Budget and Appropriations Update

Blog Post
Monday, August 02, 2010

Below are several developments we have been following since the last edition of the Washington Budget Report (sign up here) was published.

FY 2011 APPROPRIATIONS:  Prior to departing for the August recess, the House passed the first two FY 2011 appropriations bills. The Military Construction-Veterans Affairs bill passed by a vote of 411-6 and the Transportation-HUD bill passed by a vote of 251-167. House subcommittees reported the Defense bill and the Financial Services-General Government bills. All twelve House subcommittees have now reported their bills. Full committee markups of the Homeland Security and Agriculture bills originally scheduled for last week were postponed and were not held before the recess. In the Senate, subcommittees and the full committee completed action on the State-Foreign Operations, Labor-HHS-Education, and the Financial Services-General Government bills. The full Senate has not yet considered any of the FY 2011 bills. The Senate also has not yet acted on a deeming resolution that would make the Appropriations Committee's allocations enforceable with budget points of order.  A table showing the status of each of the FY 2011 bills can be found here. While the committees have made considerable progress over the last few weeks, the pace of this year's appropriations process is significantly slower than last year. Prior to last year's August recess, the House completed all of the FY 2010 bills and the Senate completed four of them. The Hill and Congressional Quarterly (subscription required) reported on the effect that concerns about the deficit have had on this year's appropriations process.  

FY 2010 SUPPLEMENTAL APPROPRIATIONS:  Also last week, the House removed a significant piece of unfinished business from its to-do list: the FY 2010 war supplemental. After a protracted and contentious debate that has lasted for much of this year, the House voted 308-114 to pass the Senate version of a bill that will provide $59 billion in emergency spending for military activities in Afghanistan/Iraq and other priorities. The Senate version of the bill did not include the approximately $23 billion in domestic funding and offsets that were initially added by the House. The Obama administration and several senators opposed offsets included in the House bill, such as a rescission from several education grant programs. The bill passed with the support of most of the Republican caucus and the opposition of over a hundred Democrats, including Appropriations Committee Chairman David Obey. Democrats opposing the bill raised concerns about providing additional funding for the war and the absence of the funding for domestic priorities such as education funding for the states. Obey's floor statement opposing the bill can be found here and a summary of the bill can be found hereThe New York Times and USA Today covered the vote. President Obama signed the bill into law last week. Also before the recess, the House passed two bills providing FY 2010 supplemental funding for border security ($701 million) and the Patent and Trademark Office ($129 million). All three supplemental spending bills were considered on the suspension calendar, a procedure which requires a two-thirds vote while also limiting some opportunities for debate and amendment. The Senate passed the Patent and Trademark Office supplemental by unanimous consent, but has not yet acted on the border security supplemental.

LAWMAKERS INTRODUCE BUDGET PROCESS REFORM BILLS: Sen. John Thune introduced legislation (S. 3652) that would make several changes to the existing budget process. Thune's proposal would establish statutory caps on discretionary spending, change the PAYGO law to prevent federal trust funds from being used as an offset, require a binding budget resolution, establish biennial budgeting, create a legislative line item veto, and establish a new Joint Committee on Deficit Reduction. A summary of the proposal is available here. Thune discussed the proposal in an interview on CNBC. Representatives Gabrielle Giffords  and Charles Djou introduced legislation (HR 5954) to require the Office of Management and Budget to regularly compare the actual costs of legislation to the original cost estimates. The bill would also create expedited legislative procedures for proposals to reduce the cost of legislation that becomes more expensive than the original estimate. Giffords and Djou described their proposal in The Hill.  

HEARINGS:  The House Budget Committee held a hearing on the budget implications of the administration's proposal to close the planned Yucca Mountain nuclear waste storage facility. In preparation for the hearing, the Congressional Budget Office released an analysis of the issue and potential costs to the Treasury. The Senate Finance Committee held a hearing to consider the President's nominations to be the public trustees for Social Security and Medicare. The Joint Economic Committee held a hearing on techniques for promoting a clean energy economy. This week the Senate Budget Committee is scheduled to hold a hearing on the status of the economy. 

ALSO IN THE NEWS:  Last Friday was Peter Orszag's last day as director of the Office of Management and Budget. Orszag spoke at a forum at the Brookings Institution and announced that Jeff Zients will serve as acting director until the Senate acts on the Jack Lew nomination. The New York Times reviewed Orszag's tenure at OMB. Editorials in The Washington Post, The New York TimesThe Financial Times, and The Wall Street Journal, assessed recent deficit projections and the stimulus debate from a variety of perspectives. Former OMB Director David Stockman raised concerns about extending the Bush tax cuts and other economic issues. (Stockman served during the Reagan administration and described his experiences in a 1981 Atlantic article that created some controversy at the time). In The Washington Post, Concord Coalition Chief Economist Diane Lim Rogers and other experts also debated the issue of extending the Bush tax cuts. CBO released scores of the House and Senate energy bills and announced that revised deficit projections would be released on August 19th. An article in the Washington Post also described Rep. Paul Ryan's deficit reduction plan and the challenges it has presented for some of his colleagues in the House. The Chicago Tribune reviewed the options Chicago Mayor Richard Daley is considering to address the city's record budget shortfall of over $655 million.