An update on budget news

Below are a few budget items we have been following, since the last edition of the Washington Budget Report (sign up here) was published.

• Last week, the House Appropriations Committee postponed its mark-up of the FY 2010 war supplemental.  The committee’s chairman, David Obey, released a proposal including $84 billion in supplemental funding.  In addition to funding the President’s request for war funding, the proposal would fund additional domestic priorities such as education and law enforcement funding for the states. Last Thursday, the Senate approved a $58.8 billion supplemental appropriations bill by a vote of 67-28.
• Also last week, the House approved a revised version of the extenders bill with two separate votes of 215-204 and 245-171.  Due to concerns about the cost, the deficit effect of the bill was reduced from $134 billion to $54.2 billion.  The Senate is likely to take up the bill after the recess. Articles in The Economist, The Washington Post, New York Times, and the Politico covered the debate and the efforts to significantly reduce the cost from a variety of perspectives. Also, the Joint Committee on Taxation released a document including detailed explanations of the revenue provisions in the bill.
• At a forum last Thursday, Sen. George Voinovich (R-OH)  criticized the anti-tax pledges which have been signed by a number of his colleagues in the Senate.  Voinovich said that the pledges are “inconsistent with the oath of office that they took when they became members of the United States Senate.”  Voinovich also said “. . .[T]he fact of the matter is we have to raise taxes and we have to cut our costs.”
• On Wednesday, Congressional Budget Office Director Doug Elmendorf made a presentation to health care conference on the topic of health care costs and the federal budget.  Elmendorf made the point that the “rising costs of health care will put tremendous pressure on the federal budget during the next few decades and beyond.”  He also stated that  “in CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”
• On Thursday of this week, The National Governors Association and the National Association of State Budget Officers released a report concluding that states faced budget gaps of $296.6 billion between FY 2009 and FY 2012. Of the $296.6 billion, only $169.3 billion has been closed and the remaining shortfall for 2010-2012 is projected to be $127.4 billion.  The report was also covered by Business Week and on National Public Radio.
• The Senate Budget Committee held field hearings on the topics of infrastructure and energy investments.  The House Budget Committee announced a June 9th hearing with Federal Reserve Chairman Ben Bernanke.   No further progress has been made on a budget resolution.  The full Senate has not considered the resolution that the Senate Budget Committee reported and the House Budget Committee still has not scheduled a mark-up. The Senate did not include a deeming resolution in the supplemental appropriations bill approved last week.
• The House Appropriations Committee has yet to report a single FY 2011 appropriations bill.  The Congressional Budget Act of 1974 permits the House to begin considering appropriations bills after May 15th, and last year eleven of the twelve House appropriations bills were reported prior to the August recess.
• This week, the Department of the Treasury reported that the national debt is over $13 trillion .  At the end of FY 2000, it was slightly under $5.7 trillion.  A CNN report covered the potential effect growing debt could have on economic growth, interest payments, government support, and inflation.