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The Honolulu Advertiser
Updated at 1:38 p.m., Thursday, May 7, 2009

Obama budget sends money to Islands and preserves military spending

By John Yaukey
Advertiser Washington Bureau

WASHINGTON — The $3.6 trillion budget request that President Barack Obama sent Congress today contains education, transportation and housing funds for Hawaii — including $298 million for military construction — while also sparing the state from targeted defense cuts.

The transportation portion of the budget includes $20 million for a commuter rail project in Honolulu and $4 million to test the viability of interisland ferryboat routes and technologies.

The budget would also invest $45.2 million in state and local educational initiatives throughout Hawaii aimed at strengthening student achievement in low-income areas.

It would provide $12.4 million for the state's school breakfast program and $55 million for its school lunch program.

Under Obama's plan, domestic spending would grow about 7 percent while defense would increase 4 percent to $533 billion.

But to offset a small fraction of the increases, Obama highlighted 121 programs that he wants to eliminate or reduce - with more than half the savings coming from defense.

Most of his targeted defense cuts would be to expensive weapons systems such as the F-22 fighter jet and the C-17 cargo plane, which are not produced in Hawaii.

"Funding for big-ticket items such as the F-22 fighter planes is being curtailed or terminated to free up funds for health care commitments for our soldiers, families and retirees," said Rep. Neil Abercrombie, D-Hawaii, a senior member of the Armed Services Committee.

Moreover, the budget - certainly as it pertains to Hawaii - promises to look quite different when it's finally passed months from now with significant input from Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii.

Inouye's considerable influence in federal spending largely led to Hawaii's windfall of several hundred million dollars in the $787 billion economic recovery package passed earlier this year.

Obama's budget proposal includes more than $1.2 trillion in funds that must be appropriated by Congress, including big increases in health care, energy and education.

"The president has made his budget clear," said Rep. Mazie Hirono, D-Hawaii. "Congress will now review the budget line-by-line to make sure in conforms with our priorities."

Inouye today deferred comment on Obama's budget request until he's had a chance to digest the 1,374-page document.

For Hawaii's roughly 57,000 military personnel, the budget request includes a pay raise of 2.9 percent and an increase in benefits that "keeps pace with or exceeds those of the private sector," according to the budget.

For Hawaii's 118,000 veterans, the budget plan would let retirees receiving pensions have access to disability payments, which many are now largely denied.

At a briefing today, Pentagon officials said they would fully fund the military's Tricare healthcare system, meaning no increases in out-of-pocket expenses for 2010.

During each of the last three years of the Bush administration, the Pentagon tried to raise Tricare fees. But Congress rejected the increases and added the money back into the defense budget each time.

Still, Pentagon officials warned today that military healthcare costs — like those in the civilian sector — are rapidly rising and must be contained in future defense budgets.

The Pentagon is projected to spend roughly $47 billion on healthcare in fiscal 2010, making it the fastest-growing part of the defense budget.

"At some point we need to work with the Congress to end the freeze on increases in co-pays and premiums," Pentagon Comptroller Robert Hale said today at a budget briefing.