A Joe Tracker

Passing a budget is a year long event. President Bush kicked off the process in February, unveiling his recommendations for spending in '08 - but those recommendations didn't hold up much when the democratic Congress passed its budget resolution in May. With that budget blueprint in hand, the House spent the summer knocking out the details of all twelve spending bills; the Senate got a much later start and will only manage to get four or five in the bag by October 1, when FY 2008 began. Congress has passed a "continuing resolution" to keep the government rolling until November 16 when it hopes to have a full budget wrapped up. It may first have to battle it out with the president, who has promised to veto spending bills that exceed his recommended cost.

For an overview of the tortuously tedious process of passing a budget, see our budget process page.

Here we'll keep track of the details and debates on the budget as it trudges its way through the chambers of Capitol Hill...

The President's Budget

The president unveiled his budget on February 5. When there was a Republican majority on the hill, Congress took some of his recommendations to heart but avoided his more controversial cuts. Even more so this year, with Dems in control, many - if not all - of his recommendations will be ignored.

How much it'll cost: The president's five year plan predicts that deficits will dwindle over the next four years and there will be a budget surplus of $61 billion in 2012, but those numbers assume that we'll be out of Iraq by the end of 2009 and that $100 billion will be shaved off of Medicare and Medicaid, while at the same time the country's economy will continue to see strong growth. Under the CBO's predictions (which include the Bush tax cuts being extended), there'd still be a $146 billion deficit in 2012. (WP)

Among his recommendations are:

• Medicare & Medicaid: The president's budget would slow the growth of Medicare by charging higher premiums on drug coverage for high income seniors, using the same threshold that's now used for regular Medicare - $80,000 for singles and $160,000 for couples. His plan would also keep the threshold from rising with inflation, meaning more seniors would have to pay higher premiums as time goes by. Combined with other cost-cutting proposals Medicare spending would only rise 5.6% a year, down from 6.5%. Medicaid would also see trimming, slowing its growth to 7.1%, from 7.3%. The grand savings come to $70 - $102 billion over five years.(NYT & WP)

• SCHIP: The president would also slice off 4% from the State Children's Health Insurance Program (down to $5.4 billion), which he says states are using to cover children above the originally intended income level (which is 200% of poverty). (NYT)

• Low Income Heat: The proposed budget cuts 18% from a program paying for heat for the poor - down to $2.2 billion. (NYT)

• Energy: His budget would add $9 billion more in loan guarantees to businesses developing alternative energy (CongressDaily), as well as increases for the Strategic Petroleum Reserve, funding for the Global Nuclear Energy Partnership. Funding for nuclear waste clean up would see small cuts. (WP)

• Defense: The president requested $481 billion in defense spending - a 10% increase from last year. For the first time, the president also included full funding for the Iraq and Afghanistan wars. The armed forces would also be permanently increased by 92,000 troops over the next five years. (WP)

• Department of State: A 20% increase in DOS's budget, up to $35 billion. (WP)

• Environment: A public/private venture to boost spending on national parks by $3 billion over the next decade. (WP)

• Education: The president's plan would increase Pell grants and add $1.2 billion to elementary and secondary education (mostly for high school testing) at the same time as cutting loan programs for technical education and loan subsidies to private lenders.
  (WP)

• Criminal Justice: The Justice Department and FBI would see slight budget increases, but funding for local police would get $1.7 billion in cuts. (WP)

• Homeland Security: Homeland Security would get an increase of $2 billion to $34 billion, with $1 billion for better communications systems, $2 billion for a "virtual fence" along the border and $224 million more for airport security - while state grants would fall by $1.2 billion and the Coast Guard would see its budget cut from $1.1 billion to $800 million. (WP)

• Communities: Eliminating the Community Services Block Grant which helps pay for child care and other services for low income families. (CongressDaily)

The Washington Post summed up the president's budget suggestions in this chart (which we just copied and pasted from here).

Congress's budget resolutions

Ideally, Congress starts piecing together a budget by first outlining a "budget resolution" - which sets the broad framework before budget committees get down to the nitty gritty details. The Senate and House passed separate resolutions in March - and hammered out a joint resolution in May.

The Senate plan

• Total bucks: The Senate plan would spend $18 billion more than the president's proposal on discretionary spending - for a total of $1.1 trillion, which includes $145 billion for war spending.

• Healthcare: Instead of cutting growth in Medicare spending by $66 billion over five years, as in Bush's plan, senators would trim Medicare spending by $15 billion over five years (WP).
  The Senate plan would also increase spending on the State Children's Health Insurance Program (SCHIP) by $50 billion, to a total of $75 billion, over the next five years (WP) - and cover $35 billion of those costs through a cigarette tax hike (WP).

• Education: Senators tuck in $6 billion more toward education next year than Bush's plan would. (WP) Congress may also decide to trim subsidies to college tuition lenders.

• Taxes: The Senate budget would put the Alternative Minimum Tax (AMT) on hold for two years at a cost of $200 billion. (NYT)
  It would also extend some of Bush's "middle class" tax cuts past their 2010 expiration date (including the child credit, the marriage penalty fix and the 10% tax bracket). (WP) Finally, it would let taxpayers in states without income taxes, deduct their sales taxes instead.

• Fudging the numbers: The one similarity with the president's bill is how the Senate budget fudges the overall budget numbers. The five year outlook predicts the budget will eventually be running a surplus, but that's making assumptions that many budget watchers find improbably, such as: only $50 billion will be spent on the Iraq war in '09 and the unpopular AMT tax will only be fixed for two years. Senators say some of the shortfall will be filled by better tax collection, but both the New York Times and Washington Post suspect that revenue will have to be found elsewhere (for example, by not extending some of the Bush tax cuts which are set to expire in 2010). (WP & NYT)

The House Plan

Info on the House plan - which passed at the end of March - is a little sketchier, but the gist of the reporting out there is that it's not much different from the Senate's resolution. Here's a bit more on what is being reported:

• Total Bucks: The House budget resolution adds $22 billion on top of the president's request for a total of $3 trillion.

• Taxes: Unlike the Senate, the House plan doesn't factor in any extension of the Bush tax cuts (after they expire in 2010), even though Democrat leaders suggest they'll be extending that tax bridge when they get there. (Even though budgets only decide how much is being spent in the year ahead, they make five year projections.) (WP)

The Final Budget Resolution

The House and Senate agreed on a final budget resolution in May.

• Deficits: The budget assumes a deficit of $252 billion in FY '08, working down to a small surplus in '12 (even though a budget only really set one year's spending, it's supposed to project out over five years). (WP)

• Taxes: The budget would axe, in part, the Alternate Minimum Tax, but in future years it would let the capital gains and dividends tax go up, as well as taxes for the wealthiest Americans. It would keep in place Bush's middle class tax cuts. To many, the budget doesn't fully explain how the AMT cut will be paid for. (WP)

• Defense: Congress fully funded the president's request for defense spending, including $145 billion for the Iraq and Afghanistan wars in '08 and $50 in '09 (a first - in previous years, war spending was never included). (WP)

Appropriations - the 12 spending bills

With a budget resolution in place, Congress got down to the nitty gritty of drafting each of its twelve spending bills in June. The House took the lead - and passed all 12 bills over the summer. The Senate only got half its bills in the bag before fiscal year '08 started in October 1, but Congress is hopeful it'll get all bills polished off by November 16.

Below we list how much the House and Senate allocated to their budget subcommittees (as well as how much that compares to 2007's budget and how much it goes over Bush's request), where they are in the budget process and any other tidbit Congress Daily or the mainstream press happen to be talking about.

Updated September 30, 2007

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