Wartime Commission Would Investigate Contracting Abuses in Iraq and Afghanistan
Sens. Jim Webb (D-VA) and Claire McCaskill (D-MO) have sponsored a bill (S. 1825) that would set up a commission to investigate and reform wartime contracting. It is likely the bill will be introduced as an amendment to the Defense Reauthorization Act that is currently being debated in the Senate.

FY 2008 War Funding Could Top $200 Billion
In May, Congress passed a $99.5 billion supplemental war spending bill that expires on Sept. 30. The next supplemental bill for FY 2008 war spending is expected to total close to $200 billion. That total, however, is an estimate based on speculation in Washington and continuously changing conditions in the wars in Iraq and Afghanistan.

Congress to Vote on Compromise SCHIP Package
House and Senate negotiators have agreed to an expansion of the State Children's Health Insurance Program (SCHIP) that closely mirrors the earlier Senate version. The House is scheduled to vote on the package today, Sept. 25, with the Senate voting later in the week. President Bush has promised to veto the bill.

U.S. Reaches Debt Limit: The Case for Long-Term Analysis
The Senate will vote soon on legislation to raise the ceiling on the national debt to nearly $10 trillion. This action is imperative as the statutory limit of $8.965 trillion on the United States' level of public debt will be reached by Oct. 1, according to Treasury Secretary Henry Paulson.

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Nussle Approved as Budget Head, Faces Task of Completing FY 2008 Budget
In the Senate's first vote following the August recess, former Rep. Jim Nussle (R-IA) was confirmed as director of the Office and Management and Budget (OMB), 69-24, with all Republican senators voting in favor of Nussle and the Democrats split down the middle. Notably, Senate Majority Leader Harry Reid (D-NV), Appropriations Committee Chair Robert Byrd (D-WV), and Senate Budget Committee Chair Kent Conrad (D-ND) voted against the nominee. Nussle's approval sets up what is expected to be a bitter struggle to complete work on the FY 2008 budget during the fall.

Continuing Resolution a Virtual Certainty; Congress Continues to Work for Appropriations Passage
A plethora of veto threats and the Senate's dithering over spending legislation have combined to all but guarantee the necessity of enacting a continuing resolution before the start of the new fiscal year on Oct. 1. While Senate Majority Leader Harry Reid (D-NV) has indicated that a continuing resolution will likely fund government operations for weeks, not months, time is not their only obstacle. Although it remains unclear how long it will take the Senate to complete its appropriations work, congressional leaders will also have to formulate a strategy to overcome President Bush's veto threats to see their spending priorities ultimately enacted.

Carried Interest Issue Gets Full Hearing(s) in Congress
On Sept. 6, the carried interest tax loophole took center stage, featuring a four-panel, 20-witness marathon hearing in the House Ways and Means Committee and the third hearing this year on the topic in the Senate Finance Committee. The day before the hearings, over 300 national, state and local nonprofit organizations sent a letter to Congress urging it to close the loophole in order to bring equity to the tax code.

Census Report Shows Working Americans Falling Behind
The U.S. Census Bureau released its annual report, Income, Poverty, and Health Insurance Coverage in the United States 2006 on Aug. 28. The report, which covers the most recent Current Population Survey (CPS) data, showed slight overall improvement in income and poverty, but continued declining rates of health insurance coverage. The headline numbers — a 0.7 percent increase in median household income and a 0.3 percent decline in poverty — are undermined, however, by the underlying story that middle- and low-income working Americans are not seeing substantial gains from the current economy.

Americans Dislike Rising Inequality, Contrary to Popular Belief
It is commonly assumed that Americans do not oppose increasing inequality. However, this belief may be a misinterpretation of American values and policy preferences.

The Year in Fiscal Policy...So Far
Has Congress made good on its many promises regarding fiscal policy this session?

Carried Interest Issue Gathering Momentum in Congress
Congress's tax-writing committees have focused increasing attention this summer on a hitherto little-noticed tax preference enjoyed by private equity and other fund managers that allows them to pay capital gains rates (15 percent) on "carried interest" income they are paid to manage investment funds they do not own. This is significantly lower than the income tax rate that would otherwise be assessed, which could be as high as 35 percent. As Congress moves to take action to close this loophole, nonprofit advocacy groups are mobilizing to support a fix to this unfair aspect of the tax code. At the same time, powerful special interests are working to protect this tax break, which affects some of the wealthiest individuals in this country.

Congress Passes Sweeping Lobbying and Ethics Reforms
After a year-long debate and negotiations over enacting lobbying and ethics reforms, Congress finally passed the Honest Leadership and Open Government Act of 2007 (S. 1). While not an ideal set of reforms, the new law is the most significant lobbying and ethics reform in a decade and should make important strides in increasing accountability and transparency in Washington.

Senate Committees OK Nussle
On July 31 and Aug. 2, the Senate Homeland Security and Governmental Affairs and Budget Committees approved the nomination of former Rep. Jim Nussle (R-IA) to serve as Office of Management and Budget (OMB) Director, by votes of 16-0 and 22-1, respectively. Senate Majority Leader Harry Reid (D-NV) has scheduled a floor vote on the nomination for Sept. 4.

Congress Approves Fiscally Responsible Expansion of Children's Health Insurance
During the week of July 30, the House and Senate passed different versions of a reauthorization and expansion of the State Children's Health Insurance Program (SCHIP) that will expand health care coverage to millions of uninsured children across the country. The Senate version would extend coverage to about four million additional children, while the House version would add five million children and root out excess costs in the Medicare Advantage program, which privatizes health insurance but at a higher cost than traditional Medicare coverage. President Bush has threatened to veto both bills.

House Misses Opportunity to End IRS Private Tax Collection Program
On June 28, the Internal Revenue Service's (IRS) private tax debt collection program survived an effort by the House to bring it to a halt. House legislators struck language in the Financial Services and General Government Appropriations Act (H.R. 2829) that would have put a tight cap on how much funding could have been used to administer the program.

Wall Street Tax Break Comes under Scrutiny
A tax policy allowing private equity fund managers to claim their fee-based income as capital gains rather than ordinary income has suddenly become the subject of media scrutiny, congressional hearings and legislation.

CBO Director Emphasizes Role of Health Care Costs in Long-Term Fiscal Imbalance
Congressional Budget Office (CBO) Director Peter R. Orszag is the latest policy thinker to highlight the underlying cause of the long-term fiscal imbalance: the US health care system.

OMB Director Rob Portman has resigned "for personal reasons," to be replaced by former House Budget Committee chair James Nussle (R-IA).

Details as they become available.

Appropriations Season Kicks Off
Congress shifted into full appropriations mode the week of June 4 as both the House and Senate began subcommittee markups of the twelve individual appropriations bills.

Congress Still Struggling to Settle Earmark Disclosure Procedures
Five months after the House adopted institutional earmark reform rules (H. Res. 6) and the Senate passed statutory requirements governing earmark disclosure (S. 1), confusion reigns in both chambers on how earmark disclosure rules will work and who will administer them.

Congress Passes Supplemental; Cease-Fire in the Capital
On May 24, Congress sent President Bush a version of the $120 billion supplemental war funding bill that he signed into law. The final bill (H.R. 2206) — also raises the minimum wage for the first time in over ten years, a fact that seems to have been lost in national news coverage.

Congress Approves Budget Resolution
On May 17, Congress achieved a basic benchmark of responsible fiscal governance — passing a final budget resolution. The votes were close (Senate 52-40, House 214-209), but Democrats were able to reach final compromises on a few contentious issues.

Congress Demands Answers to USDA Security Breach
On April 13, a user of FedSpending.org, an online database on government spending run by OMB Watch, discovered that the U.S. Department of Agriculture (USDA) was publishing personally identifiable information about a loan she received from the agency.

Congressional Hearing Reveals Flaws in Outsourcing Tax Debt Collection
On May 23, the House Ways and Means Committee heard testimony on the Internal Revenue Service's (IRS) private debt collection program that lets outside contractors pursue federal tax debts.

The latest in fiscal policy, from The Watcher:

Social Programs Are Collateral Damage of the War Funding Debate
A review of the debate over the war funding bill and the social programs caught in the same net.

Budget Resolution Report and Vote Could Come Soon
Conferees have nearly resolved the few major differences between Senate and House versions of the congressional budget resolution.