Alaska may feel sting of U.S. budget cuts

The Anchorage Daily NewsMay 8, 2009 

Alaska's Denali Commission, one of the untouchable programs championed in former Sen. Ted Stevens' era, took a hit in the federal budget cuts suggested Thursday by President Barack Obama.

The president's budget, which outlines White House spending priorities for 2010, proposes to cut or terminate 121 government programs for a savings of $17 billion. The cuts are just 1 percent of the proposed $3.55 trillion spending plan, which begins Oct. 1.

The budget also cuts the Alaska Native Villages program, which gives communities grants to construct new or improved drinking water and wastewater systems. The administration cited management problems with the existing program and an effort to increase the money spent on other, more effective, programs to achieve similar goals.

The proposed cuts to Alaska programs, which also reduce proposed spending on the missile defense facilities at Fort Greely, drew criticism from Alaska's congressional delegation and Gov. Sarah Palin.

The cuts include three Denali Commission programs: $6 million in transportation spending, $20 million for health clinic construction, and $3 million for job training program. The Denali Commission, a federal-state agency long championed by Stevens, was created to funnel money into infrastructure projects in rural Alaska.

The Denali Commission's transportation spending is "over and above" the formulas states already use to address transportation priorities, according to documents released Thursday by the president's Office of Management and Budget. The OMB called the Denali job training program "duplicative," saying there's "little information to determine whether these initiatives are producing positive results."

That's simply not true, said Krag Johnsen, chief operating officer of the Denali Commission.

"That's inaccurate," Johnsen said. "We have tracked the increases in wages and employment of those that we train, and we have had remarkable success in increasing employment of those that we train and increasing wages of those that we train."

Like the Denali Commission, many of the programs on the president's hit list are perennial targets in presidential budgets that, with Congressional intervention, manage to survive.

Stevens is no longer around to influence the budget process as a senior appropriator, but it looks like the delegation will step in to take his place. Thursday evening, Republican Sen. Lisa Murkowski, Democratic Sen. Mark Begich and Republican Rep. Don Young chimed in with a joint statement opposing the Alaska cuts.

"While the President's budget keeps the Denali Commission alive, it cuts to the bone the commission's ability to continue its vitally needed role," Murkowski said. "For Alaska's Native people, these unwelcome changes are a nightmare, not changes that we can believe in."

The Obama administration also proposes to cut $524 million from the ground-based missile defense program, saying there are problems about the effectiveness of the system. Alaska-based missile interceptors will remain in place, but the program will not expand; no additional missile interceptors will be added.

"North Korea announced they are continuing nuclear and missile testing and Iran continues with their nuclear program, but through this budget proposal, the president wants to stop production of least 14 interceptors and their placement at Fort Greely?" Young said.

"I want to reassure Alaskans that these are just proposals and not the law and I will continue to work with my colleagues on both sides of the aisle to ensure that our great state is taken care of," Young said. "The administration is playing politics with the budget by cutting small items they think they can get away with as opposed to the larger social programs they are trying to force upon us."

In a written statement, Palin also criticized the cuts. "These budget cuts add up to about half of 1 percent," she said. "But while they do little to put brakes on the exploding federal deficit, they hit Alaska hard."

Palin called the missile-defense cuts "outrageous" in a time when North Korea is defiantly testing missiles.

The 10-year-old Denali Commission has seen past presidents attempt to chip away at its budget, Johnsen said, so the agency is prepared to fight for its survival. Already, Begich has moved to sidestep the president's budget. He inserted into the Senate version of the budget an amendment that sets funding for the Denali Commission at the 2006 level of $150 million.

Begich said he applauded the president's efforts to "eliminate unnecessary spending," but that the Denali Commission was the wrong place to do it.

"Unfortunately, some of the cuts proposed, which would affect vital Alaska programs, show the lack of understanding federal budget writers have about our state and its needs," he said.

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