Congressional Dems reach tentative federal budget deal

Congressional Democrats and senior Obama administration officials have reached a tentative agreement on the President’s $3.5 trillion proposed budget according to a story in last Friday’s Washington Post.

The House-passed budget resolution cut $7 billion from the President’s request for non-defense domestic discretionary spending while the Senate-passed budget resolution spends $15 billion less than the President’s request. The tentative budget agreement proposes cutting $10 billion from the President’s request. The non-defense discretionary portion of the budget includes annual funding for a broad range of federal spending, including affordable housing, education, environmental protection, health care, medical research, economic support to keep people out of poverty, services for people with disabilities and more.

In a closely-watched decision, the tentative agreement does not permit the use of a budget procedure known as “reconciliation” for President Obama’s proposed cap-and-trade climate change initiative. This means that such legislation may be subject to a filibuster by opponents in the Senate and would effectively need 60 votes to pass. If reconciliation had been applied to the climate change legislation, it would have needed only 51 votes to pass the Senate. The Obama administration’s climate change initiative is controversial in both the U.S. House and Senate. One of the key concerns is whether revenues that would be raised from any auction of carbon emission permits would be used to provide relief to low- and moderate-income families that would be faced with higher utility bills. (We blogged on this issue last week.)

On taxes, the tentative agreement would continue to exclude millions of taxpayers from the alternative minimum tax for three more years, but only if the House moves to adopt budget rules to prevent the deficit from increasing.

Budget conferees from both the House and Senate are expected to meet next week. No members of Minnesota’s Congressional delegation have been appointed to be conferees. When agreement is reached and a conference report is issued, it goes to the House and Senate floor for final approval. No amendments are permitted on conference reports. The final budget conference report is not signed by the President because it is not a law, but it will set the framework for all spending and tax bills this year.

-Steve Francisco

About Steve Francisco

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