Capitol Hill Reports - White House Preparing to Send Congress Full Budget Request on Thursday

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White House Preparing to Send Congress Full Budget Request on Thursday
Wednesday, May 6, 2009
5:00 PM

The White House is preparing to send Capitol Hill lawmakers its full account-level budget request for fiscal year 2010 on Thursday.

"In other words, we will fill in the details below the agency-by-agency topline numbers on the roughly 40 percent of the budget this coming fiscal year that will be decided upon in the appropriations process," Office of Management and Budget Director Peter Orszag wrote in his blog earlier this week. "We will also be releasing a separate volume of terminations, reductions, and savings, highlighting the programs that we are eliminating or scaling back."

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For next week, OMB plans to release three additional supporting documents:

Analytical Perspectives - Contains economic and accounting analyses, data on federal receipts and collections, and analyses of federal spending, among other technical information.
Historical Tables - Contains data on receipts, outlays, deficits, surpluses, and debt going back to 1940 or earlier.
Summary Tables - These tables were released in February and will be re-released to reflect "minor updates and changes."

The administration released a budget outline in late February that claimed to halve the deficit in four years via $2 trillion in cost-cutting and revenue-raising proposals compared to the Congressional Budget Office's baseline projections. However, Orszag would later acknowledge that roughly $1.6 trillion of the $2 trillion deficit reduction plan is derived from substantially lower Iraq war costs compared to CBO's improbable baseline estimate of extrapolating $200 billion in "surge" funding over the next ten years.

In light of this year's transition to a new president and administration, tomorrow's release of the White House's full budget request will uncharacteristically follow Congress' adoption of its budget blueprint. The House and Senate approved the FY 2010 budget conference report (S. Con. Res. 13) last week with no Republican support, setting the stage for lawmakers to begin moving the 12 FY 2010 appropriations bills that fund the federal government's operations along with health care and student loan reform legislation.

The budget conference agreement provides House and Senate Appropriations Chairmen Dave Obey (D-WI) and Daniel Inouye (D-HI) with a total $1.086 trillion in discretionary funding to divvy up and distribute to their respective subcommittees (also called 302(b)s), or approximately $10 billion less than President Obama's request. The budget assumes that of the $1.086 trillion, $556 billion would go to defense and therefore match the president's request, and $530 billion would be provided to civilian agencies.

Budget writers also included filibuster-proof protections in the Senate for future legislation overhauling the current health care system -- as long as it does not increase the deficit -- as well as legislation aimed at ending subsidies to private lenders of student loans. To accommodate a potential bipartisan agreement on either bill, the committees of jurisdiction do not have to report reconciliation legislation until October 15, 2009.

"It is assumed that reconciliation will not be used for changes in legislation related to global climate change," states the budget conference report.

In a nod to the Blue Dog Coalition, a fiscally conservative bloc of House Democrats, Speaker Nancy Pelosi (D-CA) and Majority Leader Steny Hoyer (D-MD) assured the group that "statutory PAYGO will get done this year." PAYGO rules require that any new spending or tax cuts must be fully offset by other spending reductions or revenue increases so the deficit does not go up. However, it is expected that Congress will approve an extension of the alternative minimum tax (AMT), President Bush's tax cuts aimed at middle-income families (marriage penalty relief, $1,000 child tax credit, etc.), and the increased reimbursement rate for Medicare physicians without offsets. CBO estimates that these three initiatives, if enacted without offsets, will add $2.6 trillion to the deficit over ten years.