In Congress, House and Senate budget plans moving forward

In Congress, both the House and Senate Budget Committees have completed work on their separate budget resolutions for 2010. The resolutions are being debated on both the House and Senate floors this week. Votes are expected in both houses before the end of the week.  A joint House-Senate conference committee will then work out differences between the two versions and report a single joint budget resolution back to the House and Senate for a final vote in mid-April. The final budget resolution is not a law and so is not signed by the President, but it will provide guidance to the appropriations committees in making key decisions later this year on how much money will actually be spent for federal activities funded on an annual basis.

One of the key decisions that Congress makes in the budget resolution is to determine the upper limit of how much money will be available for domestic discretionary spending. This broad category covers everything from affordable housing to public health programs, from support for education to energy, environmental protection, services for people with disabilities and much more.

Although spending on domestic discretionary programs has grown more slowly than defense and homeland security, nevertheless, some members of Congress have already signaled their intentions to try to make deep cuts in this category of spending.

President Obama’s proposed budget sent to Congress in February called for an increase in non-defense domestic discretionary spending of 7.1 percent above 2009 levels.  But according to the Office of Management and Budget (OMB), the President’s proposed increase for domestic discretionary spending is actually only 3.2 percent over 2009 levels when the one-time increases in the budget for the 2010 Census and the cost of the FHA loan guarantee program are excluded and inflation and population growth are factored in.

Also, Sens. Jon Kyl, R-AZ, and Blanche Lincoln, D-AR, may offer an amendment calling for deep cuts in the federal estate tax beyond current law. According to the Center on Budget and Policy Priorities, only two out of every 1,000 estates would owe any estate tax under current law. Keeping the estate tax law at current parameters will already cost the federal government over $600 billion from 2012 to 2021. While the possible Kyl-Lincoln amendment to the budget resolution would not have the force of law, it could help create momentum for real changes to the estate tax law later this year.

Stay tuned for further developments next week as the budget resolutions move forward in both the U.S. House and Senate.

-Steve Francisco

About Steve Francisco

Steve Francisco is the former federal policy analyst for the Minnesota Budget Project.
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