Budget Day on Capitol Hill
With Super Bowl Sunday behind us, it's time for another secular holiday - one celebrated by policy wonks across the land - Budget Day.
This morning, the White House delivered its $3.1 trillion fiscal 2009 budget proposal to Capitol Hill. As many recent stories have noted, for the first time, this year's spending blueprint was sent to the Hill only in electronic form, rather than the usual doorstop-size printed behemoth. This may save a lot of trees, but it frustrates photographers, since it's hard to stage a photo-op of a 5.3 megabyte PDF file.
President Bush's last budget lays out a plan to balance the nation's books by 2012 (though with a $400 billion-plus deficit this year), make his expiring tax cuts permanent, boost defense spending and essentially freeze, or at least slow the growth of, most domestic programs.
Responses from the two parties on the Hill have been predictably mixed.
"As the Bush Administration begins its last lap, one looks for a mea culpa for its dismal fiscal record, and looks for a budget that acknowledges its mistakes that have left us a mountain of debt," said House Budget Chairman John Spratt (D-S.C.). "But today's budget bears all the hallmarks of the Bush legacy -- it leads to more deficits, more debt, more tax cuts, more cutbacks in critical services."
In fact, Democrats didn't wait until the budget was actually unveiled before starting their criticism. Last week at her party retreat in Williamsburg, Va., Speaker Nancy Pelosi (D-Calif.) started the ball rolling with a familiar Democratic complaint during the Bush years - that the president often touts new and innovative programs in his State of the Union addresses and then fails to actually ask for enough money to fund them.
"How many times do you have to learn it?" Pelosi said. "State of the Union -- rhetoric; budget -- reality. There isn't a match. This time the rhetoric wasn't even that uplifting so I don't even know what this budget will be."
Other Republicans, meanwhile, appear more eager to warn against what Democrats may do with their budget resolution than to focus too much on Bush's plan.
The Senate Budget Committee will hold a hearing on Bush's proposal on Tuesday, with Office of Management and Budget Director Jim Nussle serving as the star witness. The House Budget panel will hold a similar hearing Thursday, then both committees will get to work crafting their own plan. Here are three key areas to watch going forward:
â€¢ Iraq: Bush's submission calls for $70 billion to fund the wars in Iraq and Afghanistan. Democrats face three key decisions on this front. The first is whether they should -- in the expected upcoming military supplemental bill and later in the normal defense spending measure -- give the Pentagon all the money it wants, or whether they should instead dole money out in smaller chunks and force the administration to keep coming back for more.
The second decision for Democrats, which Capitol Briefing wrote about Friday, is whether they should attach restrictions and withdrawal timelines to Iraq funding bills, or whether they should move such legislation separately.
And the third question is whether Democrats, in their own budget, will match Bush's request for a 7.5 percent boost in the overall Pentagon budget, or whether they will instead scale down that increase in order to pay for their favored domestic projects.
â€¢ Taxes: Last year, Democrats' first in power since 1994, the majority did not make room in their budget to pay for making Bush's tax cuts permanent before they expire in 2011. That led to a battle over semantics on the Hill.
Republicans argued that the budget was tantamount to a tax increase, since by not allocating money to make the tax cuts permanent, Democrats presumably planned to let them expire. Democrats countered that the budget resolution doesn't actually raise or cut taxes anyway, so it couldn't possibly be labeled a tax increase. The same war of words is likely again this year, with vulnerable Democratic incumbents facing accusations that they support massive tax increases.
â€¢ PAYGO: On taking the majority, Democrats vowed to follow strict "pay-as-you-go" budget rules, meaning that any spending increase or tax cut would have to be offset by corresponding spending cuts or tax increases.
But Democrats have had some trouble with this promise. Republicans have resisted going along, particularly since most in the GOP philosophically disagree that tax cuts need to be "paid for" at all. When they finally passed temporary relief from the Alternative Minimum Tax, Democrats did not offset the expected loss of revenue. And the majority has already admitted that it won't offset the economic stimulus package that's currently moving through the Senate, either.
So how will Democrats handle this problem in their own fiscal 2009 budget? Republicans like Gregg expect the majority to use various "gimmicks" and accounting tricks to make the budget appear more austere than it really is. Beginning with Bush's opening salvo today, Democrats have their work cut out for them.
Posted by: Mark | February 4, 2008 7:02 PM | Report abuse
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