Obama budget mostly good news for New England

President Barack Obama recently unveiled an ambitious budget proposal for fiscal 2013. The president’s plan includes $3.8 trillion in proposed spending and $4 trillion in deficit reduction, with the promise that by 2018, the federal deficit will be less than 3 percent of GDP.
The proposal, which surely will be modified by Congress, offers some valuable insight into the president’s priorities, and the areas where his administration will be focused should he be re-elected.
Let’s start with some good news. Our region’s economy is slowly getting back on track, but we often hear that employers are struggling to find the highly skilled workers they need. So the president’s $8 billion that would encourage businesses and community colleges to work together to train 2 million workers for high-growth industries will surely be a boon for our region.
Also on the higher education front, the Obama budget offers several measures to make college more affordable, which again will help ensure that we have the trained work force we need here in New England. The president’s budget increases the maximum Pell Grant award to $5,635, makes permanent a tax credit for college costs, and sets forth reforms to help address rising education costs by rewarding states and colleges that keep costs under control with a larger share of federal aid.
New England long has been a center of innovation, and such sectors as advanced manufacturing hold great potential for job growth. It is encouraging to hear that the president’s proposal includes $140.8 billion for research and development, increasing the level of investment in nondefense R&D by 5 percent from the previous year’s level. The proposal also expands and makes permanent the R&D tax credit and includes $2.2 billion specifically for advanced-manufacturing R&D.
Another bright spot for New England: the president’s plan would fund a six-year, $476 billion surface-transportation reauthorization bill. New England is burdened with some of the oldest transportation infrastructure in the country, and this funding would provide for much-needed upgrades, while creating thousands of jobs. President Obama’s proposal also creates a National Infrastructure Bank to fund projects of national importance. The New England states are home to a thriving defense industry, as well as a number of bases and military installations. While the president would cut the overall defense budget by some $42 billion, the plan emphasizes developing naval and air capacities to address challenges in the Asia-Pacific region. This would surely benefit many of the defense contractors here in New England that specialize in shipbuilding and aerospace.
However, the cuts include decreasing the overall size of the military, raising concerns that we could see another round of base realignment and closing here in New England. The New England Council was a leader in advocating for our military bases during the last round of base closings, and we are prepared to work with partners throughout the region to fight any closings in the coming years.
An area of President Obama’s budget that is troubling for our region’s health care sector is the $9.7 billion in reductions to graduate medical education, which would reduce Medicare payments to teaching hospitals in New England by more than $430 million over the next decade. The president’s proposal also cuts $177 million for physician training at sites such as Children’s Hospital in Boston.
At the end of the day, New England fares reasonably well under President Obama’s plan. As we continue on the path to economic recovery, it is encouraging to know that the president’s priorities are very much in line with those of our region. &#8226


James T. Brett is the president and CEO of The New England Council, a nonpartisan alliance of public and private organizations throughout New England formed to promote economic growth.

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