House Budget Clears FY 2010 Budget Resolution That Includes Reconciliation

March 25, 2009 07:00 PM

via a special arrangement with Informa Economics, Inc.

Senate Budget panel to act on its version today, floor action next week

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Late Wednesday night, the House Budget Committee passed the $3.6 trillion FY10 budget resolution on a 24-15 party-line vote, sending it to the floor next week. The Senate Budget Committee will likely approve its budget resolution measure today.

Importantly, the House measure includes reconciliation instructions to allow legislation implementing Obama’s health and education policies to move later in the year without the threat of a Senate filibuster. The House measure also instructs the House Energy and Commerce and the Ways and Means committees to find $1 billion each in deficit savings by the end of September.

Whether to include reconciliation provisions in the final budget resolution will be the biggest issue for House and Senate negotiators when they work on a conference agreement next month. Neither Senate Budget Chairman Kent Conrad (D-N.D.) nor Senate Finance Chairman Max Baucus (D-Mont.) favors reconciliation instructions on health care, because such a move would incite partisan tensions and they believe the process should be used only for deficit reduction. “I don’t believe reconciliation was ever intended for this purpose,” Conrad said.

House Budget ranking member Paul Ryan (R-Wis.) said adding reconciliation into the budget on the House side is “violating the spirit of the Byrd rule.” The Byrd rule bars extraneous provisions from being included in a reconciliation bill. It takes 60 votes to waive the rule.

Neither the House nor the Senate proposals include any money for the Treasury Department’s Troubled Assets Relief Program, although the White House included $250 billion.

Neither measure extended President Obama’s tax breaks included in the stimulus package beyond two years or extended a tax break for businesses that lose money.

As for agriculture spending cuts, the Senate budget resolution measure does not include the Obama administration-pushed phase out over three years in direct payments for producers with gross sales over $500,000, nor does it include changes in the farm program payment cap.

However, the budget is not the end for the Obama/Vilsack proposals, White House Office of Management and Budget (OMB) Director Peter Orszag said yesterday. Orszag said the administration plans to work to advance the subsidy cuts through other legislation. He said he would continue to consult with Conrad and House Agriculture Chairman Collin Peterson (D-Minn.), who also opposed the plan. "There's lots of different ways of getting at this issue, and we will be working with not only Senator Conrad, but also Chairman Peterson and others to fashion legislation that saves money on agricultural subsidies, especially to large farms," Orszag said. "And there are lots of different ways of doing that."

The Senate budget resolution includes a total of around $2.5 billion in non-mandatory savings with spending cuts for the Environmental Quality Incentives Program (EQIP), the Market Access Program (MAP), and crop insurance. It would be up to the committees that control the programs, such as Agriculture and Appropriations, to set the actual spending levels for them. Conrad did not include the Conservation Reserve Program among potential areas for savings because of uncertainties about the cost of the program.

Comments: Without specific reconciliation language calling for budget savings, the Senate's proposed budget savings in agriculture are just that -- a proposal. Most will not likely show up in a final budget bill.

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


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