From the Hill:

"No American troop will go without … just so the most liberal activists in the country can be quieted," said a senior House Democratic aide. "If it means Democrats in Congress get tea bags and hate mail, so be it — we will not be irresponsible with the lives of our troops."

I have to call a spade a spade here- that reasoning is a total cop-out and disingenous. This CRS report- distributed to every single congressional office, and presumably read by the ever-so-responsible aide who's quoted here, shows that further delays would not have put soldiers in danger. CRS found that the Army had many options to stretch their funding well into the summer, including invoking the Feed and Forage act, which has been used in the past to finance operations while Congress worked on supplemental appropriations bills.

I've pasted below the fold the section of the report that's most important, and added some bolding.

As regards the war funding bill, Democrats are fatigued. So here's a word of non-partisan strategic advice- take a breather. Relax. Just do nothing for while and see if events on the ground change the politics back home.

Anyway, it now seems that Democrats just don't want this fight. From CQ:

"The problem is that we have to provide money for the troops, and if we don't, the Democrats will be blamed," added Rep. James P. Moran, D-Va., a war opponent. "Bush has the bully pulpit, so he will define who is responsible."

Incorrect- there's plenty of funding for soldiers. The authority granted by the Feed and Forage Act is only one of a good number of options the Defense Department has to maintain troops in the field absent a re-up in appropriations. The most important one seems to be using its authority to transfer funds between accounts- in other words, taking money from one part of the budget and putting it in another. CRS has found that using the transfer authority alone could provide enough funding to keep the military supplied through most of July.

If the transfer authority is used in combination with the Feed and Forage authority, DOD would probably have enough funding to last until August, though i haven't done the math. How long it would last depends on how Defense interprets the Feed and Forage Act- and I'm not quite sure how they would. But even the narrowest interpretation would give DoD a massive infusion of funding.

Maybe Moran's right about how Bush would respond, and how hard it would be to rebut him. I don't know. It just seems that confrontation is inevitable, but maybe this is the wrong time. Who knows. But it won't be Congress's fault if the war effort isn't funded, as the President has alternative means, and somebody will probably have to make that case if Congress is to shape war policy within this President's term.

A pared-down version of the war funding supplemental is currently scheduled to hit the House floor on Thursday, May 24, with Senate action expected later that day or early the next. The bill appears likely to include the federal minimum wage increase and and extension of about $4.8 billion in small-business tax cuts. Whether domestic emergency appropiations will remain is yet to be determined.

But timetables, benchmarks and other restrictions or conditions on war funding or soldiers' redeployment will probably be left out. Congress' battle with the White House over withdrawal of soldiers will apparently live to be fought another day -- possibly when the House and Senate's respective defense authorization bills are taken up.

Why this turn of events? Possible explanation offered by a Democratic aide: "I think Mr. Obey is fatigued by the process."

OMB Watch has just put out a report on a little-known law -the Feed and Forage Act- that seems to give the President broad powers to fund war efforts- even without an enacted appropriations bill.

So even if the negotiations over the war funding supplemental drag on, the President could meet the needs of the soldiers in Iraq and Afghanistan.

Read the whole thing if you have the chance.

The day after Congress adopted a budget resolution for FY08, the Republican Study Committee sent a letter to the president pledging support for a presidential veto of fiscal 2008 appropriations bills. The letter says that the resolution "greatly exceeds" (by $23 billion out of $956 billion) Bush's budget request for discretionary funding. OMB Director Rob Portman has said twice in two weeks that he would recommend the president veto any appropriations bills that exceed Bush's request.

According to the RSC:

Republican Study Committee Chairman Jeb Hensarling, R-Texas, said he already has at least 60 signatures on a letter that will be released if and when it gets enough signatures to show that more than one-third of the House would vote to sustain vetoes

By this count, Rep. Hensarling, with a putative 60 (he's not from the show-me state, I guess) is already 85 votes short of the 145 that are constitutionally required to sustain a presidential veto.

As expected, Congress adopted a budget resolution for FY 2008 this afternoon. The House voted 214-209, with 13 Democrats crossing sides to oppose it. The Senate margin was larger, 52-40; Maine Sens. Collins (R) and Snowe (R) were the only GOP defectors. Seven Republicans and one Democrats did not vote.

This is a significant development. Not only has the 110th Congress come up with a budget where last year's GOP-controlled Congress could not, despite working with a Republican president. It also demonstrates that the Democrats can operate with sufficient discipline to govern, in spite of whisker-thin margins. In practical terms, it means that the frame of reference or working blueprint for the government's spending will be a Congressional product, not a presidential one.

The congressional budget resolution that appears likely to be approved by the House and Senate today sets up some clear struggles between Congress and the administration. Three of the most salient such struggles ahead, from least to most significant, will be:

• Paying for Tax Cuts: The budget resolution projects a federal budget surplus of $41 billion in 2012, arrived at by assuming the expiration of Bush's "investment" tax cuts on capital gains and dividends and income taxes that benefit the wealthy. Unless the administration challenges these assumptions, the pre-2001 rates will be restored, bringing in tens of billions in new revenue, annually. But whichever tax cuts aren't extended will need to be paid for. This is where the "Largest Tax Hike in History" chorus chimes in, with the "All Tax Cuts Paid For" trying to drown it out.
• Social Funding Exceeding Bush's Caps: The resolution calls for aggregate discretionary spending of $23 billion above the president's request (including $2 billion in advance appropriations). OMB Director Portman has threatened to shot down appropriations funding for education, and health care for children and veterans. The administration is betting on congressional GOP members sticking by them in vetoing new funding for highly popular social programs.
• Whose Budget Is This, Anyway?: The struggle over the authorship of the budget and, to some degree, over the direction of domestic policy, is inherent in the outcome of these two conflicts, and others. As difficult as the administration may make it for Congress to implement its resolution, the resolution, i.e., Congress' budget, stands a fair chance to become the blueprint for the nation's budget policy, rather than the budget proposal the president submitted to Congress back in February.

No sooner than a congressional budget resolution emerges from conference committee, do we get another obligatory statement from OMB Dirctor Rob Portman threatening to "veto appropriations bills that exceed our request for discretionary spending" and because the budget resolution "rel[ies] on tax increases."

Portman's paranoia has him seeing tax increases where none exist; it's his own rite of passage in the Administration, at the expense of his hard-earned reputation after many years in Washington as an honest broker.

The budget resolution calls for revenue neutral budgets over the next five years -- any tax cuts are paid for by revenue surpluses -- not tax increases -- and the resolution make no calls for tax increases at all.

Furthermore, the administration is backing itself into a mechanical and politically awkward strategy where, to retain any credibility, it must veto every "excessive" spending bill it gets. As Stan Collender points out in his column ($) this week:

... the White House could have evaluated the support for each appropriation bill individually and vetoed only those it was certain of winning. The Portman letter makes that strategy impossible. It also puts congressional Republicans in a very difficult position by forcing them to choose between supporting the White House and hurting themselves back home. It's hard to see how those Republicans will side with the White House under these circumstances and, therefore, how the administration's latest budget strategy can succeed.

Any wager on whether Portman will issue yet another veto threat when Congress approves the budget resolution conference report later this week?

For overviews of the budget resolution compromise package announced late this morning by the House and Senate Budget Committees, see:

• Overview of the FY 2008 Budget Conference Agreement
• Conrad-Spratt Press Release on Budget Conference Agreement

As the press release indicates, "[t]he full Senate and House are each expected to pass the fiscal year 2008 budget resolution this week."

Some of the key provisions in the agreement that had been amoung the most heavily negotiated include:

• Discretionary Spending Caps: The agreement provides $954 billion for discretionary programs in fiscal 2008, $21 billion over the president's request, with significant increases in funding for children's health, education, and veterans' health care.
• PAYGO Rules/"Trigger": Under the agreement, revenue legislation is subject to House and Senate Pay-As-You-Go rules, and a House-only "trigger" mechanism to ensure fiscal responsibility. The House "trigger" mechanism limits tax cuts to 80 percent of the projected surplus in 2012, if OMB's July 2010 estimates confirm such a projection.
• Tax Provisions: The agreement endorses middle-class tax relief, including extending marriage penalty relief, the child tax credit, and the 10 percent bracket subject to the PAYGO rule; it also provides a one-year AMT patch.
• Long-Term Debt Reduction: The agreement also creates a Senate point of order against legislation that increases the deficit in the four decades beyond the next ten years (2018-2027, 2028-2037, 2038-2047, and 2048-2057) by over $5 billion during those decades.

In a key development in budget resolution negotiations, House and Senate conferees this morning reached a compromise on the FY 2008 budget resolution. The resolution sets a non-war discretionary spending cap of $954 billion for the fiscal year's twelve appropriations bills.

More to follow as additional details on the compromise become available.

Yesterday, House and Senate budget resolution negotiators took a step forward to agreement, but seem unlikely to meet a key but informal deadline.

The Senate, through the Baucus admendment, approved advance spending on a projected 2012 surplus to offset the cost of extending some tax cuts in 2011 and 2012 as part of that chamber's budget resolution. House Budget Committee chair John Spratt (D-SC) has balked at spending a surplus that has not yet materialized. But, according to a House Democratic aide, the compromise struck would require a spending "trigger" binding only the House and allowing for the use of up to 80 percent of a 2012 projected surplus, if and when the estimate in the OMB July 2010 report shows a 2012 surplus .

Today is the day when appropriators can begin sending spending bills to the floor, but without a budget resolution in place (as seems certain at this point) spending bills may run afoul of the spending caps contained in an eventual resolution.

ADDENDUM: The salience of the budget resolution timing issue vis-a-vis consideration of appropriations legislation on the floor was reduced significantly today, with word today on the Hill that the House is unlikely to turn to FY 08 spending bills until after the Memorial Day recess.

Check out Dana's latest in his TPM Cafe series on the budget process. This edition: the last few sticking points regarding the congressional budget resolution.

It was over six weeks ago when the House and Senate passed their $2.9 trillion budget resolutions for the federal fiscal year starting on October 1, 2008 and projected budgets through 2012. Since then, the attention of most members of Congress has been on the war in Iraq and whether or how to end it.

But a small group of budgeteers like House Budget Committee chair John Spratt (D-SC), his Senate counterpart Kent Conrad (D-ND) and other Democratic congressional leaders have been wrestling with the differences between the House and Senate resolutions, trying to arrive at compromises that the budget resolution conference committee can ratify. The conference committee finally convened yesterday, but there was no resolution, so to speak, of the main sticking points between the House and Senate.

Here's a new resource on the basics of the budget process.

We try to make the budget process understandable by comparing it to a story- with a beginning, middle and end, as well as characters, conflict, and resolution.

If you already get the budget process, please show it to a friend, or distribute it to people who don't get it.

Educating people on the process could encourage them to get involved in budget politics. And it might cut down on all the phony baloney that budget analysts have to deal with. An educated public wouldn't let politicians get away with budget smoke and mirrors, you'd think.

The day after the House-Senate budget resolution conferees met last week to take up their delicate deliberations, the bull from the Bush china shop came barreling into the room -- thankfully, long after negotiators had left. But the portly bull, less than deft, issued threats that fell on deaf ears, bloviating to long-vacated room:

... it is timely to notify you that I will recommend the President veto any appropriations bill that exceeds his request until Congress demonstrates a sustainable path that keeps discretionary spending within the President's topline of $933 billion.

I suppose it is a timely sentiment. After six years of profligacy and tax cuts combining to heap a fresh $3 trillion onto the nation's debt, increasing it by about 60 percent during that time, it is high time that Bush & Co. got with the program.

But how much credibility does the president have on the Hill with this issue? Here's what House Appropriations Committee chair David Obey (D-WI) told the Post:

This is the same guy who's squirted away almost $600 billion on a stupid war and this is a guy who's riding at 28 percent in public opinion polls.

A common misconception about the Baucus amendment to the budget resolution, which calls for making permanent a handful of the Bush tax cuts, is that it's progressive, that it's a "middle class" tax cut. Indeed, many of the tax cuts it calls for are progressive, including the child tax credit. And it calls for an expansion the State Children's Health Insurance Program (SCHIP), which could be a big boost for low to modest income-earning families.

But some particularly large tax cuts here are very regressive. The amendment calls for making permanent the marriage penalty tax cut, which has been doing away with the marriage penalty for everyone except low income people (See this CBPP brief for more). The Tax Policy Center calculated that 72 percent of the benefits of the marriage penalty break now go to families in the highest 20 percent of the income distribution.

Further, the child tax credit isn't even available for people who make a very low income. And the estate tax measure is regressive, even if it is a better deal than was hoped for prior to the November '06 election.

I don't think anyone's done the math to find if the Baucus amendment, since it's so vague, calls for reducing tax rates more for richer people or for everyone else. But it isn't just a "middle class" tax cut, and there's no reason why almost the entire Senate should have supported it.

Caveat: This is very inside-baseball stuff, since motions-to-instruct are non-binding and purely advisory, and the practical consequences of budget resolutions themselves are mostly in terms of the overall discretionary spending caps they impose for the fiscal year ahead.

Late yesterday, the Senate held the three roll-call votes listed below on motions to instruct budget resolution conferees. The Senate also approved, by voice vote, a motion by Sen. Debbie Stabenow (D-MI), establishing a reserve fund for renewable fuels and other energy legislation.

• Gregg Motion: to instruct conferees to assume middle-class as well as capital gains and dividends tax cut extensions and a full repeal of the estate tax. Defeated, 44-51
• Conrad Motion: to instruct conferees to require that the $180 billion in tax cuts and spending provided in the Baucus amendment be paid for by surplus on-budget revenues as well as revnues raised by "tax gap" enforcement. Adopted, 51-44.
• Kyl Motion: to instruct conferees to lower top marginal esatet tax rate of no higher than 35%, a lower rate for smaller estates, a meaningful exemption that shields smaller estates from having to file the estate tax returns and to permanently extend other family tax relief. Adopted, 54-41.

The Senate reached a consent agreement today on motions to instruct conferees to the budget resolution. House-Senate negotiators on the FY 2008 budget resolution have begun debating and voting on motions, and the Senate has completed the procedural steps needed to appoint its conferees on the measure.

The Senate will ultimately debate at least four Republican motions to instruct budget blueprint (S Con Res 21) conferees, facilitating the extension of various Bush '01/'03 tax cuts, possibly one from Democrat Debbie Stabenow (D-MI) on energy and another from Budget Committee chief Kent Conrad (D-ND) on a legislative "trigger" tied to the projected budget surplus actually materializing before it can be used as an offset for extensions of some expiring tax cuts.

The timing for the ultimate vote on passage of S Con Res 21 remains unchanged -- informally a May 15 target date for passage exists because, on that date, appropriations bills can be brought to the House floor whether a budget is in place or not; in place is preferred since a passed resolution helps set caps and spending bills. "I think we'll get it done next week," Conrad said.

We've outlined the major substantive stick points facing the conference committee here.

By a vote of 217-212 this afternoon, the House moved one step closer toward getting S Con Res 21, its version of the budget resolution, to a conference with the Senate. The following House members were appointed to the conference committee:

• John M. Spratt Jr. (D-SC)
• Rosa DeLauro (D-CT)
• Chet Edwards (D-TX)
• Paul D. Ryan (R-WI)
• J. Gresham Barrett, R-S.C.

The expectation is that the Senate will follow suit perhaps as early as tomorrow, with conference committee meetings later this week and a report around May 15. "The important thing is to get it done next week," Senate Budget Committee chair Kent Conrad (N-ND) told reporters. "May 15 is what appropriators said they need."

• The Baucus Amendment: A Senate provision calling for using a $132 billion surplus projected for fiscal 2012 to pay for extending popular tax cuts over 2010-12, such as those benefitting married couples and the child tax credit, while fixing the estate tax at 2009-law levels.
  • House: the main issue is how to draft a "trigger" mechanism in the resolution that allows extensions of tax cuts expiring in 2010 to go forward only if surpluses actually materialize -- otherwise, they would have to be offset under PAYGO rules.
  • Senate: indicated a preference to waive the offset requirements for certain tax breaks affecting the middle class and family farms, given that the Baucus amendment passed on a 97-1 vote, far in excess of the 60 votes required to waive PAYGO.
• Reconciliation Instructions: The House version seeks procedural protections for legislation to expand direct government aid to college students by cutting private lender subsidies. Conrad opposes instructions to the Education committees; he is on record saying that reconciliation is meant to be reserved for deficit reduction, and the House version sets aside a paultry $75 million in savings as it is.
• Discretionary Spending Caps: The House and Senate are roughly $7 billion apart, with the Senate proposing a $948.8 cap on overall discretionary spending and the House proposing $955 billion. Word is that the compromise figure will tilt toward the House number. The President proposed $930 billion, but with priorities more skewed toward military spending. He has repeated past years' threats to veto a budget that exceeds his spending caps.

The House action today and May 15 deadline suggest that the Congressional Democratic leadership is close solutions on the above points, with important implications not just for FY 2008, but for the full five years the budget resolution covers and beyond.

This today from CTJ:

Congress Considers Taking Money from Social Security to Extend Tax Breaks

... Democratic leaders in both the House and Senate initially proposed budget plans that would supposedly produce a budget surplus by 2012. The Senate plan was amended before it was passed, at the urging of Max Baucus (D-MT), to spend that alleged surplus on tax breaks [and SCHIP. The House passed their plan] without any such amendment. Few have noted that the surplus they're talking about doesn't really exist. [But see our pieces here and here, referring to 'projections'] The 'surplus' money that would be spent on tax cuts and so forth would really be taken from funds that are supposed to be used to shore up Social Security.

No one mentioned raiding the Social Security surplus when the Baucus amendment was debated and adopted, to our recollection. CTJ claims "[t]he Senate budget plan, as initially proposed, would produce a surplus of $132 billion in 2012 — but that includes the Social Security surplus. So clearly the federal government is relying on the Social Security surplus to stay in the black." How do we know this? The $132 billion projected surplus is an on-budget figure, and the full measure of spending under Baucus is closer to $180 billion. Isn't deficit financing via borrowing what Congress is considering here? There has been far more hand-wringing about the PAYGO than the Social Security implications of the Baucus amendment, if indeed any of the latter. CTJ merely assumes on a raid on Social Security:

Of course the House and Senate budget plans are far more responsible than the President's since at least they revive the "pay-as-you-go" rule, or PAYGO, which helped us balance the budget in the 1990s. But the Baucus amendment, if adopted in the final budget, will be a pledge to waive PAYGO to spend the projected 'surplus' that's supposedly coming in 2012.

Even if the Baucus Amendment is "a pledge to waive PAYGO," what evidence is there that it contemplates a raid on Social Security, an alarm unheard in these quarters?

Yes, the money spent would permit the extension of tax cuts ... but only for the middle class. As Charlie Rangel might say, "Got a problem with that?"

Actually, Charlie isn't focusing that much on disposition of the '01/'03 Bush tax cuts expiring on 2010:

I'm 76 years old. I don't buy green bananas," he said. "Who knows what's going to happen in 2010? It just doesn't make sense, with all the problems we are facing, to be discussing the extension of tax cuts that don't expire till 2010."

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Word on the Hill is that House and Senate negotiators are close enough to a final agreement on a joint budget resolution for confereees to be appointed and to meet next week, and for appropriations bills to start moving on the House floor the week of May 14.

House budget resolution conferees are expected to be appointed next Monday, May 7. According to Senate Budget Chairman Kent Conrad (D-ND), the Senate will do likewise on May 9.

Confereees will confront differences between the House- and Senate-passed resolutions in March, most notably, those arising from an amendment by Finance Committee Chair Max Baucus (D-MT) that recommended using a projected $132 billion fiscal 2012 surplus $195 billion and another $60 billion over and above the projected surplus — to extend Bush's 2001 and 2003 middle-class tax cuts and expand SCHIP by $50 billion.

House Budget Chairman John M. Spratt Jr. (D-SC) and members of the Blue Dog coalition oppose the Baucus amendment because it would, they say, violate the House's pay-as-you-go rule. Conferees will also need to resolve the $6 billion gap on an overall discretionary spending cap, among other issues.

Congress' focus on the emergency war spending supplemental has come at the cost of momentum on the FY 2008 budget resolution. House Appropriations subcommittee chairs hope to meet the goal set by the Democratic leadership of having all 12 annual appropriations bills adopted by the July 4 recess, leaving the Senate and conference committees adequate time to complete the bills by Oct. 1, the start of FY 2008.

So, while they wait for a vote on the conference committee budget resolution, the Appropriations chairs are starting in on their spending bills. This creates a problem.

The budget resolution sets the overall discretionary funding cap that the Appropriations committees divide among their bills. Regarding the appropriations bills to come, House Democratic leaders are already preparing for their arrival on the floor as soon as the week of May 14, without the framework of a bicameral compromise budget.

House Majority Leader Steny Hoyer (D-MD) said last week that the House might have to "deem" a top-line spending cap rather than wait for passage of a budget conference report. But time is short: to avert an awkward and confusing budget-making sequence, Congress would need to adopt the budget conference report within the next week.

Posted by Dana Chasin, 11:59:36 AM