October 25, 2014

Budget and Appropriations Update

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

COMMITTEES REPORT ADDITIONAL FY 2011 APPROPRIATIONS BILLS:  Last week the House Appropriations Committee continued to make progress on the FY 2011 bills.  The full committee reported the Military Construction-Veterans Affairs bill as well as the Transportation- Housing and Urban Development bill.  Both bills are expected to be considered on the House floor this week.  At the first full committee markup, the committee also approved allocations -- known as 302(b) allocations -- which divide the House deeming resolution's overall $1.121 trillion discretionary spending allocation among the 12 subcommittees.  At the markup, Republicans unsuccessfully offered a proposal to limit regular discretionary spending to $1.09 trillion.  Also last week, the subcommittee reported the Interior-Environment bill. This week the subcommittee is scheduled to consider the Defense bill and the full committee is scheduled to consider the Agriculture and Homeland Security bills. In addition, the State-Foreign Operations subcommittee has scheduled a hearing to review civilian assistance funding in Afghanistan.  The subcommittee's chairwoman, Nita Lowey, announced last month that she would withhold a portion of the FY 2011 funding from the subcommittee's bill after stories in the media detailed allegations of corruption and the diversion of funds in Afghanistan.  The subcommittee also held a hearing earlier this month on the same subject.  In the Senate, the subcommittees and the full committee completed work on the Energy-Water, the Commerce-Justice-Science, and the Transportation-Housing and Urban Development bills.  Also last week, Sen. Sherrod Brown was selected to fill the seat on the Appropriations Committee previously held by the late Sen. Robert Byrd. Byrd's appointed successor, Carte Goodwin, will serve on the Budget Committee.  This week Senate subcommittees are scheduled to consider the Financial Services-General Government and the Labor-HHS-Education bills.  While the committees have made considerable progress reporting bills over the last few weeks, the shortage of remaining legislative days on the calendar and an increasingly partisan atmosphere prior to the election have led to speculation on Capitol Hill and in publications such as Roll Call (subscription required) that few of the bills will be completed before Congress passes a continuing resolution and goes home to campaign.

 

THE LONG WAIT FOR FY 2010 EMERGENCY SPENDING: In the Senate, a procedural vote to end debate on the House-passed FY 2010 war supplemental failed 46-51.  (Under Senate procedure 60 votes were required for cloture).  The vote was viewed as the Senate's rejection of the additional $22.8 billion in domestic funding and offsets added by the House.  The bill will now return to the House where leadership and the Appropriations Committee will need to decide whether or not to accept the original $58.8 billion bill that the Senate passed in May.  Senate Appropriations Committee Chairman Dan Inouye's statement on the Senate vote and the current status of the bill can be found here.  The Senate vote was covered by the Associated Press, Congressional Quarterly and The Hill.

 

OPENING ARGUMENTS IN DEBATE OVER EXTENDING BUSH TAX CUTS: The expiring 2001 and 2003 tax cuts were again in the news as the media (Reuters, The Hill, The Wall Street JournalThe Associated Press and Congressional Quarterly) covered the debate on Capitol Hill and in the Democratic party about whether or not all of the tax cuts should be extended.  In interviews, public appearances, and behind closed doors, policymakers offered a preview of what is likely to be a contentious debate that could extend well into this fall and have significant implications for the deficit.  In an interview with Congressional Quarterly, Senator Ron Wyden, a member of the Senate Finance and Budget Committees, commented that "It's going to be a rollicking few months."  A USA Today editorial argued that the tax cuts should be allowed to expire in order to address growing deficits.  In a second piece, Sen. Orrin Hatch made the opposing argument that the tax cuts should be extended to stimulate growth. Over the weekend, the New York Times and the Washington Post both reported on a meeting behind closed doors at the Senate Finance Committee. At a meeting with reporters at the end of last week and in appearances this weekend on NBC's Meet the Press and ABC's This Week, Treasury Secretary Timothy Geithner reaffirmed President Obama's position that the tax cuts should only be extended for the middle class.  The Concord Coalition's view is that the tax cuts scheduled to expire should not be permanently extended without a plan for long-term fiscal sustainability.

 

FED CHAIR BERNANKE TESTIFIES BEFORE HOUSE AND SENATE COMMITTEES: Federal Reserve Chairman Ben Bernanke testified before the Senate Banking Committee and the House Financial Services Committee on monetary policy and the state of the economy.  As part of his testimony, he submitted a detailed report  reviewing current developments in monetary policy, as well as recent economic and financial developments.  Also last week, the majority staff of the Joint Economic Committee released an updated report including economic and employment data for each of the 50 states.

 

OBAMA SIGNS BILLS TO EXTEND UNEMPLOYMENT BENEFITS AND ADDRESS IMPROPER PAYMENTS:  The House and Senate passed a bill which will extend unemployment benefits through Nov. 30 and make the extension retroactive.  According to the Congressional Budget Office, the bill will increase the deficit by $33.9 billion from 2010 to 2020.   A summary and the text of the bill can be found here. President Obama signed the bill into law and released this statement. The President also signed the Improper Payments Elimination and Recovery Act, which will strengthen requirements for agencies to review and report payments that should not have been made or were made for incorrect amounts.  Background material released by the White House is available here and a web site with additional details can be found here.  As The Concord Coalition has said before, this is a commendable step that could help to reduce waste and restore public trust in government.   The Los Angeles Times covered the signing of the bill.

 

DEMOCRATS AND REPUBLICANS TOUT DEFICIT REDUCTION PLANS: Democratic Representatives Gary Peters,  John Adler, Peter Welch, and Jim Himes introduced a series of bills which will attempt to reduce the deficit by scaling back tax breaks and cutting spending in programs at the Departments of Energy, Treasury, Housing and Urban Development, Defense, and Agriculture.  According to the sponsors, the legislation is intended to reduce the deficit by more than $70 billion over 10 years. The group also announced the formation of a "Deficit Reduction and Spending Cuts Working Group."  Also last week, Republican Rep. Paul Ryan presented his plan to reduce the debt at a public forum hosted by the Brookings Institution. Details on the Ryan plan are available here. Concord Coalition Chief Economist Diane Lim Rogers spoke at the forum, and a transcript is available here.  At a time when annual deficits are over a trillion dollars and our national debt is over $13 trillion, The Concord Coalition commends policymakers from either party who are willing to put specific options on the table for discussion.

 

ALSO IN THE NEWS: The Congressional Budget Office released a report analyzing the fiscal implications of the Social Security Disability Insurance program and a letter assessing the budget implications of adding a public option to the health care law signed earlier this year.  The Washington Post profiled the staff director of the Senate Finance Committee. CNN reported on a new Congressional Research Service study concluding that the United States has appropriated over $1 trillion for wars since the terrorist attacks of Sept. 11, 2001.  The report also analyzed the cost of previous wars throughout American history and can be found here.  The Seattle Times reported that Washington Gov. Chris Gregoire set up a website to request ideas for filling an estimated $3 billion hole in the state budget.  (The web site can be found here).  The New York Times reported on the plight of state lawmakers who, under the provisions of state law, are not receiving salaries because they missed the April 1 deadline for passing a budget.  And last but certainly not least. . .the New York Daily News covered some difficult choices Newark, New Jersey Mayor Cory Booker has made to close the city's $70 million budget gap.