This just in from the U.S. Department of Supreme Irony - most of us think Congress can't get any more puzzling, but then along comes this little tid bit from yesterday's Senate floor session. The Senate unanimously approved a resolution yesterday (S Res 410) designating April 2006 as "Financial Literacy Month," in the hopes of raising public awareness about

the importance of financial education in the United States and the serious consequences that may result from a lack of understanding about personal finances.

The only thing to really say at this point is, are they serious?

The House Budget Committee approved it's version of the FY 2007 budget resolution last night by a 22 - 17 vote. The resolution sets discretionary spending at the president's proposed level of $873 billion and outlines $6.8 billion in entitlement cuts across a swath of different programs.

The $873 billion level would cut overall spending on discretionary programs by $8.8 billion in 2007 and by $169 billion over the next five years after adjusting for inflation. There will likely be even greater cut backs for non-defense, non-homeland security spending as defense spending is slated for a whopping seven percent increase ourside of costs for the war in Iraq.

In the end, despite hard rhetoric about fiscal responsibility and discipline, this GOP budget will make deficits worse than they are already going to be - increasing them an additional $256 billion above what they would be if current policies are left unchanged over the next five years.

This budget is a step away from sound fiscal policy and once again asks average Americans to bear the brunt of spending reductions through fewer investments in our country and our citizens. In the end, those cuts will have no impact on the increasingly dire fiscal outlook for the nation.

House Panel Approves Budget Outline

White House chief of staff Andy Card has announced his resignation after serving for almost five-and-a-half years in the position. His last day will be April 14. Card is being replaced by current OMB head Josh Bolten, who served as deputy White House chief of staff in Bush's first term.

Washington Post: Andrew Card Resigns as White House Chief of Staff

USA Today's lead editorial today sharply criticizes supporters of the president's latest power grab - an line-item veto (or enchanced rescission power) proposal currently turning some heads in Congress. The editors make very good arguments, particularly the fact that this proposal would actually distract attention from the major issues at play with the errosion of our country's fiscal health, not help to make our government more fiscally responsible.

While the editors correctly point out the president has not vetoed any legislation in his time in office, they failed to mention that the president already has the power he is currently pushing to have granted to him - under the Impoundment and Control Act of 1974. Despite having this power, Bush has yet to prepare and request of Congress one, single rescission as president. He is the first president since it was created in 1974 not to use this power of the office.

Perhaps the president should focus more on using the tools currently in his toolbox before trying to spend a lot of money on a upgraded model that has questionable benefits. Talk about wasting resources.

Public Citizen has filed a federal lawsuit regarding the constitutionality of the budget reconciliation bill. They are seeking to overturn the bill, which was signed into law on Feb. 8 by President Bush, on the grounds that it is unconstitutional because a clerical error resulted in a different version of the bill being signed than what was actually passed. It is possible the courts could rule that the act violates the Constitution -- specifically the bicameral clause -- which requires both chambers to pass identical legislation before it can become law. In a conference call with reporters yesterday, Public Citizen President Joan Claybrook stated, "We haven’t found any other legislation that violated the Constitution like this or we would have challenged it."

This is the second lawsuit being brought against the legislation. The first was brought by Conservative Alabama attorney Jim Ziegler, whose suit cited the same issue. Additionally, House Democrats called for an ethics investigation and for the House to vote again on the original legislation.

The clause in question is over portion of the legislation limiting rentals of durable medical equipment other than oxygen equipment to 36 months. The measure passed by the Senate December 21 limited rentals to 13 months, while the version the President signed limited it to 36 months. The Congressional Budget Office has estimated the cost difference between a 13-month limit and a 36-month limit on the medical equipment to be $2 billion over five years.

The Emergency Campaign for America's Priorities (ECAP) has issued a statement relating to this bill. It appears that Speaker Hastert's (R-IL) office knew of the discrepancies between the two bills and even went so far as to ask "the administration to delay proceedings until the problem could be addressed by the House and Senate." [WSJ, 3/22/06] ECAP spokeswoman Cara Morris Stern stated:

It is shocking that in their fervor to cut vital programs for needy Americans, the President and White House staff ignored warnings from Speaker Hastert’s office that the bill did not pass even the most basic of constitutional guidelines, the Presentment Clause. The President ignored his responsibility to uphold the Constitution of the United States which requires a bill be passed in identical form by both the House and Senate.

Washington Post: Spending Measure Not A Law, Suit Says

OMB Watch released a statement yesterday about the vote in the Senate to increase the nation's debt limit for the fourth time in the last five years.

Read the statement

As part of their vote-a-rama yesterday, the Senate voted to increase the national debt limit by $781 billion, placing the debt limit at almost $9 trillion. The debt limit vote forced lawmakers to cast politically unpopular votes (because they essentially just added almost $1 trillion to U.S. debt), and a number of them showed their disapproval by threatening Majority Leader Frist that they would force votes on budget-reform amendments, including one on the line-item veto. Any amendments added to the debt limit legislation would have sent it back to the House and potentially could have led to a government default (which is why Frist wanted to avoid it).

The line-item veto legislation that Senators wanted to discuss, is expected to serve as a vehicle for other budget reform proposals. Caving to bipartisan pressure, Frist has agreed to schedule time to debate the issue. It is expected he could schedule up to one week of debate sometime before the August recess.

The line-item veto is a reform which would expedite the rescission process and give more power to President Bush. See this Watcher article for more information). Studies have shown that it would actually save very little, yet at the same time it would transfer some appropriating power from the legislative branch to the executive branch. A number of lawmakers, including the prominent House Appropriations Committee Chairman Jerry Lewis (R-CA) oppose line-item veto legislation, both because of its limited affect on truly affecting budget balances and because of this power transfer. As Lewis said in testimony before a House Rules subcommittee on March 15, "Presidents come and go." If lawmakers wanted to work towards truly balancing the budget books, they would reinstate full PAYGO rules.

Washington Post: Congress Raises Ceiling for Borrowing

Roll Call: Frist Agrees to Hold Debate on Line-Item Veto Legislation

Last night the Senate passed the budget resolution by a very close vote of 51-49. Vice President Dick Cheney was on hand in case he was needed to provide a tie-breaking vote. A series of amendments approved by a bipartisan majority added $16 billion in spending to the $2.77 trillion resolution for FY 2007 that came out of committee. The increased spending -- as well as deals made with Gulf Coast lawmakers for increased funding to their states -- helped ensure final passage. Budget caps on discretionary appropriations were raised by $3.3 billion to allow space for funding for low-income energy assistance programs. And, as we previously reported, $7 billion was added $7 billion to help fund education and health programs. This Washington Post article highlights the increased spending as being:

• $3 billion more for heating subsidies for the poor. It passed 51-49.
  
• $7 billion more for education, health and worker safety accounts. It passed 73-27.
  
• $3.7 billion more for military personnel costs.
  
• $1.2 billion more for aviation security and stopping Bush's proposed increase in airline ticket taxes. They advanced by voice vote.
  
• $1 billion more for benefits for military survivors.

Sen. Mary Landrieu (D-LA) was the sole Democrat to vote in favor of the budget, after being promised $10 billion from oil revenues to help rebuild levees and other hurricane-caused devastation her state. Five Republicans broke lines with their party to vote against the deficit-raising budget. These were Sens. Ensign (R-NV), Chafee (R-RI), Coleman (R-MN), Collins (R-ME), and DeWine (R-OH).

This massive budget egregiously includes tax breaks for the wealthy to the tune of $228 billion over five years. It also opens up the Arctic National Wildlife Refuge for oil drilling, a measure that is wildly unpopular with a number of GOP Senators. Notably the Inhofe amendment, which would have further increased discretionary cuts, was defeated 62-35. While Senate rejection of Bush spending caps in this budget is a good sign, the budget is still a fiscally irrepsonsible document that continues the trend of cutting taxes (mainly for the wealthy) while shrinking domestic programs in a time when more and more people are relying on them.

Wall Street Journal: Senate Republicans Break Ranks on Spending

New York Times: Senate Approves Budget, Breaking Spending Limits

The Harkin-Specter amendment restoring $7 billion to Labor-HHS passed the Senate today. It passed 73-27, with the following Republicans voting in favor of the amendment: Sens. Alexander, Bennett, Burns, Chafee, Cochran, Coleman, Collins, DeWine, Dole, Domenici, Frist, Grassley, Hagel, Hatch, Hutchison, Lott, Lugar, Murkowski, Roberts, Santorum, Smith, Snowe, Specter, Stevens, Talent, Thune, Voinovich, and Warner.

Additionally, an amendment offered by Senator Reed (D-RI) was agreed to by a close vote of 51-49. The amendment increases funding for the Low-Income Home Energy Assistance Program (LIHEAP) by $3.3 billion for FY 2007. This puts the funds available to carry out that program at the fully authorized level of $5,100,000,000, and pays for it by closing corporate tax loopholes.

Finally, the Senate voted to increase the debt limit today, 52-48.

The Senate will likely vote to increase the debt limit at some point tomorrow. Below are some good articles on the issue.

New York Times: Senate Could Vote Thursday to Hike Debt Limit

Los Angeles Times: Senate Stalls Debt-Ceiling Decision

The Hill: Debt Limit Vote Seen as Budget Reform Lever

When $8 Trillion Isn't Enough

As of 2:00 PM today the Senate had yet to vote on the Harkin-Specter amendment, which would provide an additional $7 billion over the President’s budget request — allowing Congress to fund the FY07 Labor-HHS bill at the level enacted two years ago, in FY05. A one-pager on the amendment, made available by Senator Harkin's office, is available here.Among many points made, the one-pager says:

The Senate budget resolution says it has more funding for health and education than the President’s budget does. Yet it includes the same total amount for discretionary spending. Therefore, there is no guarantee that the alleged health and education increases will ever materialize in the Labor-HHS appropriations bill. The only way to ensure more funding for Labor-HHS programs is to add money to the total spending level.

After completing 50 hours of debate on the budget resolution bill, the Senate started considering amendments yesterday. So far struck down they have struck down amendments offered by Sens. Kennedy (D-MA), Murray (D-WA), Conrad (D-ND), Bingaman (D-NM), and Akaka (D-HI). They unanimously adopted an amendment offered by Sen. Burns (R-MT) to provide increased funding for veterans health programs, and to negate the need for enrollment fees and increase in pharmacy co-payments.

After casting not one, but two votes last fall in favor or reinstating traditional two-sided PAYGO rules on the budget reconciliation bill (vote) and the tax reconciliation bill (vote), Sen. Tom Coburn caved to his Republican leadership and voted against the same exact PAYGO rules he supported last fall. Coburn's flip-flop on PAYGO was the crucial factor in the failure of the Conrad PAYGO amendment to the budget resolution yesterday.

Instead of moving the Senate toward fiscal restraint by requiring both entitlement increases and tax cuts to be offset (and therefore deficit neutral), Sen. Coburn - a self-declared deficit hawk - has allowed Congress to continue down its reckless fiscal path and has paved the way for more deficit-busting tax cuts in 2006. Any statement Coburn makes now on the importance of fiscal restraint and curbing deficits is little more than posturing - he missed his opportunity to truly make a difference with the country's deficits in Washington.

It is still unclear what caused Dr. Coburn to change his vote on this crucial budget issue. People around the country, particularly those in Oklahoma, who are concerned about the long-term fiscal challenges we face should contact Sen. Coburn (and the 49 other Republicans who voted against logic and responsibility) and share their outrage and disappointment with his vote yesterday.

Sen. Coburn's Washington office number is 202.224.5754.

Republican Senators voting in favor of the PAYGO amendment were Sens. McCain (R-AZ), Chafee (R-RI), Collins (R-ME), Snowe (R-ME), and Voinovich (R-OH).

New York Times: Senate GOP Blocks Tight Budget Rule

Tomorrow the Senate will be voting on a very important amendment sponsored by Tom Harkin (D-IA) and Arlen Specter (R-PA). The amendment will increase the appropriations ceiling by $7 billion, restoring that funding to the committees that have jurisdiction over education, nutrition, social services, energy assistance, Head Start, child care, Meals on Wheels, and many other vital services. These services will otherwise experience significant cuts.

Many of the life-saving programs in the Violence Against Women Act — such as emergency shelters for victims of domestic violence, the national domestic violence hotline, and the rape prevention and education program — are in the Labor/HHS appropriations bill and would thus benefit from the Specter-Harkin Amendment. For instance, the $175 million Family Violence Prevention and Services Act (FVPSA) program funds over 2,000 battered women’s shelters nationwide. These shelters serve over 300,000 women, men and children every year. But these same programs must turn away approximately 250,000 people every year because they are full or lack resources. This essential program has never received full funding, and the Specter-Harkin amendment would be crucial to providing additional funds. It would literally save the lives of victims of domestic violence who are fleeing abusive relationships.

The Senate will be considering amendments to the budget resolution that came out of committee today and likely voting on it tomorrow. Here is a good analysis of the effects this budget resolution would have:

Center on Budget and Policy Priorities: The Senate Budget Committee's Plan: A Brief Analysis

The budget resolution approved by the Senate Budget Committee includes a provision opening the Arctic National Wildlife Refuge (ANWR) to oil exploration, promising to set up a showdown on the floor next week. The provision is contentious because it would protect the provision from filibuster. A letter of objection was signed by prominent Republican Senators including Sens. Lincoln Chafee (R-RI) Norm Coleman (R-MN), Susan Collins (R-ME), John McCain (R-AZ), and Olympia J. Snowe (R-ME), saying:

Congress should not be making environmental and energy policy decisions of this magnitude on the budget bill.

Two dozen GOP House members have signed a similar letter opposing the inclusion of ANWR drilling in the budget resolution.

Late Wednesday night, the House Appropriations Committee approved a $91 billion supplemental spending bill, which allocated $72.4 billion for the wars and $19.8 billion for hurricane relief. The new funding for the wars will push the total cost over $400 billion since the wars began.

The bill approved by the committee made some modifications to the president's request, including increasing funding by $1 billion for Abrams tanks, Bradley vehicles and Humvees. To help offset the cost, the committee cut many items requested by the administration, including funding for the Air Force to cover increased fuel costs.

The House is expected to vote on the bill next week and the Senate Appropriations Committee has scheduled a markup for March 30.

Senate Budget Committee Chair Judd Gregg (R-NH) unvelied the 2007 budget resolution mark yesterday. Notably it did not contain any reconciliation instructions for tax cuts, which may get in the way of efforts to cut taxes outside of the left-over tax reconciliation bill from last year that Congress is still negotiating. Additionally, it drops Bush's proposal for Medicare cuts and health savings accounts.

The mark sets discretionary spending at $873 billion for FY 2007, and does include revenue reductions. According to the committee summary "[the bill] assumes a modest reduction in revenues, relative to the baseline, that balances the need for fiscal responsibility with the need to continue modest tax rates necessary to continue economic growth and job creation."

House and Senate negotiators are still trying to work out the details of the 2005 tax reconciliation bill, which calls for $70 billion in tax cuts that are protected from filibuster. The summary of the mark states, "Since the Tax Relief Act of 2005 (pursuant to the reconciliation instruction in the FY 2006 budget resolution) has not yet been enacted, the tax relief assumed in the Mark is sufficient to accommodate extensions of current capital gains and dividend tax rates and existing provisions for small business expensing through the five year budget window."

The House Budget Committee was supposed to hold its markup session this week, but has postponed it to a date yet to be determined. April 15 is the internal budget resolution deadline used by Congress, but they often fail to complete it by that date.

The right-wing House Republican Study Committee has put together their budget alternative, called "Contact for America: Renewed." It calls for a budget even more drastic (and frightening) then the one proposed by the President himself. Their process reform recommendations towards the end of the document however, are particularly interesting, especially in regards to areas such as earmark reform.

The Senate approved funding yesterday for the Low Income Home Energy Assistance Program in a 68-31 vote to accept a second-degree amendment offered by Sen. Olympia Snowe (R-ME). The amendment provides an additional $1 billion for LIHEAP for this fiscal year, disbursing half of it through both LIHEAP's traditional funding formula and a contingency fund to be released at the discretion of the White House. The focus is now on the House, where a number of conservative members have argued that the added LIHEAP funding this year is not paid for. There does not appear to be a timetable for action in the House.

Secretary of the Treasury John Snow sent a letter to Congress Monday saying he has taken "all prudent and legal actions” to stay under the $8.184 trillion debt limit and again strongly urged passage of an increase “immediately." Congress, which must act or else they could default on payments to bond holders or fail to make other scheduled government payments, will most likely pass a debt limit increase. This will mark the fourth time the debt limit has needed to be increased under President Bush. If this new hike is approved, the limit will have jumped by $3 trillion since he took office.

It is expected, however, that Senate Democrats will push for full debate on the increase. It is likely they will seek to amend the current situation and push for full restoration of pay-as-you-go rules, which would require all new mandatory spending and tax cuts to be offset.

The Congressional Budget Office released the Monthly Budget Review yesterday, reporting that the government incurred a $219 billion deficit in the first five months of FY 2006. The CBO is estimating a total deficit for FY2006 to be $371 billion. The deficit in February was $121 billion, which is $7 billion more than the deficit recorded in February 2005.

The Congressional Budget Office has completed a preliminary analysis of the President's FY07 Budget.

• Analysis
  
• Supplemental Data

The report found that the President's proposal will:

• Spend about $925 billion on discretionary programs in FY07;
  
• Add $35 billion to the CBO's current deficit projections, putting the deficit projection at $371 billion;
  
• Reduce revenues by nearly $9 billion for FY07;
  
• Reduce revenues by $282 billion from 2007-2011 if some of the President's expiring 2001 and 2003 tax provisions are extended;
  
• Increase outlays by $27 billion (mostly in military spending in Iraq and Afghanistan);
  
• Increase defense funding by an average of 2.8 percent per year through 2011; and
  
• Reduce Medicare outlays by $138 billion from 2007-2016.

The report also states the deficit will decline as a share of GDP, going from 1.6 percent in 2008 to 1.3 pecent in 2009, and finally stabilizing at approximately 1 percent annually through 2016. These deficit projections, however, exclude the costs of supplemental emergency appropriations, the President's proposal for private Social Security Accounts, as well as the cost of fixing the Alternative Minimum Tax.

Today Sens. Harry Reid (D-NV), Max Baucus (D-MT) and Kent Conrad (D-ND) sent a letter to Majority Leader Bill Frist (R-TN) concerning the Debt Limit. Senators Baucus and Conrad spoke on the floor today to discuss this issue and the letter.

• The charts used by Senator Conrad
  
• The letter to Sen. Frist

Chairman of the Senate Budget Committee Judd Gregg (R-NH) criticized the President's budget plan yesterday, calling the White House budget practices "irresponsible" and "unrealistic." In an interview with CongressDaily Gregg said Bush has supported massive increases for defense, and has augmented those increases with emergency funding that does not fit within budget caps. He said to expect "a reasonably vanilla year in the area of budgeting," but noted that one of his goals will be to rein in "this new shadow budget called emergency spending." Gregg, who is also Chairman of the Senate Homeland Security Appropriations Subcommittee, said:

"It's a very strange approach to budgeting that they've taken. Because essentially what they're saying is, 'Everything else in the government is going to be subject to severe limitations in spending, but the area that we're interested in is going to have no budget process at all, it's simply going to be done outside the budget process through emergencies.' And I don't think they have any credibility on budgets. I've made my points very clear to the White House."

Bush's FY07 budget request has the Defense Department seeing a $24 billion increase over this year's budget; this increase does not include emergency funding. Bush has requested $115 billion in emergency funds for this year and next to finance wars in Iraq and Afghanistan.

Gregg also cited grievances regarding Bush's proposed cuts in Medicare and other entitlements through the budget reconciliation process, noting that this year there are added election-year pressures in voting. He said, "Last year was an extremely aggressive budgeting year, though there were a lot of people who pooh-poohed it. This year being an election year, I'd be happy to do another aggressive budget, but I've got to have 51 votes and I don't think I have them."