H.R. 13: Conference Report to S.Con.Res. 13 - Concurrent Resolution on the Budget for Fiscal Year 2010

H.R. 13

Conference Report to S.Con.Res. 13 - Concurrent Resolution on the Budget for Fiscal Year 2010

Date
April 29, 2009 (111th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

On Tuesday, April 28, 2009, the House is scheduled to consider the Conference Report to accompany S.Con.Res. 13, the Concurrent Resolution on the Budget for Fiscal Year 2010.  The Conference Report will likely be considered under a same-day rule.  H.Con.Res 85, the House version of the Democrat budget resolution was considered on April 2, 2009, and passed by a vote of 233 - 196.  S.Con.Res. 13, the Senate Democrat budget resolution was passed on April 2, 2009, by a vote of 55 - 43.

For more information on H.Con.Res 85, please see the Legislative Digest for Wednesday, April 1, 2009.

For more information on alternative budget resolutions offered during the debate on H.Con. Res. 85, please see the Legislative Digest for Wednesday, April 2, 2009.

Bill Summary

Spending:  The Conference Report would set the federal government's budget policies over a five-year window between Fiscal Years 2010 and 2014, with a total five-year cost of $18.022 trillion.  Total spending in FY 2010 would be $3.554 trillion.  The budget assumes a deficit of $1.232 trillion in FY 2010, which is reduced to $522 billion in FY 2014.  The debt held by the public would reach $11.577 trillion in FY 2014, or 64 percent of gross domestic product (GDP), according to estimates by the Congressional Budget Office. 

 

Spending Under the Conference Report to the Budget (in billions)

 

2010

2011

2012

2013

2014

2010-2014

Outlays

3,554

3,539

3,473

3,637

3,819

18,022

Revenues

2,321

2,624

2,855

3,057

3,297

14,154

Deficit

-1,232

-915

-618

-580

-523

-3,868

Public Debt

8,778

9,683

10,345

10,930

11,499

                     N/A

Debt Subject to Limit

13,222

14,349

15,277

16,159

17,022

                     N/A

 

While the deficits projected under the Conference Report are slightly smaller than those under the President's budget, the difference is mostly due to using certain gimmicks, such as reserve funds, to hide the true size of budget deficits and its alignment with the President's spending agenda.  In addition, the Democrat budget resolution conceals some of the expected costs of the long-term budget by using a five-year budget window and failing to include projections beyond FY 2014, when both the White House and CBO predict deficits to skyrocket.

 

Comparison Between the President's and Democrat Budgets (in billions)

Democrat Budget

2010

2011

2012

2013

2014

2010-2014

Outlays

3,554

3,539

3,473

3,637

3,819

18,022

Deficit

-1,232

-915

-618

-580

-523

-3,868

President's Budget

 

 

 

 

 

 

Outlays

3,668

3,556

3,509

3,733

3,979

18,546

Deficit

-1,379

-970

-657

-672

-748

-4,428

 

Taxes:  While the Conference Report states that it is the "policy of this resolution to minimize fiscal burdens on working families and their children and grandchildren," the resolution raises taxes by assuming the expiration of numerous tax cuts and clears the path for new taxes on energy, small business, and investment.

  • AMT Patch:  The Conference Report provides for a three-year, non-offset "patch" for the Alternative Minimum Tax (AMT).  However, the budget projections rely on the AMT going back into effect after three years, and increasing the tax burden on approximately 30 million people.
  • Expiring Tax Cuts:  The Conference Report provides for an extension of certain expiring tax provisions, including the 10 percent tax bracket, the child tax credit, and the marriage penalty relief.  However, the budget would increase taxes on millions of Americans by allowing other tax cuts to expire.  Assuming a baseline with no new tax increases, an extension of all 2001 and 2003 tax provisions, and an AMT patched for 10 years, the Conference Report increases taxes by $420 billion over five years.  While Democrats contend that tax increases will only effect the "rich," many of those impacted by the tax increases would be small business owners that file as individuals.  According to the Small Business Administration, small businesses have created 60 to 80 percent of all new jobs over the past decade.
  • Reserve Funds:  As seen below, the Conference report establishes 34 "deficit neutral" accounts that would provide funding for programs if Congress passes new tax increases as an offset.  The Democratic budget ensures higher taxes by providing for policies that increase taxes and "close the ‘tax gap.'"  

Reconciliation:   The Conference Report includes reconciliation instructions requiring the House Energy and Commerce, Ways and Means, and the Education and Labor Committees to report legislation to reduce the deficit by $1 billion over five years by October 15, 2009.  The Conference Report also includes instructions for the Senate Finance and Health, Education, Labor, and Pensions Committees to similarly reduce the deficit by $1 billion over five years.  Under the reconciliation process, a budget resolution may require committees to report legislation that adjusts mandatory spending and revenue levels to reduce deficits by a set amount, as prescribed by the reconciliation instructions.  The actual policy changes are not dictated to the committees, and each has the discretion as to what policies are incorporated so long as the targets are met.  The reconciliation process provides an avenue to avoid the Senate's super-majority procedural hurdles that might otherwise thwart the Majority's policy initiatives.

  • Government Run Health Care:  The Conference Report provides an instruction for the Energy and Commerce and Ways and Means committees to implement a sweeping, government-run health care initiative proposed by President Obama.  The prime focus of the President's agenda is the establishment of a government-run health insurance plan, designed to "compete" against private health insurance.
  • Student Loans:  The Conference Report provides an instruction to implement the President's budget proposal to end federally guaranteed private-sector college loans, the Federal Family Education Loan Program (FEELP), which would result in the government effectively taking control of most student loans.
  • Cap and Tax:  While there is not a specific reconciliation instruction for the Democrat "cap-and-tax" proposal, the applicable committees do receive reconciliation instructions, and there is nothing procedurally to confine them to healthcare.  For instance, the Ways and Means and the Finance committees could include a carbon tax as a variation to the cap-and-tax program.  According to Senate Budget Committee Chairman, Kent Conrad (D-ND), "When you give a reconciliation instruction to a committee, there is nothing to hold them to use it for the purpose that you intended."  In fact, during the conference deliberations, the Majority removed an amendment by Sen. Mike Johanns (R-Neb.) that barred the use of reconciliation to pass cap and trade legislation and received bi-partisan support.  Thus, the reconciliation process could still be used to fast-track a national energy tax through the Senate.

Pay-Go:   Early reports indicated that the Conference Report might contain a provision requiring the Senate to consider statutory pay-as-you-go rules (Pay-Go), which require Congress to increase taxes when spending is increased or other revenue is decreased.  However, such a provision was excluded from the Conference Report.  In fact, the resolution includes a provision which would exempt certain provisions in the resolution (AMT patch and some expiring tax cut extensions) from House Pay-Go rules.  Thus, the resolution would essential negate House Pay-Go requirements for certain provisions.

Reserve Funds:  The Conference Report includes 34 deficit neutral "reserve funds" that would supply funding for programs if offsets are provided (i.e., tax increases).  The Conference Report includes 20 Senate reserve funds and 14 House reserve funds for the programs listed below.  Reserve funds allow the Majority to provide for new taxes and spending at a later date, without including the cost in the budget resolution.  Rather than openly adopting expensive policies in the President's budget, the Conference Report to S.Con.Res 13 conceals new policy objectives and their costs by placing them in reserve funds.

  • Senate Reserve Funds:
  1. Transform and Modernize America's Health Care System
  2. Invest in Clean Energy and Preserve the Environment
  3. Higher Education
  4. Child Nutrition and WIC.
  5. Investments in America's Infrastructure
  6. Promote Economic Stabilization and Growth
  7. America's Veterans and Wounded Servicemembers
  8. Judicial Pay and Judgeships, Postal Retiree Assistance, and Certain Pension Obligations
  9. Defense Acquisition and Federal Contracting Reform
  10. Investments in Our Nation's Counties and Schools
  11. The Food and Drug Administration
  12. A Comprehensive Investigation into the Current Financial Crisis
  13. Increased Transparency at the Federal Reserve
  14. 21st Century Community Learning Centers
  15. Provision of Critical Resources to Firefighters and Fire Departments
  16. Promote Tax Equity for States without Personal Income Taxes and Other Selected Tax Relief Policies
  17. Promote Individual Savings and Financial Security
  18. Increase FDIC and NCUA Borrowing Authority
  19. Improving the Well-Being of Children
  20. 9/11 Health Program
  • House Reserve Funds:
  1. Health Care Reform.
  2. College Access Affordability, and Completion
  3. Increasing Energy Independence
  4. America's Veteran's and Wounded Servicemembers
  5. Certain Tax Relief
  6. 9/11 Health Program
  7. Child Nutrition
  8. Structural Unemployment Insurance Reforms
  9. Child Support
  10. Affordable Housing Trust Fund
  11. Home Visiting
  12. Low-Income Home Energy Assistance Program Trigger
  13. County Payments Legislation
  14. Surface Transportation Reauthorization