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Press Release

    This Week on Capitol Hill

    04/10/2003

    With two days left until Congress adjourns for the Easter recess, a budget conference report and the supplemental appropriations bill have not been completed. Conferees on the budget have yet to agree on a tax cut figure, but it does seem like the members concur on a discretionary spending total of $784 billion, which is nearly the amount the president outlined.

    Reports have indicated that budget conferees will decide to go with two different tax cut figures in order to get a budget completed by April 15. This means that the budget conference report will stipulate total spending at $2.2 trillion, of which $784 billion will be earmarked for discretionary spending (education, defense, transportation, etc). Furthermore, the conference will report two different tax cut figures, $350 billion and $626 billion, under reconciliation instructions.

    The primary practical reason conferees decided to go with this unconventional route is to get a budget competed. That way, Congress can start appropriating tax dollars for departments and agencies for 2004. Politically, conferees needed to go with two different tax numbers because they couldn’t agree on one number. Certain senators and conservative House members are sticking to their guns, the former preferring not a dollar more than $350 billion and the latter rightly holding firm to the president’s full tax cut number, or something very close to it.

    Moreover, conferees included the $626 billion tax cut number to keep the House on board. If the budget conference report included anything significantly less than the original House budget tax cut number ($726 billion), House conservatives would have balked, thereby jeopardizing the entire budget process. Thirty conservative House members were right to have sent a letter recently to the leadership stipulating this fact.

    If the conference came back with the Senate’s $350 billion number, it would have been too small of an economic growth package for many House members. Imagine a tax cut of $350 billion that doesn’t grow the economy or create jobs. That puts Republicans in a serious mess. Because a $350 billion tax cut may be too small to make a significant difference, Republicans would be blamed. Furthermore, the Republican mantra of cutting taxes to spur the economy – especially in a time of war – could possibly be jeopardized. Democrats would immediately pounce on this and advocate for more government spending to drive the economy.

    If a budget conference report with the divergent tax cut numbers is approved, each chamber’s tax writing committees would then mark up separate tax cut legislation that totals $350 billion (Senate) and $626 billion (House). Then both chambers would hopefully pass their respective tax cuts, which would then go to conference. At that point, tax cut conferees would reconcile the difference, and hopefully come up with a number close to the House and the president’s version. Once that is completed the tax conference report would go back to each chamber for approval. Since, both chambers agreed on a budget, the tax conference report would only need a simple majority in the Senate to pass. That makes things easier legislatively. This is the scenario that today’s budget conference report conferees seek to implement.

    While Congress debates the budget, it still has to finalize a supplemental appropriation bill for the war. House and Senate leaders need to reconcile their divergent allocations to pay for the war, reconstruction, and other foreign affairs issues. However, what once seemed like a sure thing could be stalled by extraneous provisions and spending by Senate members.

    House leaders are calling on their Senate counterparts for a clean supplemental appropriation devoid of spending or other measures not related to the war, such as catfish farmers’ eligibility to receive disaster relief aid, issues involving organic food labeling, a $98 million appropriation by Sen. Tom Harkin (D-Iowa) for agricultural research labs in Iowa, and a controversial provision that would exclude some air carriers from delivering supplies to troops in Iraq. Though these issues will not be deal busters, it does prove that Congress will look for any vehicle to move their special interest projects and programs.

    Finally, this week, Citizens Against Government Waste (CAGW) released its yearly Congressional Pig Book, a compendium of government waste and pork-barrel projects. CAGW found that “Total pork hidden in the 13 appropriations bills, 11 of which were lumped together into one omnibus spending bill and passed in February, is a record $22.5 billion, 12 percent higher than last year’s eye-popping total of $20.1 billion. Projects are also up 12 percent over last year, from 8,341 to 9,362. That total is an increase of 337 percent over five years.”

    Though pork barrel spending is no surprise to anyone in Washington, the billions wasted should give more impetus for completing a budget for this year. The billions tucked into the 2003 omnibus bill are the direct result of Senate Democrats not being able to complete a budget last year. Without a budget it’s difficult to appropriate funds for agencies, and most of the appropriations remain outstanding until the very last minute. Lawmakers will then choose to wrap all the spending requests into one omnibus that doesn’t get scrutinized because of time limitations. This year for instance, lawmakers had a day to comb through the 3,000 page 2003 omnibus bill. That’s why the budget process is so important.