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Posted at 6:33 AM ET, 12/21/2010

Wonkbook: Budget bill handicaps both FinReg and health reform; Census favors GOP states

By Ezra Klein

Here's the problem with funding 2011's government using 2010's budget: When the 2010 budget passed, neither financial regulation nor health-care reform had passed. And so the 2010 budget didn't include the new funds necessary to support their implementation. We're not talking about a lot of money here, of course, but certainly some. And for the health of these bills, it's important money.

But after the collapse of the omnibus spending bill, the Democrats have moved to funding the government using a resolution that simply continues 2010's funding levels. And that means starving some of their signature accomplishments of implementation funds. This hasn't been lost on Republicans, of course: Mitch McConnell's key argument for turning GOP senators who'd pledged to vote for the omnibus was that it included funds for health-care reform. The Democrats, however, seemed less attuned to this dimension of the funding fight. And even those who do see the problem aren't making much noise about it: Though there was lots of tough talk in recent months about how Democrays would risk a government shutdown rather than seeing their accomplishments defunded, that didn't prove true, at least this time.

Top Stories

The Census Bureau will announce which states gained and lost House seats today, reports Charles Babington: "The 2010 census report coming out Tuesday will include a boatload of good political news for Republicans and grim data for Democrats hoping to re-elect President Barack Obama and rebound from last month's devastating elections. The population continues to shift from Democratic-leaning Rust Belt states to Republican-leaning Sun Belt states, a trend the Census Bureau will detail in its once-a-decade report to the president. Political clout shifts, too, because the nation must reapportion the 435 House districts to make them roughly equal in population, based on the latest census figures. The biggest gainer will be Texas, a GOP-dominated state expected to gain up to four new House seats."

The federal funding resolution Congress is considering doesn't include money for the implementation of health-care reform, report Jessica Holzer and Josh Mitchell: "Democrats last week sought $1 billion to expand federal agencies to cope with health-care demands as part of a proposed $1.1 trillion spending bill. That measure died after Senate Republicans closed ranks against it under pressure from conservative activists...Congressional Republicans have said they will try to defund enactment of the health-care law's least popular provisions, particularly Internal Revenue Service efforts to enforce the requirement that most Americans carry health insurance."

Nor for FinReg, reports Pat Garofalo: "The resolution does not include funding for the implementation of the Dodd-Frank financial reform law. Under the omnibus, the Securities and Exchange Commission would have seen its budget increase to $1.3 billion from $1.1 billion, and the CFTC would have gone from $169 million to $286 million. Already, the SEC has halted implementation of a variety of measures under the law as it waits for funding."

The FCC is set to enact "net neutrality" rules, reports Cecilia Kang: "Federal regulators are poised to enact controversial new rules affecting Internet access, marking the government's strongest move yet to ensure that Facebook updates, Google searches and Skype calls reach consumers' homes unimpeded. Under the regulations, companies that carry the Internet into American homes would not be allowed to block Web sites that offer rival services, nor would they be permitted to play favorites by dividing delivery of Internet content into fast and slow lanes. The rules are set to win passage in a vote Tuesday by the Federal Communications Commission, after a majority of the panel's five members said they planned to vote in favor of the measure."

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Surf-rock interlude: Surfer Blood plays "Twin Peaks".

Still to come: Regulators are taking aim at executive pay; Mark Warner and Saxby Chambliss will push a deficit-reduction package; Bill Gates and Randi Weingarten talk education reform; and an infant learns to drive.

Economy

Sens. Mark Warner (D-Va.) and Saxby Chambliss (R-Ga.) will introduce a debt reduction package in the next Congress, reports Heidi Przybyla: "Senators Mark Warner and Saxby Chambliss will seek to put the U.S. debt atop the agenda early in next year's Congress by proposing legislation to slash government spending, reduce popular tax breaks and trim entitlement programs. Warner, a Virginia Democrat, and Chambliss, a Georgia Republican, have been working over the past six months to court a group of 25 senators from both sides of the political aisle in hopes of gathering support for their bill, Warner said today in an interview. The legislation is based on a plan by the co-chairs of President Barack Obama's debt-reduction panel that earlier this month failed to get enough support for its recommendations to be sent to Congress."

The US is considering a crackdown on Wall Street executive pay, report Aaron Lucchetti and Sara Schaefer Munoz: "U.S. regulators are considering whether to require large financial firms to hold onto a chunk of executive pay to discourage the excessive risk-taking that contributed to the financial crisis, according to people familiar with the situation...The discussions by the Federal Reserve, Securities and Exchange Commission and other federal banking agencies are the result of a provision in the Dodd-Frank financial-overhaul law that instructs regulators to prohibit any bonus plan that "encourages inappropriate risks" at financial firms with more than $1 billion in assets."

The Fed is limiting its purchases of Treasury assets: http://bit.ly/ep64hK

The tax compromise provides a preview of new OMB director Jack Lew's style, reports Jackie Calmes: "While the deal drew fire from both parties, liberal Democrats were especially enraged by a two-year extension of Bush-era tax cuts for high incomes and wealthy estates and a reduction in payroll taxes for Social Security. In private caucuses, some turned their anger at the White House on Mr. Lew. 'This is not a package we could have supported if it didn’t take care of the workers who are most vulnerable,' Mr. Lew said in an interview, echoing the pitch he made to Democrats in private...With both Mr. Obama and Republicans vowing to bring down annual deficits swelling the nation’s debt -- in very different ways -- Mr. Lew becomes an even more crucial figure in the cabinet than budget directors typically are."

Public respect for government workers is on the wane, report Karen Tumulty and Ed O'Keefe: "Three-quarters of those who were surveyed in an October Washington Post poll said they believe federal workers get better pay and benefits than people doing similar jobs outside the government, and 52 percent said government employees are overpaid. When the NBC/Wall Street Journal poll this month sampled public opinion on the major proposals that were put forward by the president's deficit and debt reduction commission, the most popular by far - and the only one deemed 'totally acceptable' by a majority of respondents - was freezing the salaries of federal employees and members of Congress for three years."

The St. Louis Fed president calls quantitative easing "moderately successful" so far: http://on.wsj.com/fBbxaE

The spending package's March expiration date won't make raising the debt ceiling easier, writes Stan Collender: "Because the existing debt ceiling currently is assumed to be reached close to the same date the the CR will expire, won't the two issues be combined into a single piece of legislation?...Combining the two issues would certainly be possible and perhaps even likely in a rational world where efficiency is the goal. But in the hyper political and partisan world that will exist in Washington next year, will it really make any sense for the GOP voluntarily to give up one of what it will believe will be its two major points of leverage over the White House? Even if the two need to be dealt with at close to the same time, why would the GOP not use both opportunities to exert influence that it otherwise won't have?"

Tom Coburn's "Wastebook" is misleading, writes Brad Plumer: http://bit.ly/en6ujQ

Adorable infant acquiring life skills interlude: A Russian baby learns to drive.

Health Care

Sen. Tom Coburn is blocking a bill to provide health care to 9/11 first responders: http://politi.co/eFpn6x

The Justice Department is suing Blue Cross Blue Shield on antitrust grounds, reports Reed Abelson: "When the Justice Department filed an antitrust lawsuit against Blue Cross Blue Shield of Michigan in October, the unusual action was widely seen as a warning shot to dominant health insurance carriers in many other states...The case is viewed as a test for the Obama administration’s introduction of the federal health care law, which is aimed at spurring competition and driving down costs. About half the states in the country, including Alabama, Rhode Island and Iowa, share circumstances similar to Michigan’s, in their relationships with a big single insurance carrier."

Domestic Policy

The spending bill Congress is considering will implement a federal pay freeze, reports Stephen Ohlemacher: "Federal workers would face a two-year pay freeze under a spending bill Congress will take up this week to keep the government operating through March 4. The bill would protect student Pell grants, veteran's benefits and a program that helps low-income families pay their heating bills. A small business loan program would be extended...Three weeks ago, President Barack Obama proposed a two-year salary freeze for some 2 million federal workers, seizing on an initiative popular among Republicans. Public employee unions are lobbying lawmakers to reject the pay freeze."

State attorneys general are going to war with Google over privacy concerns, reports Tony Romm: "More legal wrangling could be in store for Google now that it has refused to turn over to state investigators the e-mails and other data it accidentally collected while mapping neighborhoods. The Mountain View, Calif.-based company declined to deliver that trove of information to Connecticut Attorney General and soon-to-be senator Richard Blumenthal by his Friday deadline. That could set up a legal showdown between the two less than a month before Blumenthal is set to become his state’s newest Democratic senator."

Bill Gates and Randi Weingarten discuss school reform: http://bit.ly/fj40lh

The tax compromise will not affect the Social Security trust fund, writes Allan Sloan: "Next year, as you probably know, workers subject to Social Security taxes will pay only 4.2 percent of their "covered wages" -wages up to $106,800 - rather than the normal 6.2 percent. This will reduce Social Security's cash proceeds by $112 billion, according to Congress' Joint Committee on Taxation. What impact will this cash shortfall have on the Social Security trust fund? None. Zero. Zip. How can a $112 billion cut in Social Security revenues not affect the trust fund? Because Treasury will give the trust fund the same amount of bonds it would have gotten had the two-percentage-point tax holiday didn't exist."

Modest proposal interlude: Craig Rowin would like someone to give him $1 million.

Energy

Republicans may actually defend spending on renewable energy, reports Sharon Begley: "This region--Texas, Oklahoma, and on up to the Dakotas--is to wind power what Nebraska is to corn. The investment tax credit for building wind and other renewable installations expires Dec. 31. Once it does, those projects will come to a halt, and thousands of people who are employed in building them will be out of work. Those workers, of course, are the constituents of newly elected officials, the companies behind the projects are crucial economic engines in the districts and states of those legislators, and both are going to give their reps an earful if the projects don’t resume."

The EPA is touting the success of cap and trade in fighting acid rain: http://bit.ly/hM57vU

Closing credits: Wonkbook is compiled and produced with help from Dylan Matthews, Mike Shepard, and Michelle Williams.

By Ezra Klein  | December 21, 2010; 6:33 AM ET
Categories:  Wonkbook  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Reconciliation
Next: Cuts or investments at the State of the Union?

Comments

The GOP brayed and brayed about the need to extend the Bush tax cuts for all Americans in order to remove uncertainty so that businesses could start planning and hiring and to improve the economy.

And now the GOP is going to pursue a strategy of fighting the budget and the debt ceiling and of course this will only leave the country in a geas of massive uncertainty.

These republicans are nothing but nihilistic saboteurs.

They are economic terrorists.

And the sooner that idiot Obama learns this the sooner he can fight them.

Posted by: lauren2010 | December 21, 2010 7:38 AM | Report abuse

Obama should do what Bush did.

Shift money from funded programs to unfunded programs.

For example, he should shift money from the DOD to health care reform.

Posted by: lauren2010 | December 21, 2010 7:40 AM | Report abuse

Lauren 2010 is exactly right: Switch money from funded to unfunded programs.

Posted by: paul65 | December 21, 2010 7:58 AM | Report abuse

The unfunded programs (health care, finreg) are more important than the status quo recession creating programs (Afghan war, etc).

Obama has weapons at his disposal to fight these absurd republicans. The comment above about limiting wallstreet pay is one example.

Posted by: lauren2010 | December 21, 2010 8:09 AM | Report abuse

This is a song about taxes
T.A.X.E.S.
Sales, income, property
What are the rest?

Before we sing about taxes
What's the difference in a tax and a fee
I guess it does not really matter
When it is Government and your money

They want to tax your car
Want to tax your gas
Want to tax your utilities
Phone, internet, cable and electricity

They want to tax you when you come
Want to tax you when you go
Want to tax you when the sun's shining
Raining or in the snow

This is a song about taxes
City, county, state
And the federal government with a changing rate

They want to tax your drivers license
Want to tax your license plate
Want to tax your airline ticket at every airport gate

They want to tax you when you hunt
Want to tax you when you fish
They want to tax you anyway they can
Ain't that a _itch
Taxing situation
What would the Founding Fathers say

Your in a taxing situation
Have another tea party

They want to tax the cigarettes
Want to tax the booze
Even want to tax my water and food

This is a song about taxes
Impuestos in Espanol
Sabes mi amigo
Demasiado

They want to tax your house
Want to tax your land
Even want to tax your building plans

they've got
import, export, excise
inheritance, luxury
its all about
revenue
from people like you and me.


This is song about taxes
What would the Founding Fathers say
Your in a taxing situation
Have another tea party

This is a song about taxes
Just what do you get?
More over-dressed, over-paid
Bueruacrats

This is a song about taxes
Just what do you get?
More police officers
To write you more tickets

This is a song about taxes
Just what do you get?
I'll tell you one that you don't
Guareenteed health benefits

This is a song about taxes
Just what do you get?
If you do not pay them on time
Your going to get interest

They want to tax you when you travel
Hotel, motel tax
They want to tax on a toll road
And to park in a parking ramp

This is a song about taxes
Going to be a part two song
Send your comments to
Songabouttaxes.com

This is a song about taxes
And they even want to tax my dog.

Posted by: OutOfState | December 21, 2010 8:27 AM | Report abuse

About Healthcare in the US:

Note to American people:

1. Equal healthcare for constituents as for members of Congress (and staff) is freedom/justice/liberty.
2. Employer based insurance is not working if the goal is to create jobs.
3. A US Constitutional Amendment is in order.
4. ……….

Posted by: OutOfState | December 21, 2010 8:39 AM | Report abuse

HEY HARRY REID:

1. Bring the Senate back into session from December 26 through January 4th and finish the people's business.

2. Force votes on President Obama's remaining +50 judicial nominees.

3. And pass a 2011 funding bill that doesn't permit new healthcare and financial regulation laws die on the vine.

We're holding you accountable.

TIA
America

Posted by: paul65 | December 21, 2010 9:21 AM | Report abuse

--*The unfunded programs (health care, finreg) are more important than the status quo recession creating programs (Afghan war, etc).*--

In your opinion, you mean.

How 'bout the money is returned to the citizens, and *they* get to exercise their values for themselves?

Too much like freedom for you?

Posted by: msoja | December 21, 2010 9:50 AM | Report abuse

"State attorneys general are going to war with Google over privacy concerns, reports Tony Romm...More legal wrangling could be in store for Google now that it has refused to turn over to state investigators the e-mails and other data it accidentally collected while mapping neighborhoods...For its part, Google has tried to defuse the issue by offering to delete the data."

So wait... how is it privacy-enhancing for the states to have access to the data in addition to Google, especially given that Google is offering to delete instead?

Why do people using unprotected wi-fi networks expect privacy?

Posted by: justin84 | December 21, 2010 9:57 AM | Report abuse

justin wrote:

"Why do people using unprotected wi-fi networks expect privacy?"

C'mon honey, just let me take one picture, please? I promise no one will ever see it but me! LOL

Posted by: 54465446 | December 21, 2010 2:14 PM | Report abuse

Starting this year your child (or children) cannot be denied coverage simply because they have a pre-existing health condition. If you don't have insurance for you and your children search "Wise Health Insurance" online they are the best.

Posted by: andrewthoone | December 22, 2010 3:20 AM | Report abuse

Starting this year your child (or children) cannot be denied coverage simply because they have a pre-existing health condition. If you don't have insurance for you and your children search "Wise Health Insurance" online they are the best.

Posted by: andrewthoone | December 22, 2010 3:21 AM | Report abuse

Isn't the "rescue" of Pell Grants a moot point? If there are no Feds or contractors to administer the program, then the grant funding is a pyrric victory for students and colleges. The failure to get an administrative appropriation beyond March means that the new House leadership will be able to waste time trying to retroactively cut FY 2011 monies -- their avowed goal in preventing the enactment of not only a FY 2011 omnibus but even the modest year-long CR that the House had passed last week.

"When the 2010 budget passed, neither financial regulation nor health-care reform had passed. And so the 2010 budget didn't include the new funds necessary to support their implementation."

When the 2010 budget passed, 100% direct student loan had not passed. And so the 2010 budget didn't include the new funds necessary to support ongoing operations. The loan program itself makes money, so it doesn't need an appropriation, but the contractors and the few feds who oversee them do cost money that was not allocated for 2010.

Posted by: CesarSozei | December 22, 2010 7:46 AM | Report abuse

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