A Busy New Year for Congress

The list of to-dos for Congress when it convenes on January 7 grows longer by the day. For instance, the Senate will need to confirm President Bush’s new appointees to head the Treasury Department and Securities and Exchange Commission, both chambers still need to pass fiscal year 2003 appropriations bills, an economic stimulus bill is gathering steam, and other items like energy legislation, prescription drugs, a possible war with Iraq, fundamental tax, Social Security, and civil justice reform all loom in the background. I think it’s best if this week’s piece focuses on appropriations and the economic stimulus bill.

Senate Majority leader Trent Lott has optimistically predicted that Congress can complete the remaining 11 appropriation bills before the President’s State of the Union Address on January 27. That’s truly a Herculean task. The amount of debate, wrangling, deal-making, and mudslinging during the forthcoming appropriations process leads me to believe that it may take a bit long than Senator Lott’s prognostication.

The stark reality is that the Senate and House budget numbers differ by the billions of dollars, and there has got to be agreement on those numbers before passage. The House of Representatives this year passed a budget resolution limiting appropriations for discretionary spending on domestic programs to $749 billion, and the President has called for spending up to $750 billion. Yet, the Senate is a full $9 billion over the House and President’s budgets, leaving Senate Appropriations Chairman Ted Stevens with a good amount of carving to do, which he has grudgingly agreed to carry out.

More likely than not, Majority Leader Lott will have his wish, but it’ll be granted as an omnibus spending bill, which will include all the appropriations – with their earmarks – in one package. This could be disastrous for taxpayers and those looking to control frivolous spending, and it may result in a veto if it’s more than what the President has outlined.

After the appropriations process, Congress will craft an economic stimulus bill to get this economy humming and people back to work. President Bush will lay out his preferences and Congress will have a template to use. However, it’s been reported that the stimulus bill may be delayed a few weeks as Treasury appointee John Snow, a former CSE board member, acclimates himself to his new position and gets his bearings down on Capital Hill.

So what’ll be in the bill? The options are abundant: make permanent and accelerate the 2001 tax cut; cut the double taxation of dividends; increase the child tax credit; cut the capital gains tax; institute a payroll tax holiday; allow businesses to write off more of their costs; allow investors to sock away more in retirement accounts, and the list goes on. The bill is going to focus on giving American workers and businesses more resources and creating incentives to invest in the economy.

It’s still pretty vague as to which options the administration will go with and what Congress will decide to push, though it’s certain that a bill is forthcoming and that’s good sign.

On a similar note, the Democrats just completed a brainstorming session where they invited economists to give an overview of the economy and answer questions so that they can come up with a plan of their own. Currently, Democrats don’t have a clue as to how to give this economy a boost. The can criticize and critique, but when it comes down to it, they don’t have anything to offer on its merits. Case in point: After one of the brainstorming sessions, Minority Leader Nancy Pelosi stated that Democrats wanted to listen to views before coming up with a game plan. Worse, she said that Democrats “won’t have an answer today or tomorrow,” as to having options to fuel the economy. Great.

The new-year will bring in some interesting developments and news no doubt. Doubtless though is a pork free appropriations process and an economic stimulus bill that Democrats can live with. Therefore, it’s important that you contact your legislators and remind them that spending needs to be controlled and that an economic stimulus bill should be passed with or without the help of those sitting on the sidelines looking for an answer to the economy.