|Overview: 4-Track Budget Process||1st Track: Economic Stimulus Legislation (late Jan/Feb)||2d Track: Completion of FY 2009 Appropriations (Jan/Feb)||3rd Track: FY 2010 Budget (March/April)||4th Track: Stabilizing the Financial, Housing, and Auto sectors (Ongoing)|
The Concord Coalition Washington Budget Report is written and edited by Charles Konigsberg, Chief Budget Counsel of The Concord Coalition.
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Jan. 5: President-Elect Obama meets with Democratic congressional leaders to discuss stimulus package
Jan. 6: House and Senate convene for 111th Congress and begin assembling economic stimulus bill
Jan. 7: CBO releases annual budget and economic outlook (for fiscal years FY 2009 - 2019)
Jan 20: Presidential Inauguration.
Late Jan / Feb: Enactment of economic stimulus bill
Late Jan / Feb: Enactment of remaining FY 2009 appropriations
March 6: Funding for much of the Federal Government expires under the terms of the current continuing resolution (see article below)
March 31: SCHIP runs out of federal funds (State Children's Health Insurance Program)
March/April: President Obama to transmit FY 2010 budget proposal to Congress
April/May: Congressional action on a 5-year or 10-year Budget Resolution
May-September: Congressional action on a Budget Reconciliation bill (if called for by the Budget Resolution)
Ongoing: Measures to stabilize financial, housing, and auto sectors
In considering the fiscal and economic challenges facing the new Obama Administration, it is helpful to visualize a four-track process:
In announcing his budget and economic team (see the December 2, 2008 WBR), President-elect Obama emphasized that work to develop a far-reaching stimulus measure would begin immediately, particularly in light of Commerce Department reports that the economy shrunk by 0.5 percent in the third quarter.
[The National Bureau of Economic Research, a panel of academic economists charged with the official designation of business cycles, said that the United States economy has been in recession since December 2007, when economic activity peaked.]
Obama declined to specify a size for the stimulus measure but tasked his economic and budget team to develop an "aggressive economic recovery plan" that would create or save 2.5 - 3 million jobs. Obama advisers have suggested the package might be in the range of $675 - $775 billion.
Democratic congressional leaders would like to have legislation ready to sign shortly after Obama is sworn in as President on January 20. (Congress reconvenes on January 6.) However, Republican leaders have signaled a desire to go slower. The pace of the legislation will ultimately depend on how long it takes the White House and Democratic leadership to assemble 60 votes in the Senate to invoke cloture and bring the package to a vote; all eyes will be on moderate Republican Senators.
Based on recent reports from the New York Times, the stimulus package may include:
House Republicans have outlined an alternative stimulus plan focused on tax cuts and energy investments.
The nation's governors discussed infrastructure projects recently during a meeting with President-elect Obama. See the National Governors Association white paper on economic recovery.
Background.--The 2008 economic stimulus bill was signed into law on February 13, 2008 and cost $152 billion (HR 5140). It provided tax rebates for individuals and business incentives.
In late September 2008, the House passed a second, $61 billion economic stimulus bill 264-158 (HR 7110), despite a presidential veto threat. However, Senate attempts to pass a similar stimulus bill failed when proponents fell 8 votes short of the 60 votes needed to shut down a Republican filibuster. The Senate bill (S. 3604) also drew a presidential veto threat.
CBO cost estimate of HR 7110
Last year's appropriations process was one of the worst on record in terms of Congress passing the 12 regular appropriations bills. In fact, in 2008, only one appropriations bill made it to the House Floor.
There were two reasons for the serious disruption of the regular appropriations process. First, President Bush threatened to veto any appropriations bills that exceeded his requests, and Democrats--as reflected in the Budget Resolution--called for nearly $25 billion more than the President requested. Second, House Republicans attempted to amend appropriations bills with off-shore oil drilling amendments, strongly opposed by many Democrats.
Consequently, in late September, Congress enacted a stopgap measure to keep Federal programs operating. The stopgap measure was a hybrid of an "omnibus" appropriations bill and a "continuing resolution":
The stopgap provision did not provide inflation adjustments for the covered agencies. However, some specific programs did receive increases: the low income home energy assistance program (LIHEAP) received a $2.5 billion increase over '08; Pell Grants for higher education received $2.5 billion over '08; and the WIC program received $1 billion over '08 to assist with nutrition for new mothers and their children.
In addition, the bill included $23 billion for disaster relief, and authorized $25 billion in loans to the auto industry to retool and develop more fuel efficient vehicles. (GM and Chrysler have received a separate bridge loan to forestall bankruptcy.)
In the coming weeks, the Obama Transition Team will work with congressional appropriators on legislation to keep Federal programs operating beyond March 6, 2009, and at levels closer to Congress' FY 2009 Budget Resolution.Following is a summary of the late September stopgap measure:
While FY 2009 appropriations and a major economic stimulus plan are being expedited, President-elect Obama's new Administration will be simultaneously developing an FY 2010 Budget for transmittal to Congress. The 2010 Budget is technically due the first Monday in February 2009, but new Administrations are generally accorded flexibility to develop and transmit their first budget submission by early April.
The FY 2010 Budget transmittal will provide Congress with its first opportunity to view the Administration's long-term budget priorities in detail.From a strategic point of view, provisions that may be controversial are more likely to be considered in the FY 2010 budget process rather than in the January stimulus bill. The reason is that the FY 2010 congressional budget process can initiate a filibuster-proof "Budget Reconciliation" measure.
America's Priorities: How the U.S. Government Raises and Spends $3 Trillion Per Year, by Charles S. Konigsberg, Editor, The Concord Coalition's Washington Budget Report.