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Budget & Appropriations

Legislative Issue Update - June 2008

Budget [updated June 2008]

Much of the time in each Congress is taken up with the budget and appropriations process. In theory and in statute, the President submits his budget to Congress in February, both Houses of Congress pass a Budget Resolution conference report by April 15th and Congress passes the 12 separate appropriations bills by the end of the fiscal year on September 30th.

In reality, Congress has passed all of the appropriations bills by October only three times since 1948. And in 2002, 2004 and 2006 the Congress failed to adopt a Budget Resolution altogether, thus allowing the appropriations bills to be considered without the fiscal discipline that a Budget Resolution is intended to provide.

In both sessions of this Congress, Democrat Leaders succeeded in passing Budget Resolutions, although not until May last year and June of 2008. In both years their Budgets called for spending levels billions of dollars higher than those proposed by President Bush.

The Fiscal 2009 Budget calls for $24.5 billion more in spending than was in President Bush’s request, setting up an inevitable showdown later in the year between Congress and the White House. Only 14 House Democrats opposed the resolution, and no House Republican voted for it. The numbers were similar in the Senate where only two Republicans supported the measure (Maine’s two senators, Susan Collins and Olympia Snowe), and one Democrat (Evan Bayh of Indiana) cast a lone surprising “no” vote.

Of note in this year’s Budget, Congress continues to call for “pay-go” rules to enforce fiscal discipline. Under “pay-go” any spending increase or tax cut must be “paid for” or “offset” by spending cuts or tax increases so the legislation does not increase the deficit. In reality, pay-go rules are invoked only in the effort to block tax cuts; never to offset spending increases. Neither House complied with the pay-go rules last year nor is it clear whether they will do so this year.

The budget also makes several assumptions with respect to tax policy which are covered in this staff report separately.

Appropriations [updated June 2008]

While the Budget Resolution sets the stage for the spending war each year, the actual battles are carried out over the individual appropriations bills which determine not how much money will be spent, but how it will be spent. These bills not only fund the departments and agencies of the Federal government, they also fund the individual spending requests, or “earmarks,” of Members of Congress. The battle over earmarks continues, usually pitting fiscally conservative members against the “cardinals” – senior members of the Appropriations Committee – with no obvious end in sight.

And while adoption of a budget sets the stage for the consideration of the 13 individual appropriations bills (and subsequent fights with the President over the amounts of spending in those bills), it has been many years since Congress actually enacted and the President signed those individual bills into law. In most recent years the Congress has struggled with the appropriations bills, conceding defeat at the end of the legislative session and wrapping most of the spending bills into a single “omnibus appropriations” bill or a “continuing resolution” to continue funding the departments and agencies at the prior year’s level.

This year differs from others only to the extent of the candor in the early discussions. No one is predicting that more than one or two of the individual bills will be enacted; most will never even pass both Houses of Congress much less get through a Conference Committee. Many Congress-watchers believe that Congress will deliberately refrain from sending appropriations bills to the President until after the November elections to avoid a possible show-down with the White House over threatened vetoes of what the President believes to be excess spending.

In fact, in a recent story in a Congressional news publication (Congressional Quarterly, June 16th), House Democrat Leader Steny Hoyer (D-MD) said that while they plan to start action soon on the appropriations bills, he “was not optimistic” that Congress would actually get the bills to the President: “Nobody believes that is a very useful, worthwhile effort,” Hoyer said.