April 4, 2007
April Recess Edition: Analysis of What's Ahead

BUDGET PROCESS: STEP-BY-STEP™

March 23:

Senate passed S.Con.Res. 21, the FY 2008 Budget Resolution 52-47.
House passed H.R. 1591, the FY 2007 War Supplemental 218-212.

March 29:

Senate passed H.R. 1591 (w/ Senate Amendment) FY 2007 War Supplemental 51-47.
House passed H.Con.Res. 99, FY 2008 Budget Resolution 216-210.

Week of April 2: Senate and House in recess. House and Senate staffs “pre-conference” War Supplemental and Budget Resolution. President reiterates veto threat against House- and Senate-passed war supplementals: “…if either the House or Senate version of this bill comes to my desk, I will veto it.”

President's April 3 Veto Threat

Week of April 9: Senate reconvenes; House in recess for an additional week. House and Senate staffs continue “pre-conferencing” War Supplemental and Budget Resolution.

Weeks of April 16 and 23: House-Senate Conferences on FY 2007 War Supplemental and FY 2008 Budget Resolution. Context: Chairman Spratt is aiming for completing action on a Budget Resolution conference report by May 1.

April 27: House Appropriations Committee deadline for submission of FY 2008 earmark requests.

Late April / Early May: Following adoption of a Budget Resolution Conference Report, House and Senate Appropriations Committees make critical discretionary spending allocations (known as 302(b) allocations) among their 12 subcommittees. This is a key step in setting Federal spending priorities.

UPCOMING HOUSE-SENATE CONFERENCE ON THE WAR SUPPLEMENTAL
CRS Projects Supplemental Funding Not Essential Until July
President Reiterates Veto Threat

The House passed H.R. 1591, the War Supplemental on March 23, by a vote of 218-212. The Senate passed H.R. 1591, amended with Senate language, on March 29, by a vote of 51-47. The President has promised to veto either version.

On March 30, the Congressional Research Service released a report saying the military could survive into July without supplemental funding:

“Based on Army data and estimates, the Army could finance its O&M expenses through the end of May by tapping the $52.6 billion in O&M funding already provided by Congress in the FY 2007 DOD Appropriations Act and the Continuing Resolution….Based on projections of monthly obligation rates, the Army could finance the O&M costs of both its baseline and war program for almost two additional months or through most of July 2007, if it tapped all of (its) transfer authority….If DOD used only some of its transfer authority, the Army could last through the end of June 2007.” -- CRS Memorandum to Senate Budget Committee, March 28, 2007.

Major conference issues will include:

--Whether to send the House Iraq language or the Senate language to the President (the House language mandates withdrawal by September 1, while the Senate language establishes a nonbinding goal of March 2008 but mandates that a withdrawal begin within 120 days).

--Whether to include the $1.5 billion added by the Senate for mine-resistant vehicles.

--The size of the small business tax relief package that accompanies the minimum wage increase.

--The amount of Defense Operations and Maintenance funding.

--The amount of LIHEAP (Low Income Home Energy Assistance) emergency funding.

--The amount of farm disaster funds.

--The amount of Katrina assistance.

Link to WBR Table Comparing President's Request, House-passed, and Senate-passed Bills

House-Passed Bill

House Committee Report

Senate-Passed Bill

The Senate passed S.Con.Res. 21 on March 23 by a vote of 52-47. The House passed H.Con.Res. 99 on March 29 by a vote of 216-210. While the White House is highly critical of both resolutions, the Budget Resolution is an internal procedural framework of the Congress and does not go to the President for signature.

Major conference issues will include:

--Whether to adjust revenues to allow for an AMT fix for any years beyond FY 2007;

--Whether to accept the Senate's Baucus amendment that adjusts the Budget Resolution to make room for extension of certain tax cuts including marriage penalty relief, the child credit, adoption tax credit, and the 10% bracket;

--Whether to let the estate tax bounce back to 2001 levels after 2010, or whether to accept the Baucus provision to extend the 2009 estate tax rate (45%) and exemption level ($3.5 million);

--Whether to set the non-defense discretionary total for FY 2008 at the Senate's $448 billion level, or the House $454 billion level;

--Whether to accept the Senate's Baucus amendment that provides $15 billion in additional funding for SCHIP, the State Children's Health Insurance program, or require that any funding for expansion of SCHIP coverage must be fully offset;

--Whether to include the House's “Budget Reconciliation” instruction that would place student loan reforms on a filibuster-proof fast-track; and

--Which of the Senate Resolution's new points of order to retain.

Link to WBR's Exclusive Table Comparing President's Budget, S.Con.Res. 21 and H.Con.Res. 99

Link to H.Con.Res. 99

Link to House Committee Report

Link to S.Con.Res. 21

Democrats and Republicans have been locked in a rhetorical battle about whether or not the House- and Senate-passed Budget Resolutions raise taxes. Following are the actual numbers, comparing the House-passed, Senate-passed, and President's budgets with the nonpartisan Congressional Budget Office revenue baseline , which projects what revenues will be if no changes are made to current law.

Dollars in Trillions	2008	2009	2010	2011	2012	2008-2012
CBO Baseline	2.720	2.810	2.901	3.167	3.405	15.003
H.Con.Res. 99 (House-passed)	2.720	2.810	2.901	3.167	3.405	15.003
S.Con.Res. 21 (Senate-passed)	2.678	2.825	2.959	3.130	3.235	14.827
President's Budget	2.679	2.787	2.877	3.007	3.174	14.524