|
Off-site Links GET TO KNOW WHO REPRESENTS YOU |
A New Wiki with Data on Lawmakers. |
Who is Receiving Federal Loans & Grants? |
Who's Giving Money to Your Elected Officials? |
Who's Giving Money to Your State Elected Officials? |
Does Your Opinion Match the Polls? |
|
Legislation News & Report (TM) TheWeekInCongress.com (TM) Managing America: Budget |
|||||||||||||||
|
TheWeekInCongress.com (TM) Week Ending March 30, 2006
H Con Res 99 Concurrent resolution on the budget for fiscal year 2008.
This House version of the congressional budget follows closely behind the Senate version (SCR 21) and aims to reduce the deficit to zero by 2012. It will compete with two other budget resolutions coming from the House Congressional Black Caucus, the Progressive Caucus and the Republican Caucus.
Unlike the White House that relies on the Office of Management and Budget to determine budget figures the House and Senate rely principally on the Congressional Budget Office and the Joint Committee on Taxation. CBO tells the House that unemployment rates will rise from 4.6% in 2006 to 4.7% in 2007 and 4.9% in 2008 with a 5% average out the next few years. Interest rates are projected to remain low for the next five years and short term rates are expected to drop to an average of 4.4% over the last four years of the budget while long term rates are expected to average 5.2% through 2012.
Real Gross Domestic Product growth is projected to be modest for five years and will slow in 2007, the budget holds dropping to just below 3% over the last four years of the budget. Inflation remains a slow grow expected to average around 2% throughout the whole budget period.
This budget is skeptical of the President’s conclusion of $422.3 billion more in revenue over five years than Congress calculates. Congress must concern itself with dissenting numbers because it has imposed upon itself the requirement of deficit-neutral spending. Although there are some ways out when higher spending is needed. Including in the loopholes is waiving the budget act, declaring emergency spending and providing different spending rules on on-budget spending than on off-budget spending.
Similar to the Senate this resolution sets forth non-deficit increasing goals for spending in several areas including State Children’s Health Insurance Program (SCHIP), agriculture, higher education, Medicare, energy alternatives, affordable housing, benefits for Filipino veterans of WW II, rural schools security and community self-determination, receipts from the Bonneville Power Administration, transitional medical assistance.
The numbers Congress is working with are Federal revenues rising from $1.9 trillion in FY 2007 to $2.6 trillion in FY 2012 against budget outlays beginning at $2.3 trillion in FY 2007 and rising slowly to $2.7 trillion in FY 2012. The on-budget deficits would range from $395 billion in 2007, rising to $458 billion in 2009 and dropping to $103 billion in 2012. Congress set the current debt limit at $8.9 trillion and sees it rising to $10 trillion in 2009 and continuing to rise to $11.2 trillion in 2012. The debt held by the public such as in government pension funds and so on is $5 trillion in 2007 rising to $5.6 trillion in 2012. (Senate Budget numbers here)
PAY AS YOU GO AND BUDGET RULES The House holds that pay as you go should be returned to its original simplistic version when it was created in 1990. Pay as you go is the provision that helped Congress reduce the deficit in the 1990s to create a surplus by requiring a tax increase or spending cut to offset deficit producing spending increases or tax decreases.
A little known publication that has significant data is the Financial Report of the United States. The Report is produced by the Treasury Department for the President and is considered to be a more straight forward report on the state of the US financially. The bill urges the President to use the Report when putting together his yearly budget.
The House Committee on Education and Labor is required to reduce the deficit by $75 million 2007 through 2012.
ALTERNATIVE MINIMUM TAX The Alternative Minimum Tax is a 1969 attempt to make wealthy taxpayers with multiple tax break loopholes to pay some taxes. Not indexed for inflation the law affects more and more Americans in the lower brackets and is a tempting source of tax revenue measured in the billions. This bill doesn’t do much to change that stating only that any attempt to alter that tax must not increase the deficit or decrease the surplus for the period of fiscal years 2007 through 2012 and the period of fiscal years 2007 through 2017. The budget reflects that the AMT is a continuing source of revenue at least until next year.
Discretionary spending is scrutinized and budget authority is set in several spending areas including review of disability and supplemental security incomes, income tax compliance, healthcare fraud and abuse, improper unemployment insurance payments. Advanced appropriations, (new discretionary budget authority for FY 2008 that first becomes available after 2008 are authorized to over $25 billion.
WASTER FRAUD AND ABUSE All government agencies are directed to review programs to root out waste, fraud, and abuse.
OTHER TAXES Although the AMT does not seem to be affected by this bill the bill does assert that the AMT 'relief' joins the extension of the child tax credit, the extension of the marriage penalty relief, the extension of the 10% individual income tax bracket, the elimination of estate taxes on all but a minute fraction of estates by reforming and substantially increasing the unified tax credit, the extension for the research and experimentation tax credit, the extension of the deduction for state and local sales taxes, the extension of the deduction for small business expensing and the enactment of a tax credit for school construction bonds.
To taxpayers a tax break is favorable but to budget writers all tax breaks are lost revenue. Congress, then, looks where it can for money. The so-called tax gap, $300 billion in taxes not paid was addressed recently by the head US Tax Collector who testified that about $20 billion of the gap can be acquired but it will take up to ten years. The significance of that data is that collection of a good part of the gap is considered revenue in this resolution but there is question if the amounts can be collected.
DEFENSE PRIORITIES Supports funding cooperative threat reduction and nuclear non-proliferation at current funding levels, ensure that TRICARE beneficiaries under 65 pay no more for service, increase pay to ensure retention of experienced personnel in the military, ballistic missile spending is supported but space-based interceptor development will be slowed. Satellite technology spending will remain level. The bill would incorporate Government Accountability Office recommendations on spending savings.
THE SENSE OF THE HOUSE The House then offers its’ ‘sense’ of things including excellent healthcare for current and former military members, the Walter Reed Commission, to reject the president’s suggestion of increased fees for some veteran services, extra funds for veteran mental health and post-traumatic stress disorder and traumatic brain and spin injuries. Extra funds are included to speed up the processing of disability compensation claims.
On Science Science and research are important as well as funds to increase the number educated as scientists, engineers and mathematicians and math and science teacher.
On Deployments New budget authority, outlays or receipts resulting from overseas deployments are not included in on budget calculating as are emergency projects.
On Homeland Security Homeland security is enhanced by extra spending in transportation, regional development, health and administration of justice.
On disaster response Disaster response. Katrina is an ongoing spending project and this bill calls for reform of the contracting process to help in future disasters.
On paying for entitlements Entitlements expected to grow with an aging population is partly addressed by reducing and eliminating the deficit and paying down the debt. Reducing the resources frees up funds for productive investments.
On food insecurity The bill notes that 35 million Americans are food insecure meaning they are uncertain of having or being able to have enough food. 10.8 million are hungry due to lack of food. 25 million sought emergency food assistance from food pantries, soup kitchens, shelters, etcetera.
HEALTHCARE Affordable is the predominant word. Legislation consistent with the pay-as-you-go principle should be adopted that makes health insurance more affordable and accessible, with attention to the special needs of small businesses, and that lowers costs and improves the quality of health care by encouraging integration of health information technology tools into the practice of medicine, and promoting improvements in disease management and disease prevention.
RESERVE FUNDS Reserve fund categories are frequent in this year’s budget in the House and Senate. The provisions set up spending for specific programs and in some cases the amount that can be spent. In that sense they are like authorizations but all come with the requirement that the money spent must not increase the deficit.
State Children’s Health Insurance Program $50 million. As long as the authorizing legislation placed before the House complies with the pay-as-you-go principle. These additional resources will sustain current caseloads, expand coverage, and reduce the number of uninsured children. Of the over nine million uninsured children in this nation, around six million are eligible for SCHIP or Medicaid but do not receive coverage.
Alternative Minimum Tax Accommodates legislation that reforms the tax code to shield middle-income families from the AMT as long as it adheres to the pay-as-you-go principle. Without reform, the number of taxpayers subject to the AMT will rise from 4.2 million in 2006 to 23.2 million in 2007 and to 25.7 million in 2008, according to the Joint Committee on Taxation.
Middle income tax relief and economic equity Reduce tax burdens on middle-income families and taxpayers that complies with the pay-as-you-go principle. This includes legislation such as the extension of the 10 percent individual income tax rate, marriage penalty relief, the child tax credit, the research and experimentation tax credit, the deduction for small business expensing, and the deduction for State and local sales taxes. It also accommodates elimination of estate taxes on all but a minute fraction of estates, and a tax credit for school construction.
Agriculture The reserve fund accommodates legislation that reauthorizes the Farm Security and Rural Investment Act of 2002 (Public Law 107-171) or prior farm support acts, or authorizes similar programs, or both, to the extent that such legislation complies with the pay-as-you-go principle. The section also provides for an increase in budget authority up to $20 billion over five years (2008-2012) above the Congressional Budget Office's current estimate of spending for these programs if the funding increases are appropriately offset. The resolution allows for the House to continue to address a number of priorities, such as maintaining a strong farm safety net for our nation's agricultural producers; delivering natural resource conservation measures on private lands; investing in energy research; and rural development projects that strengthen our rural economies; and enhancing food nutrition assistance to help fight hunger. The reserve fund could also facilitate a new farm bill that provides enhanced conservation, research, and marketing assistance to crops that have not received traditional commodity support.
Higher Education The reserve fund accommodates reforms to the student loan programs that increase benefits to students, consistent with the pay-as-you-go principle adopted by the House.
Medicare The reserve fund accommodates additional mandatory spending for Medicare program improvements such as increasing the Medicare reimbursement rate for physicians while holding beneficiaries harmless from associated premium increases, as long as the legislation is consistent with the House pay-as-you-go principle. Current law calls for Medicare payment rates to physicians to be cut by nearly 40 percent over the next eight years. The Committee supports Federal investments in health information technology that will improve the quality and efficiency of not only Medicare, but also the health sector as a whole. Another possible area for program improvement is the Part D prescription drug benefit.
Long term energy alternatives The reserve fund accommodates legislation consistent with H.R. 6 that invests in renewable or alternative energy resources, promotes new emerging energy technologies, or develops greater energy efficiency, to the extent that such legislation complies with the pay-as-you-go principle.
Affordable housing The reserve fund accommodates legislation that creates an affordable housing fund, offset by savings from reforming the regulation of certain government-sponsored entities, such as Fannie Mae and Freddie Mac, to the extent that such legislation complies with the pay-as-you-go principle.
Filipino veterans of WW II The reserve fund accommodates additional mandatory spending to provide equitable benefits for all Filipino veterans of World War II and their survivors and dependents, consistent with the pay-as-you-go principle.
Rural schools and community self-determination reauthorization To the extent that such legislation complies with the pay-as-you-go principle the law provides economic assistance for roads and schools in rural communities affected by the loss of receipts from sales on federal lands in their communities. The assistance is intended to compensate local governments for the tax-exempt status of the national forests and other federal lands.
Bonneville Power Administration The resolution includes a reserve fund to accommodate legislation to reject the Administration's acceleration of Bonneville Power Administration's (BPA) debt repayment and to prohibit BPA from applying secondary sales revenue in excess of $500 million towards additional federal debt repayment, to the extent that such legislation complies with the pay-as-you-go principle.
Transitional Medical Assistance TMA provides temporary Medicaid assistance for families transitioning to the workforce.
Sponsor: Rep. John Spratt Vote: Passed House 216 to 210 March 29, 2007 RC 212. The Progressive Caucus substitute failed 81 to 340 march 29, 2007 RC 210. The Republican substitute failed 160 268 March 29, 2007 (RC 211) Cost to the taxpayers: $2.7 trillion for FY 2008 rising to $2.9 trillion. Earmark Certification: Not applicable to this resolution. ## All Rights Reserved. © 2007 TheWeekInCongress.com(TM) No reproduction, language translation or distribution without written permission from TheWeekInCongress.com.(TM)
MORE INFORMATION
OVERVIEW OF THE 2008 BUDGET RESOLUTION
SPENDING BY FUNCTION, AGENCY, DEPARTMENT, ETCETERA
AMENDMENTS 1. PROGRESSIVE CAUCUS SUBSTITUTE Amendment in the nature of a substitute offered by Ms. Woolsey. Lynn (D-CA) An amendment numbered 2 printed in House Report 110-79 to balance the budget by FY 2010. It spends $395 billion on defense while projecting complete U.S. military redeployment out of Iraq during 2007. It also projects enactment of the Common Sense Budget Act, which would save at least $60 billion per year on largely obsolete Cold War weapons systems plus tens of billions more in waste, fraud, and abuse in DOD spending identified by the nonpartisan Government Accounting Office (GAO). It repeals the Bush tax cuts for the top 1% of taxpayers and cracks down on corporate welfare by eliminating certain tax breaks and corporate loopholes. It includes the SMART Security Alternative to Preemption Doctrine, which shifts some spending and increases other non-military spending to enhance homeland security and fight the root causes of terrorism through 21st century diplomacy and meeting basic human needs (e.g. HIV/AIDS/TB, universal basic education for all). It provides funding for immediate, cost-effective steps to redress global warming and the rapid acceleration of renewable energy development. It fully funds NCLB and IDEA to improve Teacher Corps and job training. It also fully funds the S-CHIP program to ensure every American child eligible is covered for basic health insurance. It ensures whatever federal funding is needed to provide health care (including mental health care) for all American veterans (including but not limited to veterans of the Iraq and Afghanistan military operations). Finally, the substitute increases funding for Community Development Block Grants, Hurricane Katrina relief and reconstruction, community policing, and priority clean-up of leaking underground storage tanks that threaten the drinking water of nearly half of all Americans. Failed 81 to 340 march 29, 2007 RC 210
2. REPUBLICAN SUBSTITUTE Amendment in the nature of a substitute offered by Mr. Ryan, Tim (R-WI). An amendment in the nature of a substitute numbered 3 printed in House Report 110-79 to retain the 2001 and 2003 tax provisions, and provides for one-year extensions of alternative minimum tax [AMT] relief, the State and local sales tax deduction, and the research and experimentation [R&E] tax credit. It sets discretionary spending at $1,079.6 billion in fiscal year 2008 and $5,079.8 billion over 5 years. Defense discretionary spending equals the President's request for 2008 and 2009--including funds for overseas operations in Iraq and Afghanistan. Non-defense discretionary spending totals $433.9 billion in 2008, essentially freezing the 2007 level (excluding emergencies). Within this amount, the budget accommodates priority increases above the freeze for Homeland Security, Veterans' Health Care, National Institutes of Health, Community Development Block Grants, and Science and Technology. Additionally, the budget calls for continued reforms to make the government's major entitlements more responsive, flexible, and sustainable--and in the process saves $279 billion over 5 years. Finally, the substitute includes emergency set-aside, Legislative Line Item Veto, PAYGO for spending only, and discretionary spending caps The Amendment failed 160 268 March 29, 2007 (RC 211) OVERVIEW OF THE 2008 BUDGET RESOLUTION Overview of the 2008 Budget ResolutionThe new House majority promised a new direction for the country.--We pledged that we would work together to restore our economic health, reclaim our leadership position in the world, advance our national security, and invest in the future. We promised to restore fiscal responsibility and began by instituting tough pay-as-you-go rules. In the first 100 hours of the 110th Congress, the House began to make good on our promises.--With bipartisan support, we passed budget procedures enforcing discipline and transparency in congressional spending. With bipartisan support, we also passed legislation to implement recommendations of the 9/11 Commission, increased the minimum wage, paved the way for lower prescription drug costs, cut student loan costs, and redirected oil subsidies towards investments in renewable energy. We did all of this while maintaining our commitment to fiscal discipline. The 2008 budget resolution advances these priorities.--The budget balances in 2012 while accommodating additional tax relief for millions of middle-income families. It allocates funding for national priorities like children's health care and education. It begins to reverse six years of disinvestment in education, infrastructure, and innovation. The budget resolution is the crucial next step to realize the initiatives we have developed, to move the country forward, and to set us on a course to build the future we want for our children and grandchildren. Correcting the fiscal course of the country cannot be achieved overnight.--The fiscal outlook we are confronting has deteriorated dramatically over the past six years. In 2001, the Administration inherited a projected ten-year (2002-2011) budget surplus of $5.6 trillion. Within two years, that surplus was gone and the United States began accumulating a mountain of national debt, adding $2.8 trillion to our federal debt burden since 2001. Most of this debt has been purchased by foreign investors, making the U.S. economy more susceptible to economic and political pressure from abroad. We have a responsibility to clean up the fiscal mess that we have inherited.--Deficits matter. The choice to live beyond our means comes at the expense of our children and grandchildren who will have to pay off that debt. Deficits also hurt economic growth by depressing national saving, generating less capital for investment for the future. This leads to lower productivity and wages. The President's budget continues the fiscal approach that has brought us large deficits and growing debt. By contrast, the 2008 budget resolution takes a necessary step towards eliminating our long-term budget deficit by adhering to the pay-as-you-go principle. A balanced budget must be accompanied by balanced priorities.--While regaining control over our economic future is critical, we must do so within the context of honoring our obligations. For the first time in six years, the congressional budget resolution will return the federal budget to balance, in 2012, while providing sufficient resources to defend our country, deliver critical services to children and families, grow the economy, and preserve our planet. 2008 BUDGET RESOLUTION: INVESTING IN THE FUTUREThe 2008 budget is a critical step toward fulfillment of the commitments we have made to the American people. Within the context of a balanced budget, the resolution achieves key objectives in six areas: FISCAL RESPONSIBILITYLeads to a budget surplus in 2012 and years thereafter, in contrast to the President's budget which remains in deficit Provides for greater deficit reduction than the Administration over five years Upholds the pay-as-you-go principle DEFENDING OUR NATIONProvides robust defense funding levels while targeting resources on the most pressing security concerns Increases funding for veterans' health care and services by $5.4 billion (14.4 percent) above current services Provides more homeland security funding than the Administration Provides funding for the 9/11 Commission recommendations PUTTING CHILDREN AND FAMILIES FIRSTFacilitates an increase of $50 billion to expand children's health insurance to cover millions of additional uninsured children Provides $3.0 billion over current services, and $7.9 billion more than the President, for education, training, and social services, which means more funding for No Child Left Behind, special education, and aid to help students afford college Accommodates relief from the Alternative Minimum Tax for millions of middle-income taxpayers, as well as extension of middle-income tax cuts Increases funds for Head Start and child care Provides new funding to assist communities and rebuild housing in the aftermath of Hurricane Katrina Rejects the President's cut to the Social Services Block Grant program Includes an affordable housing initiative GROWING OUR ECONOMYBegins to reverse six years of high deficits and mounting debt Funds the House Leadership's innovation agenda, putting us on a path to double funding for NSF and providing significant increases in K-12 math and science education Accommodates policies to renew and re-authorize the farm bill Provides funding to reauthorize FAA programs and fully funds the highway bill Increases funding for programs such as Community Development Block Grants to promote economic development in local communities PRESERVING OUR PLANETAccommodates comprehensive energy legislation promoting renewable energy, moving toward energy independence Increases conservation funding Rejects Administration cuts in the Environmental Protection Agency and in environmental programs AN ACCOUNTABLE AND EFFICIENT GOVERNMENTInstitutes tough program integrity initiatives to crack down on wasteful or fraudulent spending in Social Security, Medicare, and Unemployment Insurance programs Supports IRS enforcement to collect unpaid taxes from those who are not paying what they owe, helping to close the roughly $300 billion tax gap Provides resources to reduce huge backlogs in claims processing in the Veterans Administration and Social Security Administration Directs committees to identify wasteful and lower priority spending that can be cut in order to fund more pressing needs.
MINORITY VIEWS OF THE BILL Minority Views IRRESOLUTION ON THE BUDGET`It's always easier to defer, to kick the can down the road to avoid making choices.'--Senate Budget Committee Chairman Kent Conrad, on 60 Minutes, 4 March 2007. The document reported by the Committee on the Budget reflects a staggering set of contradictions. While claiming to reject the largest tax increase in American history, the measure's revenue figures rely on that very tax hike to reach balance. While promising more than $115 billion in new spending initiatives, the document's allocations support none of them. Having heard extensive testimony about the need to reform government entitlements, the Democrats could offer no more than a negligible $75 million in reconciled savings--and that only as a gimmick to protect a forthcoming reauthorization bill from a Senate filibuster; and the savings are spent elsewhere anyway. If a budget is a plan for financing one's objectives, whatever they are--if it assigns dollars to specific goals--the Democrat measure is not a budget. If budgeting is intrinsic to governing, the Democrat proposal does neither; and it offers no resolution of the principal fiscal issues that face the Nation and the government. But if taken seriously, the Democrat budget insists that the right formula for America is bigger government, more spending, and ever-higher taxes. It fails completely to recognize a fundamental truth expressed by President Reagan in his first inaugural: `We are a Nation that has a government--not the other way around.' The Democrat budget proposes the largest tax increase in American history--$392.5 billion over 5 years--mainly to finance immense new spending through 2012. It also puts off entitlement reform for at least 5 years, despite repeated warnings during committee hearings that delaying reform invites a fiscal and economic crisis for these programs. The principal failures of the Democrat budget are described below. HIGHER TAXESThe Largest Tax Increase in History. Although the Democrats try to claim otherwise, revenue numbers in the budget clearly show tax increases totaling $392.5 billion over 5 years, compared with retaining provisions of the 2001 and 2003 tax laws that are currently in place. Taxes increase by $231 billion in 2012 alone, which is even greater than the $153-billion surplus the budget claims. mingraf1.eps Tax Increases Are Widespread. Tax increases would hit middle-income families, low-income earners, families with children, small businesses, and a range of others. Here is a sampling of the implicit tax increases: ---------------------------------------------------------------- Tax Increase 5-Year Total ---------------------------------------------------------------- Increase in Marginal Rates $182 billion Reduction of Child Tax Credit $27 billion Increase in Marriage Penalty $13 billion Increase in Death Tax $91 billion Increase in Capital Gains and Dividends Tax Rates $32.5 billion Other Tax Increases $47 billion ---------------------------------------------------------------- The budget contains language, in its novel `Policy' title (Title IV) claiming its intent to protect current tax rates, and not to raise taxes. But the language is not supported by the budget figures, which embrace the automatic tax increases. Further, as noted, the Democrat budget cannot reach balance without them. Sets the Stage for at Least $115 Billion in Further Tax Hikes. Ten of the budget's 12 `reserve funds' call for more than $115 billion in higher spending if offset with commensurate savings or--as is far more likely--higher taxes. mingraf2.eps Ignoring Economic Consequences. These massive tax increases would likely reverse the economic gains that have developed since adoption of the 2001 and 2003 tax laws, which include: 7.6 million new jobs--an average of 168,500 per month; growth in real gross domestic product [GDP] of 3.5 percent per year over the past 15 quarters; increased business investment for the past 15 quarters; and a Dow Jones Industrial average roughly 41 percent higher than the 2003 level. Ignoring Fiscal Benefits. The Democrat tax increases also threaten the substantial deficit reduction that has occurred in the past several years. -Revenue increased in double-digit percentages in 2005 and 2006, and 9.3 percent in the first five months of fiscal year 2007--reaching 18.5 percent of GDP, higher than the average of the past four decades. -This revenue growth has been the principal factor in reducing the budget deficit from $412.7 billion in 2004 to an estimated $176 billion this year, according to the Congressional Budget Office. No AMT Fix. The Democrats fail to provide, in their numbers, even a one-year patch for the alternative minimum tax [AMT]. Instead, the budget employs a `reserve fund' that allows AMT relief only if offset by equivalent tax increases or spending cuts--which are not spelled out. The budget also fails to extend the research and development credit and other routine tax provisions. The `Mystical Tax Gap.' The budget includes budget enforcement language allowing an unspecified amount of increased appropriations to improve tax compliance--apparently seeking to close the so-called `tax gap.' The Commissioner of the Internal Revenue Service has testified the IRS could collect, at best, about $20 billion of these taxes 5 years after implementing specific policies recommended in the President's budget. Yet the Democrats, during markup, insisted that closing the mystical tax gap could prevent many of the tax increases their budget contains.
HUGE SPENDING INCREASESHefty Year-to-Year Appropriations Increase. Having already increased current-year spending by $6.1 billion, and adding more than $20 billion to the Iraq supplemental, Democrats in their budget propose another increase of more than $22.5 billion in nondefense, nonemergency annual appropriations for fiscal year 2008. Increases `Advance Appropriations.' The budget also increases by about $2 billion, to $25.6 billion, the amount that can be appropriated in fiscal year 2009 or later. Outspends Inflation Later. For the years 2009-12, the budget assumes annual nondefense, nonemergency appropriations will increase by an average of 2.4 percent per year, which is still greater than the projected rate of inflation. Reckless Entitlement Spending Increases. Despite warnings by numerous witnesses about the unsustainable rate of entitlement spending, the budget's reserve funds nevertheless provide for higher mandatory spending. As noted above, 10 of the budget's 12 `reserve funds' create avenues for more than $115 billion in higher spending if offset with higher taxes (or spending reductions, which appear nowhere in the Democrat proposal). NO SIGNIFICANT REFORM OR OFFSETSTHE NEED FOR ENTITLEMENT REFORMDuring committee hearings over the past several weeks, a series of expert witnesses testified to the unsustainable growth of entitlement programs--especially Medicare and Medicaid--and the urgent need to begin reforming them. Among the most significant statements from these hearings were the following: -Without `early and meaningful action' to address the rapid growth of entitlements, `the U.S. economy could be seriously weakened, with future generations bearing much of the cost.'--Federal Reserve Chairman Ben S. Bernanke, Budget Committee hearing, 28 February 2007. -`Health care is the number one fiscal challenge for the Federal and State governments * * * it is the number one competitiveness challenge for American business; and * * * it is a growing challenge for American families. If there is one thing that can bankrupt America, it is health care. We need dramatic and fundamental reforms.'--Comptroller General David M. Walker, Budget Committee hearing, 23 January 2007. -The rising costs of government entitlements are a `fiscal cancer' that threatens `catastrophic consequences for our country' and could `bankrupt America.'--Comptroller General Walker on 60 Minutes, 4 March 2007. A legion of facts support these concerns: -Even if taxes were increased by $392.5 billion in the next 5 years, as proposed in the Democrat budget, Federal spending at its current rate will outpace Federal revenue by increasing amounts over the next several decades--mainly due to entitlements, which are growing at an average of 6 percent per year--twice as fast as inflation, and faster than the entire economy. -The principal drivers of this problem are Medicare and Medicaid, which are growing at 7 percent to 8 percent per year. Even if the budget were balanced today, these two programs alone would drive it right back into deficit. With the forthcoming retirement of the baby boomers, the situation will only get worse. -By 2040, three entitlement programs--Social Security, Medicare, and Medicaid alone--will consume 20 percent of the Nation's economy. That is equivalent to the cost of the entire Federal Government today; and it will take twice the current rate of taxes just to maintain the current level of entitlement benefits. -In less than a decade, entitlements will take up 62 percent of the entire Federal budget--and they will keep growing until they crowd out all other spending--including education, science, the environment, agriculture, and even homeland security and defense. But this challenge is also an opportunity--an opportunity to make these programs better, more efficient, more responsive, more sustainable for the future. DEMOCRAT BUDGET IGNORES THE WARNINGS----AND THE OPPORTUNITYIgnoring all of this, however, the Democrat budget puts off any significant reform for at least 5 years--allowing the problem to worsen. Instead, it succumbs to the temptation noted by Senate Budget Committee Chairman Kent Conrad: `It's always easier to defer, to kick the can down the road to avoid making choices.' (60 Minutes, 4 March 2007.) The only savings in the budget are a negligible $75 million reconciled to the Education and Labor Committee (which is merely a lever to get higher education reauthorization considered under reconciliation procedures and the savings are spent elsewhere); and $410 million in receipts from selling defense commodities such as Tungsten. These are not reforms, and they do nothing to address the massive entitlement problem. In contrast, the Deficit Reduction Act of 2005 saved nearly $40 billion over 5 years, and the President's budget for fiscal year 2008 proposed $96 billion in mandatory savings. OTHER FAILURES OF THE DEMOCRAT BUDGETHere are some of the other flaws in the budget: NO ACCOUNTABILITYRetains Bias Favoring Higher Spending, Higher Taxes. The budget assumes that tax relief expires--causing automatic tax increases--but spending programs continue indefinitely. Fails to Strengthen PAYGO. It retains the weak House pay-as-you-go [PAYGO] rule, which allows Democrats to chase higher spending with higher taxes, and to enact spending increases immediately with savings that do not occur until later. No Emergency Set-Aside. The budget eliminates the domestic emergency set-aside contained in the current budget resolution, and provides no criteria for domestic emergency spending--which is exempt from budget disciplines. GIMMICKSStraw Man Reserve Funds. Instead of providing funding for promised initiatives, the budget includes 10 reserve funds that promise extra funding for pet initiatives if offsets are included. The reserve funds have no real effect because budget rules already permit initiatives not assumed in the budget to be financed by offsets. No Defense Firewall. By not imposing a firewall around defense, the budget allows Democrats to continue moving money from defense to nondefense, as they did with Base Realignment and Closure [BRAC] Commission funding. DOUBLE STANDARDNo AMT Reform. After repeatedly blasting Republicans for failing to provide a permanent reform of the alternative minimum tax [AMT], the Democrat budget fails to provide even a one-year patch. Instead the budget employs a `reserve fund' that allows AMT relief only if offset by equivalent tax increases or spending cuts--which are not spelled out. No Additional Iraq Funding. The budget adopts the President's requested levels for Iraq funding. Yet after criticizing the President for showing no Iraq funding after 2009, the budget adopts the same policy. CONCLUSIONBudgeting is the process of fleshing out policy objectives with the substance of financial resources. But the Democrat proposal fails this basic reason for writing a budget: it is all intention with no real follow-through. If taken seriously, however, the Democrat budget
insists that the answer to America's challenges is more government, more
spending, more taxes. This has never been the correct answer--and it isn't
now. ADDITIONAL MINORITY VIEWS FY2008 BUDGET RESOLUTIONThe Budget Resolution should assume funding of the Poison Control Program at the prior year level. The Poison Control Program currently supports a mix of grantees--most grantees serve entire states, but a few serve multistate regions and, in a handful of cases, more than one grantee serves a single state. The Committee should generally be supportive of this current structure and the budget resolution should assume no changes will be made in this approach. The Committee also should assume that Poison control funds will continue to be allocated to all certified centers based on service population. Patrick McHenry,
SPENDING BY BUDGET FUNCTION
TITLE I--RECOMMENDED LEVELS AND AMOUNTSEXPLANATION OF COMMITTEE RECOMMENDATIONS BY FUNCTION- FUNCTION 050: NATIONAL DEFENSE- FUNCTION SUMMARYThe National Defense function includes the military activities of the Department of Defense (DoD), the nuclear-weapons related activities of the Department of Energy (DoE) and the National Nuclear Security Administration, the national security activities of several other agencies such as the Selective Service Agency, and portions of the activities of the Coast Guard and the Federal Bureau of Investigation. The programs in this function include: the pay and benefits of active, Guard, and reserve military personnel; DoD operations including training, maintenance of equipment, and facilities; health care for military personnel and dependents; procurement of weapons; research and development; construction of military facilities, including housing; research on nuclear weapons; and the cleanup of nuclear weapons production facilities. FUNCTION LEVELS AND PRIORITIESFUNCTION 050: National Defense [In billions of dollars] ------------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------ Total Spending: Budget Authority 525.8 507.0 534.7 545.2 550.9 559.8 2,697.6 Outlays 534.3 514.4 524.4 536.4 547.6 548.2 2,671.0 Discretionary: Budget Authority 522.4 503.8 531.6 542.0 548.0 556.9 2,682.4 Outlays 531.1 511.1 521.2 533.2 544.7 545.3 2,655.6 Mandatory Spending: Budget Authority 3.4 3.1 3.1 3.2 2.9 2.9 15.1 Outlays 3.2 3.3 3.2 3.2 2.9 2.9 15.4 ------------------------------------------------------------------ The defense of our nation ranks first among our priorities, and this budget resolution accordingly provides robust funding for Function 050 (National Defense). This resolution calls, however, for a reallocation of resources to address threats facing the nation and to guarantee first-rate health care for members of our armed forces. The resolution includes assumptions on specific defense policy in Title IV, Section 402. The National Commission on Terrorist Attacks Upon the United States (commonly referred to as the 9/11 Commission) identified terrorists with weapons of mass destruction as one of the nation's gravest threats. It recommended that Congress supply more resources to secure nuclear weapons and the fissile materials used in making these weapons. It is the policy of this budget resolution that non-proliferation programs, such as the Cooperative Threat Reduction program, be given greater priority and higher funding. High among our priorities is the health care guaranteed our armed forces, not only while they are in harm's way, but when they return from combat with injuries. For that reason, this resolution opposes Tricare fee increases and calls for a substantial increase in the veterans' health care system. The budget resolution notes the upcoming recommendations of the President's Commission on Care for America's Returning Wounded Warriors and other government investigations in connection with the substandard care at Walter Reed Army Medical Center, and allows funds for action when those recommendations are received. It is the policy of the resolution that acquisition programs such as missile defense and satellite procurement be funded at lower, but still robust levels. Development of space-based interceptors as part of the missile defense program should be de-emphasized and satellite development and procurement should proceed along a more measured schedule. DoD's satellite programs have experienced significant cost growth and the President's request for satellite acquisition reflects a 26 percent increase above the 2007 enacted level. The budget resolution recognizes the need for DoD to root out wasteful spending with far more diligence. Seventeen years after passage of the Chief Financial Officers Act of 1990, DoD still cannot pass a standard audit. The Department cannot adequately track what it owns or the spending in its annual budgets. DoD has allowed the cost of its major acquisition programs to grow at an unsustainable rate. The Department's major acquisition programs grew by $317 billion above their initial projections from 2002 to 2006. DoD has awarded contracts for its foreign deployments that have been grossly more wasteful than domestic contracts, especially in Iraq. Furthermore, DoD continues to fund weapons systems that were developed years ago to counter Cold War-era threats, which may not be as effective in protecting the nation from today's threats. Over the last six years, the Government Accountability Office (GAO) has performed numerous audits of DoD's financial management, contracting, and business practices. GAO made 2,544 recommendations, of which 1,378 have yet to be implemented. The resolution assumes that enhancing accounting practices at DoD and implementing many GAO recommendations would yield substantial savings that could be applied to meet critical defense priorities. The resolution also directs the committees with jurisdiction over defense and armed services to conduct more oversight with the objective of ferreting out wasteful practices, fraud, and abuse. For mandatory programs, the budget resolution matches the President's assumptions regarding offsetting receipts. FUNCTION 150: INTERNATIONAL AFFAIRS- FUNCTION SUMMARYFunction 150 contains funding for all U.S. international activities, including: operating U.S. embassies and consulates throughout the world; providing military assistance to allies; aiding developing nations; dispensing economic assistance to fledgling democracies; promoting U.S. exports abroad; making U.S. payments to international organizations; and contributing to international peacekeeping efforts. Funding for all of these activities constitutes about one percent of the federal budget. The major agencies in this function include the Departments of Agriculture, State, and the Treasury; the United States Agency for International Development; and the Millennium Challenge Corporation. FUNCTION LEVELS AND PRIORITIESFUNCTION 150: International Affairs [In billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 28.8 34.7 35.4 35.6 36.1 36.5 178.3 Outlays 31.3 33.1 32.6 32.7 33.0 33.6 165.0 Discretionary: Budget Authority 32.8 35.3 35.6 36.0 36.3 36.7 179.8 Outlays 36.7 35.1 35.0 35.3 35.6 36.2 177.2 Mandatory Spending: Budget Authority -4.0 -0.6 -0.2 -0.3 -0.2 -0.2 -1.5 Outlays -5.4 -2.0 -2.4 -2.6 -2.6 -2.6 -12.3 ------------------------------------------------------------ The function's negative mandatory budget authority and outlay levels reflect receipts of the foreign military sales trust fund, the repayment of loans and credits by foreign nations, and the liquidation of economic assistance loans, foreign military financing loans, Export-Import Bank loans, and housing and other credit guaranty programs. The resolution's discretionary budget authority for 2008 is $2.0 billion (5.9 percent) more than the amount needed to maintain purchasing power at the 2007 level. The resolution matches the President's Function 150 request for activities related to the United States' overseas military deployments and the Emergency Plan for AIDS Relief, which includes the Global HIV/AIDS Initiative. The Committee also notes the importance of adequate funding for core U.S. development assistance and other high priority programs. Consistent with the President's budget, the resolution also provides full funding to continue agreements that the United States reached in 1998 with Israel and Egypt regarding levels of military financing and economic support. The resolution provides additional funding for 2008 for the McGovern-Dole International Food for Education and Child Nutrition Program. This program has been demonstrated to help reduce child hunger and malnutrition, and increase enrollment and attendance in schools in beneficiary countries. The Committee notes the large amount of unobligated funding that is still available for the Millennium Challenge Corporation, which has received almost $6.0 billion in total appropriations from fiscal years 2004 through 2007. The Committee also notes the strong support enjoyed by H.R. 1595, a measure designed to provide compensation to the Guamanian victims of the Imperial Japanese military occupation during World War II. FUNCTION 250: GENERAL SCIENCE, SPACE AND TECHNOLOGY- FUNCTION SUMMARYThis function includes the National Science Foundation (NSF), programs at the National Aeronautics and Space Administration except for aviation programs, and general science programs at the Department of Energy (DOE). FUNCTION LEVELS AND PRIORITIESFUNCTION 250: General Science, Space, and Technology [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 25.1 27.6 28.6 29.8 31.1 32.4 149.6 Outlays 24.5 26.5 28.4 29.5 30.1 31.4 145.8 Discretionary: Budget Authority 25.0 27.5 28.5 29.7 31.0 32.3 149.0 Outlays 24.4 26.3 28.3 29.4 30.0 31.3 145.2 Mandatory Spending: Budget Authority 0.1 0.1 0.1 0.1 0.1 0.1 0.6 Outlays 0.1 0.1 0.1 0.1 0.1 0.1 0.6 ------------------------------------------------------------ Funding in Function 250 exceeds the funding levels in the President's budget and the current services level for all five years in the budget window. Additional increases for scientific research and education are included in Function 270 (Energy), Function 300 (Environment and Natural Resources), Function 350 (Agriculture), Function 370 (Commerce and Housing Credit), Function 400 (Transportation), Function 500 (Education, Training, Employment, and Social Services), and Function 550 (Health), all of which receive more funding than the President requested. These increases will support the goals of the House Leadership's Innovation Agenda: to put NSF funding on a path toward doubling, to train more qualified science and math teachers, and to invest in basic research on energy technologies. FUNCTION 270: ENERGY- FUNCTION SUMMARYFunction 270 contains civilian energy and environmental programs in the Department of Energy (DOE). This function also includes the Rural Utilities Service of the Department of Agriculture, the Tennessee Valley Authority, the Federal Energy Regulatory Commission, and the Nuclear Regulatory Commission. This function does not include DOE's national security activities, which are in Function 050 (National Defense), or its basic research and science activities, which are in Function 250 (General Science, Space and Technology). FUNCTION LEVELS AND PRIORITIESFUNCTION 270: Energy [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 2.9 3.2 3.1 3.1 3.2 3.3 16.0 Outlays 1.4 1.1 1.5 1.6 1.7 2.0 7.9 Discretionary: Budget Authority 4.2 4.6 4.5 4.6 4.7 4.8 23.1 Outlays 3.9 4.3 4.6 4.6 4.7 4.8 23.0 Mandatory Spending: Budget Authority -1.2 -1.4 -1.4 -1.4 -1.4 -1.5 -7.2 Outlays -2.5 -3.2 -3.1 -3.0 -3.0 -2.8 -15.1 ------------------------------------------------------------ The resolution provides funding above the President's request and the level needed to maintain current services for Function 270. This increased funding could be used for research, development, and deployment of renewable and alternative energy technology and resources. This resolution establishes a reserve fund to facilitate the development of conservation and efficiency technologies, clean domestic renewable energy resources, and alternative fuels that will reduce our reliance on foreign oil. The federal government, and particularly the Department of Energy, should take the lead in research and development, and to that end, this resolution includes an increase in Function 270 above baseline, while emphasizing that this is a first step toward increases that need to come soon and be substantial. In the meantime, the Department of Energy should husband its resources and program work at the national laboratories to advance the technologies of energy conservation and efficiency and of clean, renewable energy. Other agencies and departments of the government should join this effort. This resolution recognizes, for example, the role that the Department of Agriculture could take in developing new energy sources such as cellulosic ethanol, and approves this mission among those cited in Function 350. Funding sources for research and development are scattered throughout the budget. These sources need to be inventoried, and where possible, refocused on research and development of clean and renewable energies. FUNCTION 300: NATURAL RESOURCES AND ENVIRONMENT- FUNCTION SUMMARYFunction 300 includes programs concerned with environmental protection and enhancement; recreation and wildlife areas; and the development and management of the nation's land, water, and mineral resources. It includes programs within the following federal departments and agencies: Agriculture, Commerce, Interior, Transportation, the Army Corps of Engineers, and the Environmental Protection Agency (EPA). FUNCTION LEVELS AND PRIORITIESFUNCTION 300: Natural Resources and Environment [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 31.3 32.8 33.5 34.5 35.2 36.2 172.2 Outlays 32.9 34.9 35.3 35.6 36.0 36.5 178.3 Discretionary: Budget Authority 30.4 31.4 32.2 33.0 33.9 34.8 165.3 Outlays 32.0 34.1 34.3 34.4 34.9 35.3 173.0 Mandatory Spending: Budget Authority 1.0 1.4 1.3 1.4 1.2 1.4 6.8 Outlays 1.0 0.8 1.0 1.2 1.0 1.3 5.2 ------------------------------------------------------------ The resolution rejects the President's proposed cuts to priority programs, such as the Land and Water Conservation Fund, the Fish and Wildlife Service's wildlife refuge system, the EPA's grants to States and Tribes to address water and air quality, and other EPA programs. It also includes funding to address high-priority brownfield redevelopment concerns. In addition, the resolution accommodates the President's recommendation to increase funding for the operation and maintenance of the national park system. The resolution also includes a deficit-neutral reserve fund to facilitate the reauthorization of the farm bill, providing resources for such objectives as to secure an economic safety net for agricultural producers, conserve our natural resources, and address nutrition needs. FUNCTION 350: AGRICULTURE- FUNCTION SUMMARYFunction 350 includes farm income stabilization, agricultural research, and other services administered by the U.S. Department of Agriculture. The discretionary programs include research and education programs, economics and statistics services, administration of the farm support programs, farm loan programs, meat and poultry inspection, and a portion of the Public Law (P.L.) 480 international food aid program. The mandatory programs include commodity programs, crop insurance, and certain farm loans. FUNCTION LEVELS AND PRIORITIESFUNCTION 350: Agriculture [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 21.5 20.4 20.9 21.1 21.2 21.4 105.0 Outlays 19.7 19.5 20.1 20.1 20.4 20.9 101.0 Discretionary: Budget Authority 5.8 5.8 6.0 6.1 6.3 6.5 30.7 Outlays 5.8 5.8 5.9 6.1 6.2 6.4 30.4 Mandatory Spending: Budget Authority 15.7 14.6 15.0 15.0 14.9 15.0 74.3 Outlays 13.9 13.7 14.1 14.1 14.2 14.5 70.6 ------------------------------------------------------------ The budget resolution provides sufficient funding to bolster commodity support, agricultural research, and animal and plant inspection programs. The resolution also includes a deficit- neutral reserve fund to facilitate the reauthorization of the farm bill, providing resources for such objectives as to secure an economic safety net for agricultural producers, conserve our natural resources, and address nutrition needs. FUNCTION 370: COMMERCE AND HOUSING CREDIT- FUNCTION SUMMARYFunction 370 includes mortgage credit, the Postal Service, deposit insurance, and other advancement of commerce (the majority of the discretionary and mandatory spending in this function). The mortgage credit component of this function includes housing assistance through the Federal Housing Administration, the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the Government National Mortgage Association (Ginnie Mae), and rural housing programs of the Department of Agriculture. The function also includes net postal service spending and spending for deposit insurance activities of banks, thrifts, and credit unions. Most of the Commerce Department is provided for in this function, including the International Trade Administration, Bureau of Economic Analysis, Patent and Trademark Office, National Institute of Standards and Technology, National Telecommunications and Information Administration, and the Bureau of the Census. Finally, the function also includes funding for independent agencies such as the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Trade Commission, the Federal Communications Commission, and the majority of the Small Business Administration. FUNCTION LEVELS AND PRIORITIESFUNCTION 370: Commerce and Housing Credit [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 10.2 11.0 12.1 14.8 8.6 8.5 55.0 Outlays 1.2 3.8 3.1 4.5 1.7 0.8 13.9 Discretionary: Budget Authority 2.7 4.4 5.3 9.1 4.0 4.0 26.9 Outlays 2.9 4.4 4.9 7.1 5.7 4.5 26.6 Mandatory Spending: Budget Authority 7.5 6.6 6.8 5.7 4.6 4.5 28.1 Outlays -1.8 -0.6 -1.8 -2.7 -4.0 -3.7 -12.7 ------------------------------------------------------------ The discretionary function total includes significantly increased funding for the Bureau of Census, reflecting continued preparation for the 2010 census. For 2008, and over the following four years, funding in Function 370 is above the level in the President's budget. FUNCTION 400: TRANSPORTATIONFUNCTION SUMMARYFunction 400 consists mostly of the programs administered by the Department of Transportation, including programs for highways, mass transit, aviation, and maritime activities. This function also includes two components of the Department of Homeland Security: the Coast Guard and the Transportation Security Administration. In addition, this function includes several small transportation-related agencies and the research program for civilian aviation at the National Aeronautics and Space Administration (NASA). FUNCTION LEVELS AND PRIORITIESFUNCTION 400: Transportation [in billions of dollars] ------------------------------------------------------------------- 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------- Total Spending: Budget Authority 81.3 82.7 76.3 77.3 78.3 79.2 393.7 Outlays 74.7 80.8 83.9 86.1 87.0 88.8 426.7 Discretionary: Budget Authority 26.1 25.4 27.5 28.3 29.1 30.0 140.3 Outlays 73.0 78.5 D81.7 83.9 84.7 86.5 415.3 Mandatory Spending: Budget Authority 55.2 57.3 48.8 49.0 49.1 49.2 253.4 Outlays 1.7 2.3 2.2 2.2 2.3 2.3 11.4 ------------------------------------------------------------------- The resolution fully funds the highway, safety, and transit programs authorized in the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). Specifically, this resolution includes both the revenue aligned budget authority (RABA) and the funding for transit capital projects that the President's 2008 budget cuts. In addition, this resolution maintains Amtrak, provides additional funding for grants to airports, and rejects the President's cuts to aviation programs within NASA. FUNCTION 450: COMMUNITY AND REGIONAL DEVELOPMENT- FUNCTION SUMMARYFunction 450 includes federal programs to improve community economic conditions, promote rural development, and assist in federal preparations for and response to disasters. This function provides appropriated funding for the Community Development Block Grant, Department of Agriculture rural development programs, the Bureau of Indian Affairs, the Federal Emergency Management Agency, and other disaster mitigation and community development-related programs. It also provides mandatory funding for the federal flood insurance program. FUNCTION LEVELS AND PRIORITIESFUNCTION 450: Community and Regional Development [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 15.7 15.0 13.9 14.1 14.3 14.5 71.9 Outlays 28.3 22.0 20.5 19.2 17.6 15.1 94.5 Discretionary: Budget Authority 13.0 13.7 13.9 14.1 14.3 14.5 70.6 Outlays 25.7 21.0 20.7 19.5 17.9 15.3 94.3 Mandatory Spending: Budget Authority 2.8 1.3 0.0 0.0 0.0 0.0 1.4 Outlays 2.6 1.1 -0.2 -0.2 -0.2 -0.2 0.2 ------------------------------------------------------------ The budget resolution provides more than the President's 2008 discretionary funding level for Function 450, rejecting the President's cuts to the Community Development Block Grant (CDBG) program and providing additional funds for this and other key priorities like rural development and disaster preparedness. FUNCTION 500: EDUCATION, TRAINING, EMPLOYMENT AND SOCIAL SERVICES- FUNCTION SUMMARYFunction 500 includes funding for the Department of Education, social services programs within the Department of Health and Human Services, and employment and training programs within the Department of Labor. It also contains funding for the Library of Congress and independent research and art agencies such as the Corporation for Public Broadcasting, the Smithsonian Institution, the National Gallery of Art, the John F. Kennedy Center for the Performing Arts, the National Endowment for the Arts, and the National Endowment for the Humanities. FUNCTION LEVELS AND PRIORITIESFUNCTION 500: Education, Training, Employment and Social Services [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 92.8 92.5 96.8 98.3 98.4 98.7 484.7 Outlays 92.2 91.1 94.0 96.0 97.3 96.9 475.3 Discretionary: Budget Authority 80.3 82.3 85.9 86.8 87.6 88.5 431.1 Outlays 80.4 82.4 84.5 85.9 87.0 87.9 427.7 Mandatory Spending: Budget Authority 12.5 10.1 10.9 11.6 10.8 10.2 53.6 Outlays 11.9 8.8 9.5 10.1 10.3 9.0 47.6 ------------------------------------------------------------ The 2008 budget resolution specifically rejects the President's cuts to education, including his plan to eliminate many education programs. The resolution also rejects the President's steep cuts to job training and social services programs, including the Community Services Block Grant and the Social Services Block Grant. In contrast to the President's funding cuts, the budget resolution makes a down payment towards addressing long-standing needs in education, training, and social services. To that end, the resolution provides an appropriated program level for Function 500 that is $7.9 billion above the 2008 level in the President's budget. Those additional resources include $5.9 billion in 2008 funding and an increase of $2 billion in advance 2009 funding. The resolution's increased funding could be used for vital programs that help children and adults who most need assistance, including Head Start, Title I and other elementary and secondary education programs authorized under the No Child Left Behind Act, and employment training and national service programs such as VISTA. The additional funding also could bolster the federal government's commitment to cover a growing share of the cost of special education under the Individuals with Disabilities Education Act. Finally, the increased funds could help secure college access, equity, and success for every American by raising the maximum Pell Grant to at least $4,600, maintaining Supplemental Opportunity Educational Grants and the Leveraging Educational Assistance Partnerships, and broadening access to Hispanic-serving institutions, Historically Black Colleges and Universities, and other high-quality educational opportunities. The resolution also contains a reserve fund to accommodate legislation that makes college more affordable. FUNCTION 550: HEALTH- FUNCTION SUMMARYFunction 550 includes most direct health care services programs. Other health programs in this function fund anti-bioterrorism activities, national biomedical research, protecting the health of the general population and workers in their places of employment, providing health services for under-served populations, and promoting training for the health care workforce. Some of the agencies funded in this function include the National Institutes of Health (NIH), Centers for Disease Control and Prevention, Health Resources and Services Administration, and the Food and Drug Administration. The major mandatory programs in this function are Medicaid, the State Children's Health Insurance Program (SCHIP), federal and retirees' health benefits, and health care for Medicare-eligible military retirees. FUNCTION LEVELS AND PRIORITIESFUNCTION 550: Health [in billions of dollars] ------------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------ Total Spending: Budget Authority 267.9 286.8 307.8 325.9 347.6 370.8 1,638.9 Outlays 268.2 286.3 306.0 325.7 346.6 369.7 1,634.3 Discretionary: Budget Authority 52.1 54.2 57.5 56.5 57.7 58.9 284.8 Outlays 52.7 54.1 55.5 56.1 56.6 57.7 280.0 Mandatory Spending: Budget Authority 215.8 232.5 250.3 269.4 289.9 311.9 1,354.1 Outlays 215.5 232.2 250.5 269.6 290.0 312.0 1,354.3 ------------------------------------------------------------------ The discretionary resources for Function 550 for 2008 represent an increase over both the 2007 level and the President's request. The resolution increases resources for public health programs to provide for advances in science, improvements in health, access to quality health care for underserved populations, and other critical programs. Programs in Function 550 are also addressed in the resolution's deficit-neutral reserve funds for SCHIP and for Transitional Medical Assistance. FUNCTION 570: MEDICARE- FUNCTION SUMMARYFunction 570 (Medicare) includes only the Medicare program, which provides health insurance to senior citizens and persons with disabilities. Congress provides an annual appropriation for the costs of administering and monitoring the Medicare program. Nearly 99 percent of spending in this function occurs on the mandatory side of the budget, and almost all of the mandatory spending consists of payments for Medicare benefits. FUNCTION LEVELS AND PRIORITIESFUNCTION 570: Medicare [in billions of dollars] ------------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------ Total Spending: Budget Authority 365.2 389.6 416.7 442.4 489.1 486.8 2,224.6 Outlays 370.2 389.7 416.4 442.6 489.1 486.4 2,224.2 Discretionary: Budget Authority 4.8 5.0 5.2 5.4 5.7 6.0 27.3 Outlays 4.9 5.0 5.2 5.4 5.7 5.9 27.2 Mandatory Spending: Budget Authority 360.4 384.6 411.5 436.9 483.4 480.9 2,197.3 Outlays 365.3 384.7 411.2 437.2 483.5 480.5 2,197.0 ------------------------------------------------------------------ The resolution assumes the extension of Medicare premium assistance for qualified individuals with incomes between 120 and 135 percent of the federal poverty level and limited financial resources. The resolution assumes that savings from Medicare program efficiency improvements will offset the costs of extending the premium assistance program as well other initiatives to improve the Medicare program for beneficiaries. The resolution assumes targeted assistance to hospitals with 100 beds or more that have faced a reduction in Medicare disproportionate share hospital payments due to assignment to a Micropolitan area. The resolution accommodates a discretionary cap adjustment of $183 million for additional activities aimed at detecting and preventing Medicare fraud. The Health Care Fraud and Abuse Control program--a joint effort of the Department of Health and Human Services, the HHS Office of Inspector General, and the Department of Justice--generated roughly $4 in program savings for every dollar spent in 2004 and 2005. The resolution also contains a reserve fund to accommodate legislation for Medicare program improvements. FUNCTION 600: INCOME SECURITY- FUNCTION SUMMARYFunction 600 consists of a range of income security programs that provide cash or near-cash assistance (e.g., housing, nutrition, and energy assistance) to low-income persons, and benefits to certain retirees, persons with disabilities, and the unemployed. Housing assistance programs account for the largest share of discretionary funding in this function. Major federal entitlement programs in this function include unemployment insurance, trade adjustment assistance income support, food stamps, Temporary Assistance to Needy Families, foster care, and Supplemental Security Income. Federal and other retirement and disability programs comprise approximately one third of the funds in this function. FUNCTION LEVELS AND PRIORITIESFUNCTION 600: Income Security [in billions of dollars] ------------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------ Total Spending: Budget Authority 360.4 379.9 391.1 401.4 417.0 402.9 1,992.3 Outlays 364.2 383.5 393.5 402.4 416.9 402.1 1,998.5 Discretionary: Budget Authority 49.5 52.1 52.4 53.7 55.0 56.3 269.4 Outlays 55.7 57.3 57.2 56.9 57.1 57.6 286.1 Mandatory Spending: Budget Authority 310.9 327.9 338.7 347.7 362.0 346.6 1,722.9 Outlays 308.6 326.2 336.3 345.5 359.8 344.5 1,712.3 ------------------------------------------------------------------ The budget resolution provides increased funding that could be used to meet urgent needs related to Hurricane Katrina recovery and to begin addressing long-ignored challenges facing children and families, including large backlogs in the Social Security disability system. The resolution also includes a deficit-neutral reserve fund to facilitate the reauthorization of the farm bill, providing resources for such objectives as to secure an economic safety net for agricultural producers, conserve our natural resources, and address nutrition needs. FUNCTION 650: SOCIAL SECURITY- FUNCTION SUMMARYFunction 650 consists of the two payroll tax-financed programs that are collectively known as Social Security: Old-Age and Survivors Insurance and Disability Insurance (OASDI). This function includes Social Security benefit payments and funds to administer the program. Under provisions of the Congressional Budget Act and the Budget Enforcement Act, Social Security trust funds are off-budget and do not appear in the budget resolution totals. However, a small portion of spending in Function 650--the general fund transfer of income taxes on Social Security benefits--is considered on-budget and appears in the budget resolution totals. The table and discussion below contain information pertaining to both the on-budget and off-budget components. FUNCTION LEVELS AND PRIORITIESFUNCTION 650: Social Security 1 [in billions of dollars] ------------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------ Total Spending: Budget Authority 587.8 615.0 646.0 681.4 719.4 762.0 3,423.9 Outlays 585.6 612.6 643.1 678.3 715.9 758.1 3,408.0 Discretionary: Budget Authority 4.7 4.9 5.0 5.1 5.3 5.5 25.8 Outlays 4.7 4.9 5.0 5.1 5.3 5.4 25.7 Mandatory Spending: Budget Authority 583.1 610.2 641.0 676.3 714.1 756.6 3,398.1 Outlays 580.8 607.7 638.1 673.2 710.6 752.7 3,382.3 ------------------------------------------------------------------ The resolution rejects the President's private account proposal for Social Security. The administrative budget for the Social Security Administration (SSA) includes resources in Function 570 (Medicare) and Function 600 (Income Security) as well as Function 650. The resolution assumes a $9.9 billion discretionary funding level for SSA. The additional resources will prevent increases in the backlogs of disability decisions and hearings that would occur under the President's budget. The resolution will enable SSA to address the significant number of individuals waiting for disability and hearing decisions. The budget also accommodates an additional $213 million through a discretionary cap adjustment for program integrity initiatives. The cap adjustment allows the agency to conduct an increasing number of Continuing Disability Reviews (CDRs) and Supplemental Security Income redeterminations. FUNCTION 700: VETERANS BENEFITS AND SERVICES- FUNCTION SUMMARYFunction 700 covers the programs of the Department of Veterans Affairs (VA), including veterans' medical care, compensation and pensions, education and rehabilitation benefits, and housing programs. It also includes the Department of Labor's Veterans' Employment and Training Service, the United States Court of Appeals for Veterans Claims, and the American Battle Monuments Commission. Almost 90 percent of appropriated funding in Function 700 goes to veterans' health care. FUNCTION LEVELS AND PRIORITIESFUNCTION 700: Veterans Benefits and Services [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 73.9 85.2 87.8 90.4 96.0 93.3 452.8 Outlays 72.3 82.8 87.7 89.7 95.4 92.6 448.2 Discretionary: Budget Authority 36.5 43.1 44.3 45.6 47.0 48.3 228.2 Outlays 35.0 40.7 44.3 45.0 46.3 47.8 224.1 Mandatory Spending: Budget Authority 37.4 42.1 43.5 44.8 49.1 45.0 224.5 Outlays 37.3 42.1 43.4 44.7 49.1 44.8 224.1 ------------------------------------------------------------ For 2008, the resolution provides $6.6 billion of discretionary budget authority over the 2007 level, for a level that is $3.5 billion above the 2008 funding in the President's budget. The resolution reflects the high priority of adequately funding veterans programs. The resolution rejects the veterans' health care enrollment fees and co-payment increases that were imposed by the President's budget. The resolution provides full funding to support excellent health care for veterans and current service members. In particular, the resolution provides funding to begin implementing future recommendations of the President's Commission on Care for America's Returning Wounded Warriors (the bi-partisan `Walter Reed Commission') and other United States Government investigations into military and veterans' health care facilities and services. The resolution provides additional funding in Function 700 above the President's requested levels for 2008 to address important priorities including veterans' mental health, post-traumatic stress disorder, traumatic brain injury, and spinal cord injury. The resolution also has additional funding for disability compensation claims processing so that VA can significantly reduce the inventory of pending claims. FUNCTION 750: ADMINISTRATION OF JUSTICE- FUNCTION SUMMARYThe Administration of Justice function consists of federal law enforcement programs, litigation and judicial activities, correctional operations, and state and local justice assistance. Agencies within this function include: the Federal Bureau of Investigation; the Drug Enforcement Administration; Border and Transportation Security; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the United States Attorneys; legal divisions within the Department of Justice; the Legal Services Corporation; the federal Judiciary; and the Federal Bureau of Prisons. This function includes several components of the Department of Homeland Security. FUNCTION LEVELS AND PRIORITIESFUNCTION 750: Administration of Justice [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 45.5 46.9 46.1 47.2 48.4 49.6 238.2 Outlays 44.7 46.2 47.3 47.5 48.2 49.2 238.3 Discretionary: Budget Authority 44.3 44.7 45.4 46.6 47.9 49.3 234.0 Outlays 43.4 45.0 46.2 46.7 47.8 49.0 234.7 Mandatory Spending: Budget Authority 1.3 2.3 0.7 0.6 0.4 0.3 4.3 Outlays 1.3 1.1 1.1 0.8 0.4 0.2 3.7 ------------------------------------------------------------ For Function 750, the budget resolution rejects the cuts to local law enforcement and first responders in the President's budget, including cuts to the Edward Byrne Memorial Justice Assistance Grant program. The resolution provides funding above the President's budget level for 2008 for that purpose and for purposes such as protecting the borders and funding the 9/11 Commission recommendations. FUNCTION 800: GENERAL GOVERNMENT- FUNCTION SUMMARYThis function includes the activities of the White House and the Executive Office of the President, the legislative branch, and programs designed to carry out the legislative and administrative responsibilities of the federal government, including personnel management, fiscal operations, and property control. FUNCTION LEVELS AND PRIORITIESFUNCTION 800: General Government [in billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 18.2 18.6 19.3 19.9 20.6 21.4 99.8 Outlays 18.6 19.0 19.3 19.8 20.4 21.2 99.7 Discretionary: Budget Authority 16.1 16.8 17.3 17.9 18.5 19.0 89.5 Outlays 16.5 17.0 17.5 17.8 18.2 18.7 89.2 Mandatory Spending: Budget Authority 2.1 1.8 1.9 2.0 2.2 2.3 10.3 Outlays 2.1 2.0 1.9 1.9 2.2 2.5 10.5 ------------------------------------------------------------ The budget resolution includes a program integrity initiative to increase Internal Revenue Service tax compliance efforts to collect unpaid taxes from those who are not paying what they owe. The funding in this function is adequate to provide for the reestablishment of the Office of Technology Assessment. FUNCTION 900: NET INTEREST- FUNCTION SUMMARYFunction 900 consists primarily of the interest paid by the federal government to private and foreign government holders of U.S. Treasury securities. This amount is slightly offset by interest income received by the federal government on loans and cash balances and by earnings of the National Railroad Retirement Investment Trust. FUNCTION LEVELS AND PRIORITIESFUNCTION 900: Net Interest 1 [in billions of dollars] ------------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------ Total Spending: Budget Authority 236.6 254.6 264.9 277.8 283.8 282.2 1,363.3 Outlays 236.6 254.6 264.9 277.8 283.8 282.2 1,363.3 Discretionary: Budget Authority 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Outlays 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Mandatory Spending: Budget Authority 236.6 254.6 264.9 277.8 283.8 282.2 1,363.3 Outlays 236.6 254.6 264.9 277.8 283.8 282.2 1,363.3 ------------------------------------------------------------------ In recent years, the Federal government's net interest payments on its debt have grown dramatically. Between 2003 and 2006, net interest increased by 48.1 percent, rising from $153.1 billion in 2003 to $226.7 billion in 2006. In 2006, net interest comprised one of the largest components of the federal budget, exceeding spending on education, veterans' affairs, and homeland security combined. FUNCTION 920: ALLOWANCES- FUNCTION SUMMARYThis function displays the budgetary effect of proposals that cannot easily be distributed across other budget functions. In the past, this function has included funding for emergencies or proposals contingent on certain events. FUNCTION LEVELS AND PRIORITIESFUNCTION 920: ALLOWANCES [In billions of dollars] ------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------ Total Spending: Budget Authority 0.8 0.0 0.0 0.0 0.0 0.0 0.0 Outlays 0.8 0.0 0.0 0.0 0.0 0.0 0.0 Discretionary: Budget Authority 0.8 0.0 0.0 0.0 0.0 0.0 0.0 Outlays 0.8 0.0 0.0 0.0 0.0 0.0 0.0 Mandatory Spending: Budget Authority 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Outlays 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ------------------------------------------------------------ FUNCTION 950: UNDISTRIBUTED OFFSETTING RECEIPTS- FUNCTION SUMMARYThis function comprises major offsetting receipt items that would distort the funding levels of other functional categories if they were distributed to them. FUNCTION LEVELS AND PRIORITIESFUNCTION 950: Undistributed Offsetting Receipts 1 [in billions of dollars] ------------------------------------------------------------------ 2007 2008 2009 2010 2011 2012 2008-2012 ------------------------------------------------------------------ Total Spending: Budget Authority -82.0 -83.9 -80.2 -81.5 -85.0 -88.3 -419.0 Outlays -82.0 -83.9 -80.3 -81.5 -85.1 -88.3 -419.0 Discretionary: Budget Authority 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Outlays 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Mandatory Spending: Budget Authority -82.0 -83.9 -80.2 -81.5 -85.0 -88.3 -419.0 Outlays -82.0 -83.9 -80.3 -81.5 -85.1 -88.3 -419.0 ------------------------------------------------------------------ The negative spending in Function 950 represents CBO's baseline estimate of undistributed offsetting receipts. FUNCTION 970: OVERSEAS DEPLOYMENTS AND OTHER ACTIVITIES- FUNCTION DESCRIPTIONThis function includes funding for overseas deployments and other activities. FUNCTION SUMMARYFUNCTION 970: Overseas Deployments and Other Activities [in billions of dollars] --------------------------------------------------------------- 2007 2008 2009 2010 2011 2012 2008-2012 --------------------------------------------------------------- Total Spending: Budget Authority 124.3 145.2 50.0 0.0 0.0 0.0 195.2 Outlays 31.5 114.9 109.4 42.3 13.6 4.5 284.7 Discretionary: Budget Authority 124.3 145.2 50.0 0.0 0.0 0.0 195.2 Outlays 31.5 114.9 109.4 42.3 13.6 4.5 284.7 Mandatory Spending: Budget Authority 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Outlays 0.0 0.0 0.0 0.0 0.0 0.0 0.0 --------------------------------------------------------------- The resolution includes the House-passed supplemental for 2007 (H.R. 1591) and, as a placeholder, accommodates up to the President's funding levels for overseas deployments and related activities in 2008 and 2009.
## All Rights Reserved. © 2007 TheWeekInCongress.com.(TM) No reproduction, language translation or distribution without written permission from TheWeekInCongress.com.(TM)
|
|
||||||||||||||
