The flow fields from a turbulent channel simulation are used to compute the budgets for the turbulent kinetic energy (k) and its dissipation rate (epsilon). Data from boundary layer simulations are used to analyze the dependence of the eddy-viscosity damping-function on the Reynolds number and the distance from the wall. The computed budgets are used to test existing near-wall turbulence models of the k-epsilon type. It was found that the turbulent transport models should be modified in the vicinity of the wall. It was also found that existing models for the different terms in the epsilon-budget are adequate in the region from the wall, but need modification near the wall. The channel flow is computed using a k-epsilon model with an eddy-viscosity damping function from the data and no damping functions in the epsilon-equation. These computations show that the k-profile can be adequately predicted, but to correctly predict the epsilon-profile, damping functions in the epsilon-equation are needed.