A Look at the Democrats’ Budget Resolutions
While much of Washington has been focused this week on U.S. troop withdrawal from Iraq and the fate of Alberto Gonzales, debate has begun on another vital matter: the nearly $3 trillion federal budget for the upcoming fiscal year. Moments ago, the U.S. Senate adopted its plan for the budget, 52-47.
The way the federal budget is put together involves a long and tortuous process. It began last month, when President Bush submitted a budget proposal to Congress that called for $2.9 trillion dollars and a putative $61 billion surplus by the year 2012. But Democrats and budget observers noted that the president asked only for $50 billion in 2009 and nothing thereafter for the wars in Iraq and Afghanistan and the global war on terror. And the president assumes that revenues coming in to the government would increase at a seven percent annual rate – roughly twice his assumed GDP growth rate. So the president’s budget was roundly dismissed as fanciful and unlikely to come near producing a surplus.
At the same time, the Bush budget added only one percent of additional funding to last year’s discretionary funding cap on domestic social programs (explained here). That’s less than the rate of inflation, so it’s effectively a cut in real terms in funding for these programs. Additionally, it proposed slashing $66 billion from the Medicare program, a political non-starter in Congress.
Under the budget-making rules, the next step in the process is for Congress to put together its own budget and approve what’s called a budget resolution. The budget resolution is a curious creature. Its purpose is merely to set out Congress’s budget overall outlines, rather than to specify how all of its proposals would be paid for. And it’s only a resolution, not a statute, without the force of law. Nothing in it is ultimately binding, except on Congress itself, and only if both houses approve it.
But it does pin-point maximum spending and minimum revenue levels, a discretionary spending cap, and a projection of deficit or surplus over the next five years. Budget resolutions may not be binding or specific, but they nonetheless indicate fiscal and, to some extent, program priorities.
After last year’s midterm elections that gave control of Congress to the Democrats, budget observers anticipated the House and Senate budget resolution proposals with two questions uppermost in mind: what would the new Congress’s fiscal priorities look like and would Congress be able, ultimately, to produce a budget, having failed last year, despite GOP control of Congress and the White House?
It will be many months yet before the second question can be answered. But, this week, the House Budget Committee produced and approved budget resolutions for next year. As mentioned, the Senate has just passed its own version.
What do these budget resolutions say about the Democrats’ priorities? The most striking thing is that they both aim to yield budget surpluses by the year 2012 – the Senate projecting a $132 billion surplus by that year and the House, $153 billion, both considerably larger than the president’s projections. So the broadest priority appears to be fiscal responsibility. But both resolutions include the same war spending provisions as the president’s budget and revenue projections based economic assumptions that are as optimistic as the president’s, which the GOP has not failed to point out, somewhat hypocritically. And the Democrats’ budget resolutions further assume that all of the Bush 2001 and 2003 tax cuts will be allowed to expire in 2010 – a fiscally convenient, politically dubious assumption.
The other major message emerging from the Democrats’ budget resolution is that, despite years of serial stinginess by the president in the area of discretionary domestic program spending, they aren’t taking advantage of seizing control of Congress to establish major new funding priorities. The House budget plan not only provides every penny of the president’s request for defense and national security, it adds only six percent to the president’s discretionary spending cap. The Senate adds only four percent. After inflation, these figures are closer to four and two percent respectively. Not exactly change on the order of magnitude one might expect following a takeover of Congress.
A couple of considerations may explain Congress’ spending restraint. First, greater largesse would require painful trade-offs, in view of the overriding priority to convey a commitment to fiscal responsibility. Second, passing a budget this year is seen as one of the most important tests of the Democrats’ ability to govern effectively. Like it or not, the only way to avoid a veto or, in the worst case, a government shutdown, is for Democrats to pass a budget that bears some resemblance to the president’s.
Comments (22)
Blah, blah, blah. Same old story. The age-old war between the classes and the masses continues unabated. Who has the upper hand, the investment class or everybody else. The numbers, the allocations, the pork, the perks, makes no difference because in the end someone will lose and someone will win.
From my old-age viewpoint, the difference between today and yesterday is the difference between an investment class operating globally today, to hell with the economy of this country, to a time when the health of the American economy determined the health of her investment class.
The question is are there enough individuals in Congress brave enough to speak out and look out for the masses in this country. Are there enough of them who care about this country and in the process perhaps willing to sacrifice their seats in Congress for the sake of our country and her people.
March 23, 2007 3:11 PM | Reply | Permalink
Gee, it seems like only yesterday when the budget was only $2 trillion.
March 23, 2007 3:25 PM | Reply | Permalink
The Democrats have become Republicans. Just as I thought. I know it's like waiting for Gidot, but I'm waiting for a 3rd choice.
March 23, 2007 3:31 PM | Reply | Permalink
Well, conservatives might say Republicans have become Democrats. See JohnW1141's comment, above.
March 23, 2007 5:11 PM | Reply | Permalink
$3 trillion dollars and all I got was this lousy teeshirt.
March 23, 2007 7:05 PM | Reply | Permalink
Heh, so far seems to me this thread could easily be one over at freerepublic.com cmplaining about those "tax & spend liberals." Folks maybe should consider being a bit more specific about their plaints lest Grover Norquist start linking to their comments?
March 23, 2007 7:50 PM | Reply | Permalink
Okay, I am for some of the following, but I admit that I really don't have the time to examine a $3 trillion budget to see how it is going:
1. trimming the military budget... Even in times of war, we can trim the toys.
2. being honest in the military budget... Full funding of the Iraq and Afgan wars for the next fiscal year.
3. holding down high capital, low return projects... bye bye NASA....
4. trimming the debt... this one is tough, but direct funding of repayment of a share of non SSA bonds.
5. forcing domestic spending that benefits the well off to self-fund... All capital market insurances and regulations should be funded by fees on the capital markets... I would even want to make a profit.
6. Shifting certain special costs to their causes... Fund Medicaid emergency costs through bullet tax, for example.
7. Squeezing the Executive-gone-wild... Defunding certain executive branch offices (substantially reducing funding and staffing and prohibiting the borrowing of staff from other agencies, thereby hobbling them and preventing the Bush hegemony by way of depriving it of staff).
March 23, 2007 9:10 PM | Reply | Permalink
So, put a piece of paper on the table that says that the government HAS to chop spending by 30% across-the-board, starting at the first of next year, and see who supports the idea.
There will be much rending of clothing and hair, but if they 'put it in writing' and stick to it, they can get it done. Or, we can look forward to being perpetually indebted to foreign countries that might see fit to use that to their national advantage. Decisions, decisions...
March 24, 2007 12:35 AM | Reply | Permalink
Didn't the Senate budget resolution also contain pay-as-you-go language? This would require revenue or spending offsets to the Bush tax cut extensions that weren't included in the resolution. I'm proud to say my two Senators, both Republicans, supported the Senate resolution.
March 24, 2007 4:18 AM | Reply | Permalink
Re: From my old-age viewpoint, the difference between today and yesterday is the difference between an investment class operating globally today, to hell with the economy of this country, to a time when the health of the American economy determined the health of her investment class.
This is still very much the case. The problem is that the investing class (as you call them) is short-sighted, confusing the health of their own personal economy (or that of their class as a whole) with the American economy in general. Hence the honest confusion many Bush supporters express as to why the country is not happy with Bush-o-nomics when, on paper (generally the upper class's paper) the economy looks so good.
March 24, 2007 6:19 AM | Reply | Permalink
Re: 3. holding down high capital, low return projects... bye bye NASA....
Gee, I guess bye-bye Social Security and Medicare/Medicaid too.
Let's remember the government is not a business, and it isn't supposed to show a profit. In fact, one of the reasons government exists is because there are things which need to be done which no one can profit individually from so the market alone will not supply these goods.
March 24, 2007 6:21 AM | Reply | Permalink
Correct me if I'm wrong (which I am, often)
I think when Clinton first took office the interest payments on the national debt and deficit we're the second largest expenditure, behind Social Security, of the Federal Government.
We were paying $1 Billion PER DAY for these interest payments.
I look forward to any corrections or an expansion on my comment.
March 24, 2007 8:22 AM | Reply | Permalink
That would be the same "conservative" Democrats passing the Defense of Spinach Act? Well, at least it is American spinach. But wouldn't it be something to have ONE political party in America that would defend the right of Americans to get medical treatment after eating terrorist spinach?
March 24, 2007 8:23 AM | Reply | Permalink
Remember when spinach was pulled off the market because folks were getting sick and/or dying?
The Bush government finally issued an official recall.
Companies pulling from the shelf before that government date were not reimbursed. Companies pulling it off the shelves after that government date were reimbursed.
This section of the bill reimburses those companies who did the right thing for consumers and pulled their product before the Bushco government made the recall official.
I think we should be doing the right thing for consumers. That was to pull the product as soon as the spinach was identified...and not punish companies financially for doing the right thing and rewarding companies for holding off until the government finally sanctioned the recall.
If you disagree, let me know.
March 24, 2007 8:31 AM | Reply | Permalink
I was listening to Republicans and right wingnuts call into C-SPAN this morning and those that weren't calling the Democrats traitors for passing the bill were whining about the "PORK."
Its these same hypocrites that vote for Republican politicians that promise to "bring home the bacon." If you run for Congress and not promise to "take care" of your district or State you can forget getting elected. The CongressCritters even brag about the money they got when they come home to the district.
Repug Jack Kingston of Ga is a classic example. I once watched him babble about deficits and wasteful spending then the next day introduce an amendment to subsidize the Vidalia Onion Industry in Ga. Since then whenever I see him I shout "Hey, the Vidalia Onion guy!"
By the way, when its the other guy, its PORK; when its me its "perfectly justifiable expenditures."
March 24, 2007 8:51 AM | Reply | Permalink
Whatever the merit it of this micro example, it's got nothing to do with Iraq let alone anything to do with a philosophy about how we defend this country. It's just another example of the peanut sized (peanuts were in the bill too) priorities today's Democratics obsess about while they cannot under any circumstances seriously address any big issue. They have no narrative, no story, no vision, no sense of direction or meaning.
If they want to take on food safety and nutrition, enact meaningful regulations, fund enforcement and make a commitment to to improve the diet, health and quality of life of the American people, sign me up. But that's not what they are doing nor will they do it. They are only throwing peanuts at the spinach industry.
March 24, 2007 9:15 AM | Reply | Permalink
I listened to Rep. Dave Obey explain this the other day and it does make a lot of sense.
Those companies who did the right thing by pulling it before the government mandated acted responsibly. Those who didn't do so voluntarily didn't give a damn about how many people who died.
March 24, 2007 9:16 AM | Reply | Permalink
No.
March 24, 2007 9:25 AM | Reply | Permalink
Bye bye NASA?
Okay, I'm a space geek. But, funding exploration and science is something that governments are supposed to do, particularly because it's not high-return enough for businesses to handle, at least in the short term.
We're supposed to use out collective resources to fund things that individuals can't. NASA is a great example of that.
thosethingswesay.blogspot.com
March 24, 2007 10:32 AM | Reply | Permalink
As you rail on "pork".
It's a Republican talking point.
These are legitimate, liberal add-ons that any of us would probably approve of.
Last year, Bush negotiated OFF the Republican appropriations bill over $4 billion in pork. Pelosi has upped the ante and has a negotiating point with the Senate and with Bush.
The pork addresses every public "ohmigod" in funding--veterans care (brain injuries, upgrades at Walter Read and other veterans hospitals), children's medical care (14 states), katrina (rice fields' salt water contamination, rebuild the levees, etc.), western fire-fighting funds for the upcoming fire season. Bush and the Senate can say NO or they can negotiate.
Notice that the states involved have every incentive to go even bluer or even become blue with the ads this will bring forth in 2008--voted against funds to help Farmer Joe in your district or so heartless they denied medical care to X number of children in your district. The Senate is on notice and so is every Republican Representative whose district could use these funds.
As an example, let's see how well the Republicans do in Louisiana if Bush vetoes this bill and denies funds for Katrina; or denies needed medical care funds for active-duty troops or veterans.
These were all carefully selected and targeted.
Pelosi is tough. We won't be hearing these individual Republicans screeching. Rove and Bush will be hearing it, though.
March 24, 2007 12:03 PM | Reply | Permalink
Didn't know that SS, etc. were capital projects....
March 24, 2007 12:34 PM | Reply | Permalink
The sciences do not get equal treatment and the ones with pretty pictures and science fiction get the lion's share of the money. NASA and electron accelerators are very low priority to my way of thinking. They are boondoggles for the engineering and physics set.
March 24, 2007 12:37 PM | Reply | Permalink