Budget Odds And Ends

There are these little glories tucked into the budget outline, and they all seem to have the same trajectory - marvelous, progressive, and yet not quite good enough for what's needed.

For example, the ending of direct payments to Big Agriculture farmers. This has been sorely needed for years, and yet it's not going to radically alter our food policy, which many say is broken.

The good news (and better than I speculated at ObFo): Bam wants to eliminate direct payment for farmers with SALES greater than $500,000. That will affect a lot more farmers than using income as the basis for a limit. But before you start cheering, know that the administration fully expects the lost subsidy will be replaced by "alternate sources of income from emerging markets for environmental services, such as carbon sequestration, renewable energy production, and providing clean air, clean water, and wildlife habitat." So no worries, Big Ag! The money will continue to flow.

The same distorted crop subsidies will remain as well, making it a fairer system but still not a fixed one.

Then there are the energy cap and trade proceeds - noble, but insufficient (though the Administration could be fudging).

First, the projected revenue seems strikingly low. Partly this is a function of the fact that the targets themselves, particularly in the short term, are fairly weak -- 14 percent under 2005 levels by 2020, 83 percent by 2050. (Sane climate policy would reduce emissions 20 percent below 1990 levels by 2020, at least.)

Still, the proposal explicitly says that the administration expects 100 percent of the permits to be auctioned off. As Kate noted, the CBO estimated (PDF) that "the value of those allowances could total between $50 billion and $300 billion annually (in 2006 dollars) by 2020." The administration's estimate -- $83 billion a year by 2020 -- is well at the bottom end of those projections.

My guess -- apparently confirmed by "senior White House officials" who don't invite me to their conference calls -- is that this is simple conservatism. The inclusion of any carbon revenue at all is sure to spark controversy, so they're simply being cautious not to lay too ambitious a marker.

The bigger question is whether the $15 billion/year investment in clean energy will really tip the economy toward a paradigm shift.

Let me throw in one universally good element: the shuttering of Yucca Mountain.

Washington -- President Obama is taking the first step toward blocking a nuclear waste dump at Nevada's Yucca Mountain by slashing money for the program in his first budget, according to congressional sources.

Obama's budget, which is expected to be announced today, will eliminate nearly all funding for the Yucca project with the exception of money needed for license applications submitted last year to the Nuclear Regulatory Commission, said sources who asked not to be identified because the document has not been made public.

"The Yucca Mountain program will be scaled back to those costs necessary to answer inquiries from the Nuclear Regulatory Commission while the administration devises a new strategy toward nuclear-waste disposal," the Energy Department will say as part of the budget document, the sources said.

This will save close to $80 billion dollars as well as force better solutions to energy than nuclear.

I am genuinely happy with the budget, and in 1993 this would be an incredible document. The problems are just so big right now in 2009, that it may not be enough. But I'm pleased it's even gone this far.