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Budget Conferees Go to Work

May 10, 2007 - by Donny Shaw

Congress is loaded right now. Iraq is at the forefront in the House today, immigration legislation is being contested behind the scenes of the Senate, and underlying it all, major budgeting decisions are being made.

Today marks the beginning of the budget resolution conference, the only time this session that members of the House and Senate will formally meet to work out the big picture of federal revenues and expenditures.

The budget conference committee is a ten-member group — five representative and five senators — chaired by Senator Kent Conrad (D, ND) (that’s him on the right). As Conrad stated in a press release, agreeing on a budget will be “no easy task — Congress has not been able to adopt a budget in three of the last five years.”

Despite the fact that the budget resolution they are trying to agree on will be non-binding, budget resolution conference committees are often unusually tense. Their job is to reconcile the differences between the “budget authority and outlays” as proposed by the two separate budget resolutions, with the goal of agreeing on amounts that add up to the total spending cap, which they are trying to reconcile at the same time. In the differing resolutions, the authority and outlays figures are separated into categories — Transportation, Agriculture, Health etc. — so, when the conference committee makes decisions on these numbers, they directly affect the regular House and Senate committees and their ability to fulfill their legislative priorities for the year.

Therein lies the difficulty: budget conference committee members are often forced to decide between making the overall budget process work and satisfying the specific interests of their party. But besides this perennial struggle, this year’s conferees have some unique issues to deal with.

Extend Bush’s Tax Cuts or Let Them Expire?

The conference committee will have to make a non-binding decision about their intentions with President Bush’s middle-class tax cuts, which are set to expire in 2010. Both resolutions are coming to the conference committee with instructions to extend the tax cuts. The House voted in favor of the extension just before sending the resolution to the committee and the Senate voted for it when the resolution was debated and approved by the chamber.

The committee will have to decide how, if at all, they plan to pay for the loss in revenue that a tax cut extension will incur. One possibility is to put in place a trigger that allows the tax cuts to be extended once a surplus is shown to be available. Committee Chairman Conrad is currently waiting to hear back from the parliamentarian (a go-to guy for rulings on tricky parliamentary procedures) as to whether the trigger would be “overly prescriptive” on the tax-writing panels.

How Much Should We Spend?

Agreeing on a discretionary spending cap is not an issue that is unique to this year’s budget conference committee. But every year the specific decisions and underlying issues are different. Going into the committee, the Senate is proposing a $948.8 billion discretionary spending cap and the House is proposing a $955 billion cap. This is the total amount of money that Congress will aim to spend on non-mandatory programs. It is also the money that members of Congress set aside through earmarking.

According to OMBwatch, “word is that the compromise figure will tilt toward the House number.” Remember, whatever the agreed upon figure is, it will be non-binding and when it comes down to it, lawmakers will be able to spend in excess of it.

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