650–1,742–1,831–1,920–2,007–2,096–2,188–7,272–17,314Increase geological and geophysicalamortization period for independentproducers to seven years��������������������.....–44–160–246–231–177–122–67–28–17–18–858–1,110Subtotal, oil and gas companypreferences������������������������������������.....–2,644–4,140–3,855–3,790–3,800–3,722–3,587–3,571–3,663–3,764–18,229–36,536Coal tax preferences:Repeal expensing of exploration anddevelopment costs�������������������������������.....–32–55–49–45–45–44–40–37–34–32–226–413Repeal percentage depletion for hardmineral fossil fuels�����������������������������.....–57–98–102–106–109–111–115–119–122–123–472–1,062Repeal capital gains treatment forroyalties����������������������������������������������–10–18–25–48–67–78–87–95–103–111–119–236–751Repeal domestic manufacturingdeduction for hard mineral fossilfuels�����������������������������������������������������.....–3–5–5–5–6–6–6–7–7–7–24–57Subtotal, coal tax preferences�����������–10–110–183–204–223–238–248–256–266–274–281–958–2,283Subtotal, eliminate fossil fuel taxpreferences���������������������������������–10–2,754–4,323–4,059–4,013–4,038–3,970–3,843–3,837–3,937–4,045–19,187–38,819Tax carried interest as ordinary income����������.....–1,452–3,289–3,914–3,741–3,176–2,534–1,975–1,530–1,355–1,011–15,572–23,977Modify cellulosic biofuel producer credit���������–784–6,569–8,058–4,901–2,659–1,491–309....................–23,678–23,987Eliminate advanced earned income tax credit1.....–120–72–70–69–68–69–69–72–74–77–399–760Deny deduction for punitive damages��������������..........–22–32–33–34–35–36–38–38–39–121–307Repeal lower-of-cost-or-market inventoryaccounting method����������������������������������������..........–286–1,423–2,045–1,402–1,127–283–296–309–323–5,156–7,494Make unemployment insurance surtaxpermanent�����������������������������������������������������..........–1,458–1,501–1,539–1,571–1,596–1,616–1,631–1,642–1,642–6,069–14,196Reduce the tax gap and make reforms:Expand information reporting:Require information reporting onpayments to corporations�������������������.....–84–612–777–924–983–1,040–1,095–1,152–1,212–1,275–3,380–9,154Require information reporting for rentalproperty expense payments���������������.....–179–267–281–296–312–327–342–357–372–387–1,335–3,120Require information reporting forprivate separate accounts of lifeinsurance companies��������������������������.....–1–2–3–4–4–6–7–8–10–13–14–58Require a certified Taxpayer IdentificationNumber for contractors����������������������������.....–17–44–63–72–76–79–83–86–90–94–272–704Require increased information reportingfor certain government payments������.....–25–70–58–28–30–32–34–35–37–39–211–388Increase information return penalties����.....–20–34–35–35–36–42–43–43–44–44–160–376Subtotal, expand informationreporting����������������������������������������.....–326–1,029–1,217–1,359–1,441–1,526–1,604–1,681–1,765–1,852–5,372–13,800THE BUDGET FOR FISCAL YEAR 2011 

### 163S–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Improve compliance by businesses:Require electronic filing by certain largeorganizations��������������������������������������.................................................................Implement standards clarifying whenemployee leasing companies can beheld liable for their clients’ Federalemployment taxes�������������������������������.....–4–6–6–7–7–7–8–8–9–9–30–71Strengthen rules pertaining toclassification of employees asindependent contractors���������������������.....–11–214–543–688–766–848–933–1,020–1,112–1,208–2,222–7,343Subtotal, improve compliance bybusinesses��������������������������������������.....–15–220–549–695–773–855–941–1,028–1,121–1,217–2,252–7,414Strengthen tax administration:Codify “economic substance doctrine”���.....–23–77–157–272–366–476–593–682–758–838–895–4,242Allow assessment of criminal restitutionas tax���������������������������������������������������..........–3–4–4–4–4–4–4–4–4–15–35Revise offer-in-compromise applicationrules�����������������������������������������������������–1–3–3–3–3–3–3–3–3–3–4–15–31Expand IRS access to information in theNational Directory of New Hires fortax administration purposes��������������.................................................................Make repeated willful failure to file atax return a felony�����������������������������....................–1–1–1–1–2–2–2–2–10Facilitate tax compliance with localjurisdictions���������������������������������������.........................–1–1–1–1–1–1–1–6Extend statute of limitations whereState adjustment affects Federal taxliability������������������������������������������������.....–3–4–4–4–4–5–5–5–5–6–19–45Improve investigative disclosure statute���....................–1–1–1–1–2–2–2–2–10Subtotal, strengthen taxadministration�������������������������������–1–29–87–168–285–380–491–608–699–775–857–949–4,379Expand penalties:Clarify the bad check penalty applies toelectronic checks and other paymentforms���������������������������������������������������.....–1–2–2–2–3–3–3–3–4–4–10–27Impose a penalty on failure to complywith electronic filing requirements���.........................–1–1–1–2–2–2–1–9Subtotal, expand penalties���������������������.....–1–2–2–2–4–4–4–5–6–6–11–36Modify estate and gift tax valuationdiscounts and make other reforms:Require consistent valuation fortransfer and income tax purposes�����–40–135–171–182–192–204–216–229–243–258–273–884–2,103Modify rules on valuation discounts�����.....–666–1,413–1,531–1,671–1,818–1,972–2,135–2,305–2,484–2,672–7,099–18,667

### 164 SUMMARY TABLESS–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Require a minimum term for grantorretained annuity trusts (GRATs)�������.....–15–46–93–160–231–308–389–477–570–670–545–2,959Subtotal, modify estate and gift taxvaluation discounts and makeother reforms���������������������������������–40–816–1,630–1,806–2,023–2,253–2,496–2,753–3,025–3,312–3,615–8,528–23,729Subtotal, reduce the tax gap andmake reforms�����������������������������–41–1,187–2,968–3,742–4,364–4,851–5,372–5,910–6,438–6,979–7,547–17,112–49,358Reform treatment of insurance institutionsand products:Modify rules that apply to sales of lifeinsurance contracts����������������������������������.....–22–71–84–101–117–136–156–179–204–233–395–1,303Modify dividends-received deduction for lifeinsurance company separate accounts���.....–149–379–407–432–441–468–492–511–512–515–1,808–4,306Expand pro rata interest expensedisallowance for corporate-owned lifeinsurance��������������������������������������������������.....–20–87–183–276–437–659–910–1,293–1,731–2,188–1,003–7,784Permit partial annuitization of anonqualified annuity contract�����������������.....–5–21–39–59–81–105–132–160–192–226–205–1,020Subtotal, reform treatment of lifeinsurance and products����������������������.....–196–558–713–868–1,076–1,368–1,690–2,143–2,639–3,162–3,411–14,413Total, other revenue changes andloophole closers������������������������������–1,133–28,585–45,520–50,153–50,842–49,375–48,565–48,269–47,519–48,754–49,998–224,475–467,580Upper-Income Tax Provisions:Upper-income tax provisions devoted to deficitreduction:Expand the 28-percent rate and reinstatethe 36-percent and 39.6-percent ratesfor those taxpayers with income over$250,000 (married) and $200,000 (single):PAYGO�����������������������������������������������.....6981,0751,2111,3491,4791,6171,7571,8992,0352,1755,81215,295Non-PAYGO���������������������������������������.....–15,207–27,292–30,506–33,905–37,155–40,426–43,717–47,034–50,434–54,058–144,065–379,734Reinstate the personal exemption phaseoutand limitation on itemized deductionsfor those taxpayers with income over$250,000 (married) and $200,000 (single)(non-PAYGO)��������������������������������������������.....–6,840–14,925–17,119–18,991–20,808–22,571–24,324–26,054–27,687–29,170–78,683–208,489Impose 20-percent tax rate on capital gainsand dividends for those taxpayers withincome over $250,000 (married) and$200,000 (single) (non-PAYGO).��������������–1,344–12,165263–3,315–8,230–11,372–12,370–13,288–14,162–14,973–15,752–34,819–105,364Subtotal, upper-income provisionsdevoted to deficit reduction����������������–1,344–33,514–40,879–49,729–59,777–67,856–73,750–79,572–85,351–91,059–96,805–251,755–678,292THE BUDGET FOR FISCAL YEAR 2011 

### 165S–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Limit the tax rate at which itemizeddeductions reduce tax liability to 28 percent.....–7,896–21,582–24,500–27,019–29,351–31,570–33,938–36,268–38,426–40,625–110,348–291,175Total, upper-income tax provisions�������������–1,344–41,410–62,461–74,229–86,796–97,207–105,320–113,510–121,619–129,485–137,430–362,103–969,467Trade Initiatives:Promote trade����������������������������������������������������.....1454305526066476807057297537772,3806,024Other Initiatives:Extend and modify the New Markets taxcredit��������������������������������������������������������������.....1132293454304805115104412791031,5973,441Reform and extend build America bonds1�������.....–8333444443524Total, other initiatives���������������������������������.....1052323484334845155144452831061,6023,465Mandatory Initiatives and Savings:8Agriculture:Enact Animal Plant and Health Inspection Service(APHIS) fees����������������������������������������������������������.....–20–27–27–28–29–30–31–32–33–34–131–291Enact Food Safety and Inspection Service (FSIS)performance fee�����������������������������������������������������.....–11–13–13–13–14–14–14–14–15–15–64–136Enact Grain Inspection, Packers, and StockyardsAdministration (GIPSA) fees��������������������������������.....–29–30–31–31–31–32–32–32–33–34–152–315Enact Natural Resources Conservation Service(NRCS) fee�������������������������������������������������������������.....–19–19–19–19–19–19–19–19–19–19–95–190Eliminate Commodity Storage payments����������������.....–2.............................................–2–2Reduce commodity payments to wealthy farmers���.....–1–172–201–241–245–258–262–277–297–309–860–2,263Reauthorize Child Nutrition programs�������������������.....8601,0001,0001,0001,0001,0001,0001,0001,0001,0004,8609,860Reform Market Access Program�������������������������������.....–8–38–40–40–40–40–40–40–40–40–166–366Total, Agriculture����������������������������������������������.....7707016696286226076025865635493,3906,297Commerce:Eliminate grants to manufacturers of worsted wool���.....–5–5–5–5–5.........................–25–25Corps of Engineers:Support capital investment in the inlandwaterways (receipt effect)2�����������������������������������..........–196–163–187–129–100–72–70–68–68–675–1,053Defense:Implement concurrent receipt policy:Effect on military retirement����������������������������.....2173464355115315415505605705812,0404,842Accrual payments to the Military RetirementFund (non-PAYGO)���������������������������������������.....4083954064164264404554704865032,0514,405

### 166 SUMMARY TABLESS–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Military Retirement Fund offsetting receiptsfor concurrent receipt accruals (non-PAYGO)����������������������������������������������������������.....–408–395–406–416–426–440–455–470–486–503–2,051–4,405Payments to Military Retirement Fund (non-PAYGO)����������������������������������������������������������.....4694875055246046276516757007272,5895,969Military Retirement Fund offsetting receipts(non-PAYGO)�������������������������������������������������.....–469–487–505–524–604–627–651–675–700–727–2,589–5,969Provide additional accrual payments to Medicare/Eligible Retiree Health Care Fund (non-PAYGO)���.....–143.............................................–143–143Total, Defense����������������������������������������������������.....743464355115315415505605705811,8974,699Education:Make Pell Grant funding mandatory and increaseand index maximum awards��������������������������������28252,6032,9426,5815,1836,6168,1549,81811,87314,03118,13468,626Eliminate entitlements for financial intermediariesunder the Family Federal Education LoanProgram�����������������������������������������������������������������–2,266–8,034–6,527–4,458–3,098–2,975–3,184–3,414–3,636–3,840–4,129–25,092–43,294Expand income-based repayment options forFederal student loans�������������������������������������������1,6924485125515866447087748421,1581,2652,7417,487Extend mandatory funding for Historically BlackColleges and Universities and other Minority-Serving Institutions����������������������������������������������131862322552552552552552552552551,1832,458Create a new Graduation Promise Grants programto strengthen high schools������������������������������������20140260380260140.........................1,1801,180Create a new Early Learning Challenge Fund�������314565888999661,0001,0001,0001,0001,0001,0003,9098,909Create a new Access and Completion Fundprogram�����������������������������������������������������������������117583700700700583117....................3,2663,383Provide mandatory funding for community collegesto support the American Graduation Initiative��35419917659587939509509509509504,0468,796Modernize Perkins loans������������������������������������������.....–736–709–614–563–583–589–539–468–396–274–3,205–5,471Total, Education������������������������������������������������–388–5,592–1,3511,4206,6455,0395,8737,1808,76111,00013,0986,16252,074Energy:Repeal ultra-deepwater oil and gas research anddevelopment program�������������������������������������������.....–20–40–50–50–30–10....................–190–200Environmental Protection Agency:Enact pesticide and pre-manufacture notification(PMN) fees�������������������������������������������������������������.....–50–54–80–83–89–89–92–92–95–95–356–819Health and Human Services (HHS):Expand child care entitlement to States�����������������.....5027539611,1151,1061,1421,2261,3141,4031,4934,43711,015THE BUDGET FOR FISCAL YEAR 2011 

### 167S–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Extend ARRA child support enforcement incentivematch provision�����������������������������������������������������.....555114........................................669669Create a LIHEAP trigger�����������������������������������������.....1,4601,4751,1156903732852582502502505,1136,406Continue child welfare study�����������������������������������.....321...................................66Expand CMS program integrity authority��������������.....–109–213–1,121–1,250–1,418–1,564–1,660–1,784–1,912–2,047–4,111–13,078Extend TANF supplemental grants�������������������������.....251644...................................319319Establish Fatherhood, Marriage, and FamiliesInnovation Fund���������������������������������������������������.....–118220148100..............................350350Improve child support enforcement tools����������������.....1–2–2–2–2–2–2–2–2–2–7–17Outyear costs of extending TANF supplementalgrants���������������������������������������������������������������������..........2513153193193193193193193191,2042,799Reauthorize the Court Improvement Program�������.....14161820191642.....59100Support teen pregnancy prevention�������������������������.....20424849505050505050209459Total, HHS���������������������������������������������������������.....2,5662,7101,4851,039448249207151110638,2489,028Homeland Security:Eliminate grants to manufacturers of worsted wool����.....5555..............................2020Housing and Urban Development:Provide funding for the Affordable Housing TrustFund�����������������������������������������������������������������������.....20140250250240100....................9001,000Interior:Increase fees for migratory bird hunting andconservation stamps2��������������������������������������������.....–4.............................................–4–4Increase return from minerals on Federal lands:End Abandoned Mine Lands (AML) paymentsto certified States������������������������������������������.....–115–171–177–176–97–72–75–123–140–95–736–1,241Impose fee on nonproducing oil and gas leases.....–8–22–38–53–67–80–97–114–132–149–188–760Repeal Energy Policy Act fee prohibition andmandatory permit funds�������������������������������..........–22–22–21–20.........................–85–85Reauthorize Federal land sales/acquisition law(FLTFA)�����������������������������������������������������������������.....–4–6–11–12–3.........................–36–36Repeal geothermal payments to counties underEPAct���������������������������������������������������������������������.....–8–8–8–8–8–8–8–8–8–8–40–80Return to net receipts sharing for energy minerals..........–45–45–47–51–50–51–51–54–56–188–450Reserve funds for insular affairs assistance������������.....21212121161616161615100179Total, Interior����������������������������������������������������.....–118–253–280–296–230–194–215–280–318–293–1,177–2,477

### 168 SUMMARY TABLESS–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Labor:Implement unemployment insurance integritylegislation:2,9����������������������������������������������������������PAYGO���������������������������������������������������������������..........–190–218–162–164–179–202–114–199–214–734–1,642Non-PAYGO�������������������������������������������������������..........–74–148–138–117–3483–3772671–477–708Reform FECA program���������������������������������������������.....–10–14–7–10–20–29–39–50–60–71–61–310Extend foreign labor certification fees���������������������...............11718182020202136135Reform Trade Adjustment Assistance����������������������.....1455647961,0449488848468328478793,4977,785Total, Labor��������������������������������������������������������.....1352864247516656607083116346862,2615,260State:Change retention policy for consular fees (receipteffect)2��������������������������������������������������������������������.....7828108258408578738919099279464,1148,660Treasury:Levy payments to Federal contractors withdelinquent tax debt:Authorize post-levy due process (receipteffect)2������������������������������������������������������������.....–77–115–119–124–109–113–118–122–127–132–544–1,156Increase levy authority to 100 percent forvendor payments (receipt effect)2�����������������.....–61–87–86–90–78–82–85–88–92–96–402–845Revise terrorism risk insurance program2��������������.....–26–42–102–134–7455134–39–9–12–378–249Offset tax refunds to collect deliquent taxes forout-of-state residents��������������������������������������������.................................................................Establish FMS debt collection fee����������������������������.................................................................Restructure assistance to New York City (NYC):Provide tax incentives for transportationinfrastructure (receipt effect)2�����������������������������.....2002002002002002002002002002001,0002,000Total, Treasury��������������������������������������������������.....36–44–107–148–6160131–49–28–40–324–250Veterans Affairs:Implement concurrent receipt policy:Effect on Veterans disability payments������������.....47495153545454535352254520Extend VBA pension limitation��������������������������������..........–559–571–584–597–611....................–2,311–2,922Medicaid impact������������������������������������������������..........313326339353367....................1,3311,698Reform criteria for special monthly pension�����������.....–3–6–10–13–16–20–23–27–30–33–48–181Extend VBA authority for use of HHS data������������..........21.....–1–2–3–4–5–52–17Extend veterans income verification������������������������..........20–7–13–20–27....................–20–47Provide authority for vendee loan pooling���������������..........–86–99–5..............................–190–190Total, Veterans Affairs��������������������������������������.....44–267–309–223–227–23928221814–982–1,139THE BUDGET FOR FISCAL YEAR 2011 

### 169S–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)20102011201220132014201520162017201820192020Totals2011–20152011–2020Federal Communications Commission:Auction domestic satellite spectrum������������������������.....–100–75–25...................................–200–200Provide permanent auction authority����������������������...............–200–200–200–200–200–200–200–200–600–1,600Enact spectrum license user fee�������������������������������–50–200–300–425–550–550–550–550–550–550–550–2,025–4,775Eliminate Telecommunications Development Fund����–3–7–7–7–6–6–6–6–6–6–6–33–63Total, Federal Communications Commission�����–53–307–382–657–756–756–756–756–756–756–756–2,858–6,638Social Security Administration:Require States and localities to provide pensioninformation (non-PAYGO)������������������������������������....................–172–375–492–523–478–452–417–547–2,909Revert to Quarterly Wage Reporting (non-PAYGO).....2030100...................................150150Total, Social Security Administration��������������.....2030100–172–375–492–523–478–452–417–397–2,759Other Independent Agencies:Reform financial regulatory system�������������������������.....8671,5952,2042,5832,8933,0522,3971,8551,4331,14110,14220,020Reflect discrimination claims settlement (non-PAYGO)������������������������������������������������������������������690230230........................................460460Total, other independent agencies��������������������6901,0971,8252,2042,5832,8933,0522,3971,8551,4331,14110,60220,480Multi-Agency:Fund Cobell settlement costs:PAYGO���������������������������������������������������������������100400400200200200200200100..........1,4001,900Non-PAYGO�������������������������������������������������������1,412............................................................Implement program integrity allocationadjustments (non-PAYGO)2����������������������������������.....–1,864–4,555–7,005–9,452–12,507–15,807–17,939–19,448–21,138–22,506–35,383–132,221Exclude refundable tax credits from means-testedprograms����������������������������������������������������������������2626262525252423232222127241Reform asset limits in means-tested programs�������.....4268131,1451,0901,0279829659739869864,5019,393Total, multi-agency��������������������������������������������1,538–1,012–3,316–5,635–8,137–11,255–14,601–16,751–18,352–20,130–21,498–29,355–120,687Outyear PAYGO Impact of Changes inMandatory Programs included inAppropriations Language:Justice, Crime Victims Fund Obligation Delay�������..........2,7311,366455..............................4,5524,552Total, mandatory and receipt proposals.........114,30981,497–69,867–137,843–137,205–128,927–121,145–138,590–152,488–165,698–178,834–392,346–1,149,100Note:For receipt effects, positive figures indicate lower receipts.For outlay effects, positive figures indicate higher outlays.For net costs, positive figures indicate higherdeficits.Note: Figures displayed in the table do not reflect the impact of any recommendations from the Fiscal Commission.

### 170 SUMMARY TABLESS–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)1The estimates for this proposal include effects on outlays.The outlay effects included in the totals above are listed below:201020112012201320142015201620172018201920202011–20152011–2020Extend making work pay tax credit in 2011�����������.....70321,265........................................21,96821,968Extend COBRA health insurance premiumassistance��������������������������������������������������������������31952423........................................547547Extend option for grants to States in lieu ofhousing tax credits������������������������������������������������2,4351,815........................................1,8151,815Expand earned income tax credit�����������������������������.....831,6671,6351,6281,6221,6341,6591,6891,7261,7626,63515,105Expand child and dependent care tax credit�����������..........3994064033984034064084074091,6063,639Provide for automatic enrollment in IRAs anddouble the tax credit for small employer planstartup costs����������������������������������������������������������..........831461491581772002232502815361,667Expand saver’s credit������������������������������������������������.....5703,7151,4021,3691,3661,3491,3371,3391,3401,3538,42215,140Provide American opportunity tax credit����������������..........2,9413,0583,1463,2683,4413,3633,3303,3103,30212,41329,159Continue certain expiring provisions throughcalendar year 2011������������������������������������������������669123........................................114114Eliminate advanced earned income tax credit��������.....–120–72–70–69–68–69–69–72–74–77–399–760Reform and extend build America bonds�����������������.....2661,2162,6304,1085,6087,1058,59510,07811,55413,02313,82864,183Total outlay effects of receipt proposals�����������2,8203,93231,2609,20710,73412,35214,04015,49116,99518,51320,05367,485152,5772The estimates for this proposal include effects on receipts.The receipt effects included in the totals above are listed below.201020112012201320142015201620172018201920202011–20152011–2020Provide $250 economic recovery payments�������������38–1,959.............................................–1,959–1,959Jobs initiatives allowance�����������������������������������������12,00025,0008,0003,0002,000..............................38,00038,000Health insurance allowance�������������������������������������.....–16,000–17,500–40,500–57,000–75,500–89,500–98,000–106,500–116,000–126,500–206,500–743,000Preserve cost-sharing of inland waterways capitalcosts�����������������������������������������������������������������������..........–196–163–187–129–100–72–70–68–68–675–1,053Increase fees for migratory bird hunting andconservation stamps���������������������������������������������.....–14–14–14–14–14–14–14–14–14–14–70–140Implement unemployment insurance integritylegislation:PAYGO���������������������������������������������������������������..........–39–40–27–32–49–7219–62–73–138–375Non-PAYGO�������������������������������������������������������..........–3–21136124247–20820025242657Change retention policy for passport applicationfees�������������������������������������������������������������������������.....7828108258408578738919099279464,1148,660Authorize post-levy due process�������������������������������.....–77–115–119–124–109–113–118–122–127–132–544–1,156Increase levy authority to 100 percent for vendorpayments���������������������������������������������������������������.....–61–87–86–90–78–82–85–88–92–96–402–845Revise terrorism risk insurance program����������������..........2118459917320562115183603THE BUDGET FOR FISCAL YEAR 2011 

### 171S–8.Mandatory and Receipt Proposals—Continued(Deficit increases (+) or decreases (-) in millions of dollars)201020112012201320142015201620172018201920202011–20152011–2020Restructure assistance to NYC: Provide taxincentives for transportation infrastructure�������.....2002002002002002002002002002001,0002,000Implement program integrity allocationadjustments – IRS������������������������������������������������.....–385–1,164–2,355–3,955–6,015–7,987–9,238–9,931–10,378–10,809–13,874–62,217Total receipt effects of mandatory proposals���12,0387,486–10,087–39,236–58,301–80,685–96,475–106,056–115,799–125,393–136,279–180,823–760,8253Allowance reflects the average budget impacts of the House- and Senate-passed health care reform bills, extrapolated to 2020 and adjusted to remove the effects of fourprovisions already included explicitly as 2011 Budget proposals.The four adjustments are for proposals to require information reporting on payments to corporations,codify the economic substance doctrine, modify cellulosic biofuel producer credit, and extend FMAP relief to States.4A comprehensive market-based climate change policy will be deficit neutral because proceeds from emissions allowances will be used to compensate vulnerable families,communities, and businesses during the transition to a clean energy economy.Receipts will also be reserved for investments to reduce greenhouse gas emissions,includingsupport of clean energy technologies, and in adapting to the impacts of climate change, both domestically and in developing countries.5Receipt effects unless otherwise noted.6The Administration continues to support expanding refundability of the child tax credit by lowering the refundability threshold to $3,000, as well as the expansion of theearned income tax credit for married couples by increasing the phase-out threshold by $5,000 compared to other filers.These policies are incorporated in the baselineprojection of current policy.7This provision is estimated to have zero receipt effects under the Administration’s current projections for energy prices.8Outlay effects unless otherwise noted.9Net of income offsets.

### 172 SUMMARY TABLESTable S–9.Bridge Between Total Mandatory andReceipt Proposals and PAYGO ScorekeepingDeficit increases (+) or decreases (–) in millions of dollarsTotal12011-2020 total mandatory and receipt proposals, Table S–8������������������������������������������������������������������������������������������–1,149,100Plus 2010 effects: PAYGO includes a “lookback” provision to capture current-year costs��������������������������������������114,3092010–2020 total mandatory and receipt proposals and climate policies, Table S–8.........................................–1,034,791Adjustments to remove costs or savings for non-PAYGO items on S–8:Temporary recovery measures�����������������������������������������������������������������������������������������������������������������������������������–266,351Savings from not extending upper-income tax cuts��������������������������������������������������������������������������������������������������694,931Program integrity and other savings generated by increased discretionary funding���������������������������������������������135,838Other non-PAYGO items��������������������������������������������������������������������������������������������������������������������������������������������–3,847Total, adjustments for non-PAYGO items.....................................................................................................561,261TOTAL: Net scoreable PAYGO savings in Administration’s budget...................................................................–473,530Note: Figures displayed in the table do not reflect the impact of any recommendations from the Fiscal Commission.1Totals represent 2010-2020 unless otherwise stated.THE BUDGET FOR FISCAL YEAR 2011 

### 173Table S–10.Funding Levels for Appropriated (“Discretionary”) Programs by Category1(Budgetary resources in billions of dollars)2009 Actual2010Enacted2011RequestTotals2012201320142015201620172018201920202011–20152011–2020Non-ARRAARRA2Discretionary Policy by Category:Security Agencies�������������������������650.112.0683.7719.2747.5768.7789.7814.0834.6856.5879.0902.7927.63,839.08,239.4Non-Security Agencies�����������������407.8253.1446.3441.3446.4446.2459.1472.3478.7488.8501.6517.0537.52,265.24,788.9Total, Base Discretionary Funding....1,057.9265.11,130.01,160.51,193.91,214.91,248.81,286.21,313.31,345.31,380.61,419.71,465.16,104.313,028.3Other Discretionary Funding (notincluded above):Overseas ContingencyOperations3��������������������������������145.9.....130.0159.350.050.050.050.050.050.050.050.050.0359.3609.3Other Supplemental/EmergencyFunding�������������������������������������44.1.....0.4............................................................Proposed 2010 SupplementalFunding4�����������������������������������..........41.1............................................................Grand Total, DiscretionaryBudgetary Resources...............1,248.0265.11,301.51,319.81,243.91,264.91,298.81,336.21,363.31,395.31,430.61,469.71,515.16,463.613,637.6Memorandum:Base Security Budget Authorityadjusted for Inflation andPopulation����������������������������������������685.512.6700.1719.2726.6725.5723.7724.3721.0717.7714.6711.9710.53,619.37,194.9Base Non-Security Budgetary Resourcesadjusted for Inflation and Population����430.0266.9457.0441.3433.9421.1420.8420.2413.6409.6407.7407.7411.72,137.34,187.6Grand Total, Discretionary BudgetaryResources adjusted for Inflationand Population��������������������������������1,315.9279.51,332.81,319.81,209.11,193.81,190.21,189.01,177.71,169.21,163.01,159.11,160.56,102.011,931.5Grand Total, Discretionary BudgetaryResources as a Percent of GDP������8.8%1.9%8.9%8.6%7.7%7.4%7.1%7.0%6.8%6.6%6.5%6.4%6.3%7.6%7.0%1Although the Budget shows discretionary funding in nominal terms, the Administration conceives of discretionary growth rates in inflation-adjusted terms.If inflationprojections are revised from what is currently projected, future budgets would be expected to adjust funding levels up or down accordingly.(This statement does not applyto funding growth between 2010 and the 2011 budget year, since the appropriations process for 2011 must begin immediately and before inflation assumptions will berevisited.It also does not apply to the outyear BA for overseas contingency operations, which is a placeholder and does not represent a policy determination.)2“ARRA” refers to the American Recovery and Reinvestment Act of 2009 (P.L.111-5).3The Budget includes placeholder estimates of $50 billion per year for Overseas Contingency Operations in 2012 and beyond.These estimates do not reflect any specificpolicy decisions.4The 2010 requested supplemental includes additional funding for Overseas Contingency Operations.

### 174 SUMMARY TABLESTable S–11.Funding Levels for Appropriated (“Discretionary”) Programs byAgency1(Budgetary resources in billions of dollars)2009 Actual2010Enacted2011RequestTotalsNon-ARRAARRA220122013201420152011–20152011–2020Base Discretionary Resources by Agency:Security Agencies:Defense (DOD)����������������������������������������������������������������������513.27.4530.8548.9566.4581.8597.8616.02,910.96,255.3Energy - National Nuclear Security Administration���������9.1.....9.911.211.611.912.412.960.0126.6Homeland Security (DHS)3��������������������������������������������������42.12.839.443.644.244.845.346.7224.6481.4Veterans Affairs4�������������������������������������������������������������������47.61.453.157.059.761.363.064.7305.6659.7State and Other International Programs5��������������������������38.10.450.658.565.769.071.273.6337.9716.4Subtotal, Security Agencies..................................................650.112.0683.7719.2747.5768.7789.7814.03,839.08,239.4Non-Security Agencies:Agriculture5���������������������������������������������������������������������������22.66.925.023.924.624.525.226.0124.2266.2Commerce�����������������������������������������������������������������������������9.47.813.98.99.18.88.58.844.2101.0Census Bureau����������������������������������������������������������������3.11.07.21.31.11.21.31.512.123.9Education6�����������������������������������������������������������������������������41.481.146.849.750.150.251.452.7254.1537.5Energy (excluding National Nuclear SecurityAdministration)����������������������������������������������������������������16.936.716.517.117.117.217.718.387.5186.2Health and Human Services (HHS)7�����������������������������������77.622.484.183.582.480.783.185.5415.1881.1Housing and Urban Development���������������������������������������40.013.643.641.641.342.044.145.3214.3464.1Interior����������������������������������������������������������������������������������11.33.012.212.011.911.812.212.560.3126.6Justice�����������������������������������������������������������������������������������26.04.027.524.128.528.029.029.9139.5291.8Labor�������������������������������������������������������������������������������������12.94.814.314.013.513.113.313.567.4138.4State and Other International Programs5��������������������������0.10.20.10.10.10.10.10.10.61.3Transportation����������������������������������������������������������������������70.548.176.077.679.280.682.184.7404.2824.5Budget Authority (BA)����������������������������������������������������16.848.121.822.870.033.839.041.2206.6418.1Obligation Limitations���������������������������������������������������53.7.....54.254.89.346.843.143.6197.6406.4Treasury��������������������������������������������������������������������������������12.60.313.613.914.114.515.115.973.6158.9Corps of Engineers���������������������������������������������������������������5.34.65.44.94.74.64.74.823.649.3Environmental Protection Agency���������������������������������������7.67.210.310.09.48.88.68.545.489.0General Services Administration����������������������������������������0.65.90.60.70.60.60.60.73.26.8National Aeronautics and Space Administration���������������17.81.018.719.019.420.020.621.0100.0212.7National Science Foundation�����������������������������������������������6.53.06.97.47.88.38.99.541.996.9Small Business Administration�������������������������������������������0.60.70.81.01.00.90.91.04.89.9Social Security Administration7�������������������������������������������8.51.19.310.110.510.911.411.754.7117.6Corporation for National and Community Service�������������0.90.21.21.41.72.02.32.610.026.9Other Agencies���������������������������������������������������������������������18.60.319.420.219.218.619.119.596.6202.0Subtotal, Non-Security Discretionary Budget Authority....354.1253.1392.1386.4437.1399.4416.0428.72,067.64,382.5THE BUDGET FOR FISCAL YEAR 2011 

### 175Table S–11.Funding Levels for Appropriated (“Discretionary”) Programs byAgency1—Continued(Budgetary resources in billions of dollars)2009 Actual2010Enacted2011RequestTotalsNon-ARRAARRA220122013201420152011–20152011–2020Subtotal, Non-Security Discretionary BudgetaryResources..............................................................................407.8253.1446.3441.3446.4446.2459.1472.32,265.24,788.9Other Discretionary Funding (not included above):Overseas Contingency Operations8....................................145.9.....130.0159.350.050.050.050.0359.3609.3Defense����������������������������������������������������������������������������������145.7.....129.6159.150.050.050.050.0359.1609.1Homeland Security���������������������������������������������������������������0.3.....0.20.3....................0.30.3Justice�����������������������������������������������������������������������������������..........0.1...................................Other Enacted Supplemental or Emergency Funding...44.1.....0.4...................................Agriculture����������������������������������������������������������������������������1.4.....0.4...................................Energy��������������������������������������������������������������������������������������������������7.9.............................................Health and Human Services������������������������������������������������10.5.............................................State and Other International Programs����������������������������13.8.............................................Department of Transportation���������������������������������������������3.0.............................................Corps of Engineers-Civil Works�������������������������������������������6.6.............................................Other Agencies����������������������������������������������������������������������0.9.....-*...................................Proposed 2010 Supplemental Funding........................................41.1...................................Defense (includes Overseas Contingency Operations)���������..........33.0...................................Homeland Security���������������������������������������������������������������..........3.6...................................State and Other International Programs����������������������������..........4.5...................................Grand Total, Discretionary Budget Authority.......................1,194.2265.11,247.31,265.01,234.61,218.11,255.71,292.66,266.013,231.2Grand Total, Discretionary Budgetary Resources...............1,248.0265.11,301.51,319.81,243.91,264.91,298.81,336.26,463.613,637.6* $50 million or less.1Although the Budget shows discretionary funding in nominal terms, the Administration conceives of discretionary growth rates in inflation-adjusted terms.If inflationprojections are revised from what is currently projected, future budgets would be expected to adjust funding levels up or down accordingly.(This statement does not applyto funding growth between 2010 and the 2011 budget year, since the appropriations process for 2011 must begin immediately and before inflation assumptions will berevisited.It also does not apply to the outyear BA for overseas contingency operations, which is a placeholder and does not represent a policy determination.)2“ARRA” refers to the American Recovery and Reinvestment Act of 2009 (P.L.111-5).3The DHS level includes $1.8 billion for BioShield in 2009 and a -$3.0 billion transfer in 2010 of BioShield balances to HHS.4The Veterans Affairs total is net of medical care collections.5The Security category for State and Other International Programs is comprised entirely of International Function 150.This includes funding for International Food Aidprograms in the Department of Agriculture.6Adjusted for advance appropriations, 2009 funding for the Department of Education is $46.2 billion.All numbers exclude funding for Pell Grants.7Funding from the Hospital Insurance and Supplementary Medical Insurance trust funds for administrative expenses incurred by the Social Security Administration thatsupport the Medicare program are included in the HHS total and not in the Social Security Administration total.Additionally, the HHS total includes $0.4 billion and$3.0 billion in 2009 and 2010, respectively, for transfer of the BioShield program in DHS.8The Budget includes placeholder estimates of $50 billion per year for Overseas Contingency Operations in 2012 and beyond.These estimates do not reflect any specificpolicy decisions.

### 176 SUMMARY TABLESTable S–12.Market Valuation and Balance Sheet of Fannie Mae and Freddie Mac(In billions of dollars)2008200920102011201220132014201520162017201820192020Totals2011-20152011-2020Transactions between Treasury andFannie Mae/Freddie Mac:Senior Preferred Liquidity Payments to FannieMae/Freddie Mac���������������������������������������������������.....966923.............................................2323Senior Preferred Dividend Payments from FannieMae/Freddie Mac��������������������������������������������������.....–4–12–18–7–7–7–7–7–7–7–7–7–44–78Net Payments�����������������������������������������������������.....91575–7–7–7–7–7–7–7–7–7–21–55Market Valuation of Fannie Mae and FreddieMac:Market Value of Net Liability����������������������������������–18–18Value of Private Equity Shares��������������������������������–3–3Net Position of Fannie Mae and Freddie Mac:Assets:U.S.Treasury Securities�������������������������������������.....12Other Financial Assets���������������������������������������1,5241,579Cash��������������������������������������������������������������������115110Other�������������������������������������������������������������������6354Liabilities:Debt Outstanding�����������������������������������������������1,6151,607Other Financial Liabilities���������������������������������������90155Equity:Treasury Senior Preferred Stock�����������������������.....96Private Equity����������������������������������������������������–4–101Net Position���������������������������������������������������–4–5THE BUDGET FOR FISCAL YEAR 2011 

### 177Table S–13.Economic Assumptions(Calendar years)2008ActualProjections200920102011201220132014201520162017201820192020Gross Domestic Product (GDP):Nominal level, billions of dollars��������������������14,44114,25214,76815,51416,44417,43318,44619,43320,40821,37322,32923,31224,323Percent change, nominal GDP, year/year�������2.6–1.33.65.16.06.05.85.35.04.74.54.44.3Real GDP, percent change, year/year������������0.4–2.52.73.84.34.24.03.63.22.82.62.52.5Real GDP, percent change, Q4/Q4�����������������–1.9–0.53.04.34.34.23.93.43.12.72.62.52.5GDP chained price index, percent change,year/year������������������������������������������������������2.11.20.91.21.61.71.71.71.81.81.81.81.8Consumer Price Index1, percent change,year/year.........................................................3.8–0.31.91.52.02.02.02.02.02.12.12.12.1Unemployment rate, civilian, percent2........5.89.310.09.28.27.36.55.95.55.35.25.25.2Interest rates, percent:91-day Treasury bills3�������������������������������1.40.20.41.63.04.04.14.14.14.14.14.14.110-year Treasury notes����������������������������3.73.33.94.55.05.25.35.35.35.35.35.35.3Note: A more detailed table of economic assumptions is in Chapter 2, “Economic Assumptions,” in theAnalytical Perspectivesvolume of the Budget, Table 2–1.1Seasonally adjusted CPI for all urban consumers.2Annual average.3Average rate, secondary market (bank discount basis).

### 178 SUMMARY TABLESTable S–14.Federal Government Financing and Debt(In billions of dollars)2009Estimate20102011201220132014201520162017201820192020Financing:Unified budget deficit�������������������������������������������������������������������������������1,4131,5561,2678287277067527787787859081,003Other transactions affecting borrowing from the public:Changes in financial assets and liabilities:1Change in Treasury operating cash balance2�����������������������������–96–5–200.............................................Net disbursements of credit financing accounts:Direct loan accounts���������������������������������������������������������������293210143135118108997085799191Guaranteed loan accounts������������������������������������������������������7–7812126431–2–4–6Troubled Asset Relief Program (TARP) equity purchaseaccounts������������������������������������������������������������������������������1051–15–*–2–5–5–5–9–11–26–16Net purchases of non-Federal securities by the NationalRailroad Retirement Investment Trust (NRRIT)�������������������–3–1–1–1–1–1–1–1–1–1–1–1Net change in other financial assets and liabilities3�����������������22.......................................................Subtotal, changes in financial assets and liabilities�������������329198–66146127109986776656069Seigniorage on coins��������������������������������������������������������������������������–*–*–*–1–1–1–1–1–1–1–1–1Total, other transactions affecting borrowing from thepublic�����������������������������������������������������������������������������������329197–66145126108976775645968Total, requirement to borrow from the public (equalschange in debt held by the public)�������������������������������1,7421,7531,2019748548148498448538499671,071Changes in Debt Subject to Statutory Limitation:Change in debt held by the public�����������������������������������������������������������1,7421,7531,2019748548148498448538499671,071Change in debt held by Government accounts���������������������������������������148158157218264265302309321337285256Change in other factors���������������������������������������������������������������������������4–2–111111111–*Total, change in debt subject to statutory limitation����������������������1,8931,9091,3571,1931,1191,0791,1521,1551,1761,1871,2531,327Debt Subject to Statutory Limitation, End of Year:Debt issued by Treasury��������������������������������������������������������������������������11,85013,76015,11716,30817,42618,50519,65620,80921,98423,17124,42425,751Adjustment for discount, premium, and coverage4��������������������������������322456788999Total, debt subject to statutory limitation5��������������������������������������11,85313,76215,11916,31217,43118,51119,66220,81721,99323,18024,43325,760Debt Outstanding, End of Year:Gross Federal debt:6Debt issued by Treasury�������������������������������������������������������������������11,85013,76015,11716,30817,42618,50519,65620,80921,98423,17124,42425,751Debt issued by other agencies����������������������������������������������������������262727272728282827262626Total, gross Federal debt�������������������������������������������������������������11,87613,78715,14416,33617,45318,53219,68320,83722,01123,19724,45025,777Held by:Debt held by Government accounts�������������������������������������������������4,3314,4894,6464,8645,1285,3935,6956,0046,3256,6636,9487,204Debt held by the public7��������������������������������������������������������������������7,5459,29810,49811,47212,32613,13913,98814,83315,68616,53517,50218,573THE BUDGET FOR FISCAL YEAR 2011 

### 179Table S–14. Federal Government Financing and Debt—Continued(In billions of dollars)2009Estimate20102011201220132014201520162017201820192020Debt Held by the Public Net of Financial Assets:Debt held by the public����������������������������������������������������������������������������7,5459,29810,49811,47212,32613,13913,98814,83315,68616,53517,50218,573Less financial assets net of liabilities:Treasury operating cash balance2����������������������������������������������������27527070707070707070707070Credit financing account balances:Direct loan accounts��������������������������������������������������������������������4897008429771,0951,2041,3031,3731,4581,5371,6281,719Guaranteed loan accounts�����������������������������������������������������������–35–42–34–22–10–4*352–2–7TARP equity purchase accounts�������������������������������������������������10510691918984807566552913Government-sponsored enterprise preferred stock�������������������������65102115115115115115115115115115115Non-Federal securities held by NRRIT��������������������������������������������222120191817161413121110Other assets net of liabilities������������������������������������������������������������–24–24–24–24–24–24–24–24–24–24–24–24Total, financial assets net of liabilities���������������������������������������8981,1331,0801,2271,3531,4621,5601,6271,7031,7681,8271,896Debt held by the public net of financial assets���������������������6,6478,1649,41810,24610,97211,67712,42813,20513,98314,76715,67516,677Note: Figures displayed in the table do not reflect the impact of any recommendations from the Fiscal Commission.* $500 million or less.1A decrease in the Treasury operating cash balance (which is an asset) is a means of financing a deficit and therefore has a negative sign.An increase in checksoutstanding (which is a liability) is also a means of financing a deficit and therefore also has a negative sign.2Includes assumed Supplementary Financing Program balance of $200 billion on September 30, 2010, and zero on September 30, 2011, and beyond.3Besides checks outstanding, includes accrued interest payable on Treasury debt, uninvested deposit fund balances, allocations of special drawing rights, and other liabilityaccounts; and, as an offset, cash and monetary assets (other than the Treasury operating cash balance), other asset accounts, and profit on sale of gold.4Consists mainly of debt issued by the Federal Financing Bank (which is not subject to limit), debt held by the Federal Financing Bank, the unamortized discount (lesspremium) on public issues of Treasury notes and bonds (other than zero-coupon bonds), and the unrealized discount on Government account series securities.5The statutory debt limit is $12,394 billion, as enacted on December 28, 2009.6Treasury securities held by the public and zero-coupon bonds held byGovernment accounts are almost all measured at sales price plus amortized discount or lessamortized premium.Agency debt securities are almost all measured at face value.Treasury securities in the Government account series are otherwise measured at facevalue less unrealized discount (if any).7At the end of 2009, the Federal Reserve Banks held $769.2 billion of Federal securities and the rest of the public held $6,775.5 billion.Debt held by the Federal ReserveBanks is not estimated for future years.181 

### A

Katherine D. Aaby

Andrew Abrams

Chandana Achanta Karl Agcaoili Brenda Aguilar Shagufta I. Ahmed

Steven D. Aitken Jameela Raja Akbari

Robert Alderfer

David Alekson

Lois E. Altoft

Scott J. Anchin

Lucas J. Anderson

Robert B. Anderson

Kevin Archer Anna R. Arroyo

Katherine T. Astrich Lisa L. August

Laura G. Auletta

Renee Austin

Shawn D. Azman



### B

Peter Babb

Kenneth S. Baer

Elizabeth A. Bafford

Paul W. Baker

Carol Bales

Preeta D. Bansal

John W. Barkhamer

Patti Barnett

Carl Barrick Jody Barringer

Tali Bar-Shalom Mary C. Barth

Julie Basile Nancy B. Beck Jennifer Wagner Bell

Stuart Bender Lindsey R. Berman

Elizabeth Bernhard Boris Bershteyn

Catherine Bloniarz

Mathew C. Blum

James Boden Melissa B. Bomberger

Debra Bond

Dan Bonesteel Edward P. Borrego

David S. Bortnick

Constance J. Bowers Bill Boyd Wyatt Boyd Chantel M. Boyens Betty I. Bradshaw

Joshua J. Brammer Shannon Bregman Xavier D. Briggs Brooke Brody-Waite

Mark Brooks

Charles H. Brown

Dustin S. Brown

James A. Brown

Jennifer E. Brown Kelly D. Brown Emily P. Brownlow

Michael Brunetto Ryan J. Bubb Paul Bugg

Joshua Bull

Tom D. Bullers Robert B. Bullock Benjamin Burnett

John D. Burnim

John C. Burton

Rachel A. B. Burton

Mark Bussow



### C

Kathleen Cahill

Steven Cahill Philip T. Calbos

Mark F. Cancian

Anna Canfield Christa Capozzola

Kara K. Cardinale

Eric D. Cardoza

J. Kevin Carroll Randy J. Caruso Mary I. Cassell David Cassidy Benjamin Chan

Daniel E. Chandler

Alan Chao

James Chase Anita Chellaraj Lingjiao Chen Shawn Choy

Michael C. Clark

Allison Leah Cole

John J. Colleran

Debra M. Collins Nicole E. Comisky David C. Connolly Ryan H. Cooper Matthew Coryell

Daniel Costello Kelly T. Coylar

Catherine Crato Joseph Crilley

Rosemarie C. Crow Michael F. Crowley Craig Crutchfield

Edna T. Falk Curtin C. Tyler Curtis

William P. Curtis



### D

Michael D’Amato Veronica Daigle Neil Danberg

J. Michael Daniel Kristy L. Daphnis Michael P. Darling

A. James Daumit Joanne Davenport

Garrick DavisMargaret B. DavisChristian

Anne M. Decesaro

Deanna DeMott

Carol R. Dennis Alyssa Denzer

G. Edward DeSeve

Samantha L.

Deshommes Cynthia Diamond John H. Dick, Jr.

Frank DiGiammarino Angela Donatelli

Paul Donohue Bridget C. E. Dooling Shamera Dorsey 

# OMB CONTRIBUTORS TO THE 2011 BUDGET

The following personnel contributed to the preparation of this publication. Hundreds, perhaps thousands, of others throughout the Government also deserve credit for their valuable contributions.182 LIST OF CONTRIBUTORS

Vishal D. Doshi Audrey L. Duchesne

Laura Duke Van Duong Louise Dyer



### E

Jacqueline A. Easley Eugene M. Ebner

Mabel E. Echols

Jeanette Edwards Emily M. Eelman

Katherine A. Eltrich

Zeke Emanuel

Gene Emmans Noah Engelberg Michelle A. Enger Leandra English

Elizabeth Erickson

Kristofor Erickson Sally Ericsson

Dinée Eriksen Giannina Espichan Victoria Espinel Suzann K. Evinger

Rowe Ewell



### F

Chris Fairhall

Robert S. Fairweather

Michael C. Falkenheim Kim Farington Kara Farley-Cahill

Dick Feezle

Nicole A. Fernandes

Patricia A. Ferrell Lesley A. Field

Jessica Finkel Alyssa D. Fisher E. Holly Fitter Mary E. Fitzpatrick Michael A. Fitzpatrick Darlene B. Fleming

Michael P. Flood Tera Fong

Keith Fontenot

Kim Ford James Ford-Fleming Emily Fort Peggy Fouts

Nicholas A. Fraser

Farrah Freis Nathan J. Frey Michael Friedberg



### G

Marc Garufi

Thomas E. Gavin Darcel D. Gayle

Jennifer Gera Bassam F. Gergi

Michael D. Gerich

Brian W. Gill

Brian Gillis

David Glaudemans

Joshua Glazer Kimberly Glenn Adam Goldberg Robert Goldberg Jeffrey Goldstein

Oscar Gonzalez

Dan Gordon

Robert M. Gordon

Andrew Grandison

Melissa Green

Richard E. Green Aron Greenberg

Lisa Greenwood Fumie Y. Griego Hester Grippando Rebecca Grusky



### H

Michael B. Hagan Susan Haggerty Christopher C. Hall

Kathleen D. Hamm

Eric V. Hansen

Linda W. Hardin Dionne M. Hardy

David Harmon Patsy Harris Brian Harris-Kojetin Nicholas R. Hart Luke Hartig Paul Harvey

David J. Haun

Florence Hawald Mark H. Hazelgren Pamela L. Heijmans Gregory G. Henry

Kevin W. Herms

Jessica R. Hertz Michael Hickey Beth Higa Cortney J. Higgins Mary Lou Hildreth Jeffrey C. Hilliard

Leslie K. Hinchman

Andrew Hire

Jennifer Hoef

Joanne Cianci Hoff Adam Hoffberg

Stuart Hoffman

Michael J. Howell

Grace Hu Kathy M. Hudgins Carrie A. Hug Tammy S. Hughes Jeremy D. Hulick

James Hundt

Alexander T. Hunt

Lorraine D. Hunt

James C. Hurban Jaki Mayer Hurwitz Kristen D. Hyatt



### I

Tae H. Im



### J

Laurence R. Jacobson

Dana M. James

Carol D. Jenkins Christopher S. Johns

Barbara A. Johnson

Carol Johnson

Kim A. Johnson

Kim I. Johnson

Kristen Johnson Michael D. Johnson Bryant A. Jones

Denise B. Jones

Lisa M. Jones

Scott W. Jones

James F. Jordan

James J. Jukes

Hee K. Jun



### K

Julie A. Kalishman

David C. Kamin Amy Kaminski Jacob H. Kaplan Irene B. Kariampuzha

Jenifer Karwoski Regina Kearney

Matthew J. Keeneth John W. Kelly Kenneth S. Kelly

Ann H. Kendrall Nancy Kenly

Paul E. Kilbride Timothy Kim Barry D. King Heidi R. King Kelly Kinneen

Carole Kitti Ben Klay

Sarah B. Klein

Melissa A. Kline Richard L. Kogan Emily M. Kornegay

Steve M. Kosiak

Constantine Koulouris

John Kraemer

Lori A. Krauss Caroline Krency

Kristi Kubista-Hovis Divya Kumaraiah

Vivek Kundra Joydip Kundu Christine J. Kymn



### L

Leonard L. Lainhart James A. LaityTHE BUDGET FOR FISCAL YEAR 2011 183

Chad A Lallemand

Lawrence L. Lambert

Daniel LaPlaca

Eric P. Lauer

Kristen Lauer

Jessie LaVine

Michael Lazzeri

Amanda I. Lee

David Lee

Jane K. Lee

Jessica Lee

Nicholas Lee

Richard Lee

Sarah S. Lee

Sun H. Lee

Susan Leetmaa M. Bryan Legaspi Christine M. Leininger

Stuart Levenbach

Ariel D. Levin

Shoshana M. Lew

Sheila D. Lewis Wendy Liberante

Richard A.

Lichtenberger Jeffrey B. Liebman

Elizabeth K. Lien Suzanne Lightman Tung-Yen Lin

Lin C. Liu

Patrick G. Locke Aaron M. Lopata Marta M. Lopez

Adrienne C. Erbach

Lucas Kimberley Luczynski Sarah Lyberg Randolph M. Lyon



### M

Debbie Macaulay Ryan MacMaster

John S. Macneil Anish Mahajan

Natalia Mahmud Neale A. Mahoney

Mikko Makarainen Margaret A. Malanoski Dominic J. Mancini

Kate Mann Meagan Mann

Sharon Mar

Celinda A. Marsh

Brendan A. Martin Kathryn Martin

Rochelle Wilkie

Martinez Surujpat J. Adrian

Mathura

Karen Yoshiko

Matsuoka Shelly McAllister

Karen R. McBride Emily M. McCartan Erin McCartney

Alexander J.

McClelland Anthony W. McDonald

Christine McDonald

Katrina A. McDonald

Renford McDonald

Carl McGruder

Matthew McKearn Christopher McLaren Robin J. McLaughry Alex McPhillips William J. McQuaid

William J. Mea Andrew Medley

Inna L. Melamed

Karen C. Melanson

Gordon B. Mermin

Richard A. Mertens

Steven M. Mertens Margaret M. Mesaros

Justin R. Meservie

P. Thaddeus

Messenger Shelley Metzenbaum

Julie V. Middleton Laurie A. Mignone

Joanna Mikulski Caitlyn Miller

Julie L. Miller Kimberly Miller

Joe Montoni Jeremy L. Moon Jamesa C. Moone

David A. Morris

Jonathan D. Morse Jane T. Moy Jennifer W. Murray

Chris Music



### N

Robert L. Nabors Jennifer Nading Jeptha E. Nafziger Larry Nagl Barry Napear

Erica Navarro Michael A. Negron Kimberly Nelson Betsy Newcomer

John Newman Kimberly A. Newman Kevin F. Neyland Teresa Nguyen Abigail P. Norris Douglas A. Norwood



### O

Erin O’Brien

Kathleen E. O’Connell

Erin M. O’Keefe

Marvis G. Olfus Farouk Ophaso Peter R. Orszag

Jared Ostermiller Tyler J. Overstreet

Pearson Owens



### P

Ben Page Brandye N. Page Rasik Pandey Louis Pappas Sangkyun Park

Joel R. Parriott John Pasquantino

Arati Patel

Melissa N. Patterson

Kshemendra N. Paul Terri B. Payne Jacqueline M. Peay Falisa L. Peoples-Tittle

Kathleen Peroff

Andrew B. Perraut

Andrea M. Petro

John R. Pfeiffer Stacey Que-Chi Pham Carolyn R. Phelps

Karen A. Pica Joseph T. Pika Joseph G. Pipan

Alisa M. Ple-Plakon

Ruxandra I. Pond Celestine M. Pressley Jamie Price Pressly Marguerite Pridgen Robert B. Purdy Michael J. Pyle



### Q

John P. Quinlan



### R

Lucas R. Radzinschi

Latonda Glass Raft Ganeshkumar B. Raju Maria Raphael Peter J. Ray

McGavock D. Reed

Paul B. Rehmus Thomas M. Reilly

Richard J. Renomeron

Keri A. Rice

M. David Rice Renee Richburg

Shannon Richter Earl W. Rilington, Jr. Crystal Roach Benjamin Roberts

John S. Roberts

Donovan O. Robinson Marshall Rodgers Teresa Canton Rojas Meredith Romley

Dan T. Rosenbaum

Adam J. Ross184 LIST OF CONTRIBUTORS

David Rostker

David Rowe Mario D. Roy Jonathan Rupp Ross A. Rutledge Rexon Y. Ryu



### S

Fouad P. Saad

John Asa Saldivar

Dominic K. Sale

Erika Saleski

Hana Sarsour Narahari Sastry Ryan J. Schaefer

Erik K. Scheirer Caryn Schenewerk

Jill Schiller

Evan Schlom

Tricia Schmitt

Andrew M. Schoenbach Ingrid M. Schroeder Margo Schwab

Candice M. Schwartz Nancy Schwartz

Jasmeet K. Seehra

Nirav Shah

Shahid N. Shah Emily L. Sharp Dianne Shaughnessy

Paul Shawcross Kathryn D. Sheehey

Rachel C. Shoemate

R. Jacob Shuler Mary Jo Siclari Sarah S. Siddiqui Matthew J. Siegel

Sara R. Sills Angela M. Simms Robin Sinquefield Jack A. Smalligan

Curtina O. Smith Gayle E. Smith

Jan Smith

Jennifer Smookler

Joanne Snow

Silvana Solano Leo Sommaripa Lillian S. Spuria Kathryn B. Stack Scott Stambaugh

Andrea M. Staron Henry Stawski

Nora Stein

Charlie Stern

Catherine L. Stewart Gary Stofko

Carla B. Stone

Justin Streufert

Shannon Stuart

Tom Suarez

Alice Suh Stephen Suh

Kevin J. Sullivan

Jessica Sun

Cass R. Sunstein



### T

Teresa A. Tancre Benjamin K. Taylor

Richard P. Theroux

LaTina Thomas Payton Thomas Courtney B.

Timberlake

Bruce D. Timman

Thomas Tobasko

Richard Toner Anne M. Toomey

Gilbert Tran Gregg Treml

Susan M. Truslow Gretchen Trygstad

Donald L. Tuck

Grant Turner



### U

Darrell J. Upshaw



### V

Matthew J. Vaeth

Ofelia M. Valeriano Cynthia A. Vallina Uday Varadarajan

Areletha L. Venson

Alexandra Ventura

Mark Vinkenes

Patricia Vinkenes

Dean Vonk Kathy Voorhees

Ann M. Vrabel



### W

James A. Wade Emily Waechter Ted Wainwright

Richard K. Wall

Martha A. Wallace

Katherine K. Wallman

Heather V. Walsh

Ali Wardle LaTonya R. Ware

Sharon A. Warner Gary S. Washington Gary Waxman Mark A. Weatherly

Bessie M. Weaver Jean Weinberg Jeffrey A. Weinberg Maggie Weiss Philip R. Wenger

Daniel Werfel

Arnette C. White

Kamela White

Kim S. White

Sherron R. White

Sarah Widor Mary Ellen Wiggins

Debra L. Williams Monique C. Williams Tommy Williams

Jennifer Winkler

Brian C. Winseck

Melanie Winston

Julia B. Wise

Julie A. Wise Daryl Womack Chantale Wong Daren Wong Raymond Wong Lauren Wright Sophia Wright



### X

Xiao Ling Xu



### Y

Melany N. Yeung



### Z

Ali A. Zaidi

Jeff Zients

Gail S. Zimmerman

Rachel Zinn

## Budget of the U.S. Government, FY 2011 Stock number: 041-001-00671-1 ISBN number: 978-0-16-084795-0 Price: $37.00

Appendix-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00672-9 ISBN number: 978-0-16-084796-7 Price: $73.00

Historical Tables-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00673-7 ISBN number: 978-0-16-084797-4 Price: $49.00

Analytical Perspectives-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00674-5 ISBN number: 978-0-16-084798-1 Price: $52.00

The Federal Budget on CD-ROM-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00675-3 ISBN number: 978-0-16-084799-8 Price: $25.00

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The Federal Budget on CD-ROM-Budget of the U.S. Government, FY 2011 041-001-00672-9

041-001-00673-7

041-001-00675-3 Analytical Perspectives-Budget of the U.S. Government, FY 2011 041-001-00674-5 ISBN Number

978-0-16-084795-0

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978-0-16-084797-4

978-0-16-084798-1

978-0-16-084799-8 $25.00 $37.00

$73.00

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$52.00

Check Method of Payment

## Budget of the U.S. Government, FY 2011 Stock number: 041-001-00671-1 ISBN number: 978-0-16-084795-0 Price: $37.00

Appendix-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00672-9 ISBN number: 978-0-16-084796-7 Price: $73.00

Historical Tables-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00673-7 ISBN number: 978-0-16-084797-4 Price: $49.00

Analytical Perspectives-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00674-5 ISBN number: 978-0-16-084798-1 Price: $52.00

The Federal Budget on CD-ROM-Budget of the U.S. Government, FY 2011 Stock number: 041-001-00675-3 ISBN number: 978-0-16-084799-8 Price: $25.00

Order Processing Code:

3555 Easy Secure Internet: bookstore.gpo.gov Toll Free: 866 512–1800

DC Area: 202 512–1800

Fax: 202 512–2104 Mail: US Government Printing Oce

P.O. Box 979050
St. Louis, MO 63197–9000

Qty Stock Number Publication Title Unit Price Total Price

Check payable to Superintendent of Documents

SOD Deposit Account

VISA MasterCard Discover/NOVUS American Express

(EXPIRATION DATE Total Order

AUTHORIZING SIGNATURE 01/10 Personal Name (Please type or Print)

Company Name

Street Address

City, State, Zip Code

Daytime Phone Including Area Code Budget of the U.S. Government, FY 2011 041-001-00671-1

Thank you for your order! Appendix-Budget of the U.S. Government, FY 2011

Historical Tables-Budget of the U.S. Government, FY 2011

The Federal Budget on CD-ROM-Budget of the U.S. Government, FY 2011 041-001-00672-9

041-001-00673-7

041-001-00675-3 Analytical Perspectives-Budget of the U.S. Government, FY 2011 041-001-00674-5 ISBN Number

978-0-16-084795-0

978-0-16-084796-7

978-0-16-084797-4

978-0-16-084798-1

978-0-16-084799-8 $25.00 $37.00

$73.00

$49.00

$52.00

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