Budget 2010

Congress spends a good chunk of its year on Capitol Hill slogging through the 9-month process of creating and passing a budget. The president usually kicks off the relay race with a budget proposal in early February and - on the rarest of years - a final budget is passed by October 1 when the next fiscal year begins (more often, the process gets dragged out to December - or Congress gives up on the effort entirely).

With a new administration moving in - and 2009's budget still hanging - the budget process got a late start, but Congress quickly caught up. The president unveiled the outlines of his budget proposal in late February. Congress took its first official step in late March by passing a "budget resolution" - a blueprint for the twelve spending bills lawmakers hope to pass over the summer.

The president's budget outline

The administration's budget proposal is, by most accounts, both massive and ballsy (in a good or bad way, depending on your perspective). A global economic crisis didn't get in the way of Obama proposing large scale changes in taxes, health care funding and other administration priorities. For details on how money will be spent see the Washington Post's department by department breakdown. Here are some of the budget's broad brushstrokes - many of which would require separate congressional legislation to be effected:

  • trillion dollar deficits for the next couple of years, with deficits declining to $500 billion by 2013
  • higher taxes on the wealthy (with incomes above $250,000) when the Bush tax cuts expire in 2010, as well as an increase in capital gains tax (from 15% to 20%) and taxes for hedge-fund managers (by taxing their profits as income rather than capital gains)
  • $646 billion in funding over ten years from a global warming bill (yet to be passed) that would all the "cap and trade" of carbon emissions. $15 billion a year of that would support "clean energy" and the rest would pay for a "Making Work Pay" tax credit for low income families. 
  • a $634 billion "reserve fund" to help pay for expanding health care coverag. The money would come from higher taxes on the wealthiest Americans as well as savings from trimming unnecessary costs in Medicare and Medicaid (WP, WP)

Congress' budget resolution

As its first foray into the budget process, Congress each year tries to start off with a "budget resolution" that sketches out the priorities, plans and lump sums of the budget. (The resolution isn't necessary, but it has its perk, namely "reconciliation" - see below.) The House and Senate passed versions of their resolutions the week of March 30th. Both largely follow the president's outline, but with some cash trimmed out - and with more questions left open. (WP, WP, WP, WP)

  • Both chambers slice out some non-defense spending for 2010 - $14 billion in the Senate version and $7 billion in the House
  • Both cut out funding Obama included for a second round of bailout funds for the financial sector
  • Both also reject Obama's proposal to make the tax cut for working families in the stimulus bill permanent
  • Both left room for Obama's proposals to expand healthcare and education and to set up a carbon emissions cap-n-trade program - even though neither spelled out where funds would come from or how they would be spent
  • The House resolution also doesn't make middle class protection from the Alternative Minimum Tax permanent

Reconciliation

The budget process is mostly about how Congress will spend money, but lawmakers can also include in their budget resolution how they plan to raise more, or less, money. If they do so, they then have to "reconcile" those tax changes by passing a separate bill. For the ruling party, reconciliation bills have one big advantage: because of Senate rules, those bills only need 50 votes in the Senate to pass (as opposed to the 60 that are normally needed to avoid a filibuster). 

In the past, the Republicans have used reconciliation to push legislation that might not have gotten 60 Senate votes, notably Bush's tax cuts. Now the Democrats are considering using reconciliation to turn Obama's health care and global warming provisions into law. (NYT)

The Nitty Gritty

With a budget resolution in place, each chamber's next step is to "allocate" spending into twelve "appropriations" bills. Each bill gets a committee, which crafts the fine budgetary print before sending the bills to the full floor for a final vote. Below we keep track of how much each committee has to play around with ("allocation") and the major programs, if any, they are haggling over.

The House The Senate
Agriculture

$23b allocated
11%

Passed.

$23b allocated

Commerce, Justice & Science

$64b allocated
13%

Passed.

$65b allocated

 

Defense

$508b allocated
4%

$508b allocated

Energy & Water

$33b allocated
1%

$33b allocated

Financial Services

$24b allocated
5%

$24b allocated

Homeland Security

$42.6b allocated
6%

Passed. (AP)

 

$43b allocated

Passed.

 

Interior, Environment

$32b allocated
16%

Passed. Includes $10b for the EPA, $7b for American Indians,  $4b for wildlife preservation and $3b for national parks.

$32b allocated

Labor, Health & Education

$161b allocated
5%

$163b allocated

 

Legislative Branch

$4b allocated
7%

Passed

$5b allocated

Passed.

Military Construction & Veterans

$77b allocated
5%

Passed.

 

$77b allocated

State & Foreign Operations

$49b allocated
33%

Passed.

$49b allocated

Transportation & Housing

$69b allocated
25%

 

$68b allocated

Updated July 5, 2009

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