CHN: Budget Struggles: Spending Moves Forward Despite the Budget Resolution Logjam

Conflicts among House Republicans continue to stall a Budget Resolution, although a new deal to move more than $6 billion away from defense and international funding to a number of domestic programs may enable House leaders to put together a majority next week.
Appropriations Shifts to Domestic Programs: Because the House is moving ahead with annual appropriations even without a completed budget, House Appropriations Committee Chair Jerry Lewis (R-CA) announced the allocations for FY 2007 appropriations as divided among the appropriations subcommittees. These “302(b)” allocations ( ) bear out the rumors that House leadership had agreed to an increase of $4.1 billion for Labor-HHS-Education programs in FY 2007 beyond what the President had requested. This shift was in response to a number of moderates including Rep. Castle (R-DE) who opposed the cuts in the budgets proposed by the President and the House Budget Committee. They had called for at least $7.2 billion to be added to Labor-HHS-Education programs in order simply to prevent cuts and keep up with inflation. The $4.1 billion added to Labor-H appropriations is still more than $3 billion short of the amount needed to forestall cuts in services. Rep. Castle remains opposed to the Budget Resolution, but according to CQ Today (May 3) he speculated that some moderates might switch their votes to yes because of the increased funding.

The House total for appropriations as announced by Chairman Lewis is slightly below the amount called for by the President for FY 2007 – $872.8 billion (down $475 million from the President’s proposed $873.3 billion). In response to pressure for more domestic funding, $4 billion is shifted from defense, nearly $2.4 billion from foreign operations, and $824 million from military quality of life/VA in order to add the $4.1 billion to Labor-HHS-Education, a little over $1 billion to homeland security, and smaller increases to a number of other domestic programs. Most analysts believe that the reductions in defense will be restored later in an emergency supplemental bill. Funding in emergency bills can exceed the cap agreed upon for appropriations.

Appropriations Without a Budget Resolution: Although work can continue within the Appropriations Committees in the absence of a budget resolution, both the House and Senate cannot take floor votes on appropriations without a more formal agreement on what total dollars should be. Without a budget resolution, each chamber must vote on a ”deeming resolution” to assign spending totals to appropriations committees. It is likely that House and Senate deemed funding totals will not agree. In that case, differences will be hashed out within the conference committee for each appropriations bill.

The House Still Cuts; the Senate Didn’t: The total funding for appropriations assumed in the House is now about $4 billion short of the amount needed to maintain current levels of domestic services (including homeland security). On the other hand, the Budget Resolution passed by the Senate would not require domestic cuts in FY 2007; in fact, it included $1.6 billion more than needed simply to maintain current service levels.

The House budget proposal remains harmful in a number of other ways:

The House abandons health coverage for children and working poor. The House budget leaves out funds needed next year for the State Children’s Health Insurance Program (SCHIP) and for Medicaid for low-income families who’ve left welfare for work. Both the President and the Senate continued these vital commitments, without which hundreds of thousands of children and parents will lose health coverage.

House appropriations are cut deeper and deeper over 5 years. By 2011, the House Budget Committee’s proposal would cut domestic appropriations more than 12 percent below what’s needed to maintain current services. This is dramatically worse than either the President’s budget or the Senate’s.

The House budget threatens low-income entitlements.   The budget proposal would direct the House Ways and Means Committee to make $4 billion in cuts over 5 years from the programs they oversee.  Those include Temporary Assistance for Needy Families, child support enforcement, Supplemental Security Income, child care, the Earned Income Tax Credit, unemployment insurance, and child welfare services.

The House plan includes still more tax cuts. The Budget Committee included $228 billion over 5 years to keep the President’s tax cuts going.

Other budget controversies: The House was unable to bring its budget resolution to the floor before the April recess in large part because appropriators were opposed to limits on their authority to include earmarks. A separate deal over earmarks was made as part of a lobbying ”reform” bill that passed the House on May 3. Appropriators are still concerned about proposed limits to their ability to add emergency spending beyond a limited amount. (The anticipated restoration of defense funding through a later emergency supplemental bill is a case in point of how so-called emergency funding helps get around a budget impasse.)

All these problems mean that although the House is closer to resolving its differences and producing a budget, it is by no means certain. Analysts are even more skeptical that the differences can be worked out between House and Senate for a final resolution. Many advocates believe the outcomes for low-income people are better without one this year, especially with a continued push for adequate appropriations funding. No budget resolution means no possibility of fast-tracked entitlement or tax cuts (the budget or tax reconciliation process) that can get through the Senate with only a simple majority vote.

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