OMB Watch released a statement yesterday afternoon harshly criticizing the Democratically control Congress and the president for abandoning fiscal responsibility in the final hours of 2007 after they entire year was spent adhering to or attempting to adhere to righting our nation's fiscal course. From the statement:

Adding insult to a year of fiscal policy injuries, Congress has abandoned fiscal responsibility by waiving pay-as-you-go (PAYGO) rules in order to pass a one-year patch to the alternative minimum tax (AMT) without offsets. This tax cut adds another $50 billion to an already expanding deficit next year, and will give fewer options for our children and grandchildren to seek solutions to the problems of tomorrow.

While I expect as much from President Bush, this is a huge disappointment from the new Democratic majority in Congress whose number one promise was to uphold pay-as-you-go (PAYGO) rules. So much for promises:

This vote is particularly disappointing as Democrats have gone to great lengths this year to comply with PAYGO rules, particularly on spending. From student loan reforms to expansions of the State Children's Health Insurance Program and Food Stamps, Democrats have negotiated the turbulent fiscal waters of the federal budget responsibly, diligently, even courageously. That is why at this point, after all that work and sacrifice, the compromises and the concessions needed to construct balanced solutions to the AMT problem, it is unacceptable for them to abandon their stated principles of fiscal responsibility because they fear Americans will not accept paying up front for the services and benefits the country demands.

As the statement makes clear, there is plenty of blame to go around in Washington for this policy failure. What an awful way to end 2007.

The omnibus appropriations bill passed by the House last night contains 3,500 pages and over $516 billion in spending. Yet with all that space (and money), Congress could not find enough room for even their own priorities from earlier this year for the Internal Revenue Service (IRS). Specifics of the IRS's funding take from the omnibus show the House has included $2.15 billion for taxpayer services, down slightly from the $2.155 proposed earlier this year, $4.78 billion for enforcement (down from $4.93 billion) and $3.68 billion for operations (down from $3.77 billion). What's more, the House has backed away from a requirement for the IRS to develop a strategic plan to address the tax gap. The total IRS budget request ($10.89 billion) is $203 million below even President Bush's request!. What is going on here?

So, just to review, despite a year in which congressional hearings revealed that the IRS is underfunded, runs a dangerous and wasteful privatization program, and has no strategic plan for addressing the tax gap, Congress decided to give it less money, allow the privatization program to continue, and let the IRS off the hook for developing a strategic plan.

And I wonder why people don't believe in government...

With two votes, the House voted to approve $484.7 billion in domestic discretionary and emergency spending (253-154) and $31 billion for spending on the conflict in Afghanistan (206-201).

The Senate will take up the bill today. It is expected that it will tack on about $40 billion in additional war funding. Unlike the House version, which prohibited any of the $31 billion war supplemental to be spent on operations in Iraq, the Senate's $70 billion war spending measure would fund both wars.

President Bush suggested tonight that Congress might want to pass a year-long continuing resolution instead of the compromise bill he forced them to develop. The Hill reports:

If the Congress can't get the job done — in other words, those jet fumes'll start to be moving out … pretty soon here, later on this week — if they can't get the job done, then I've got a suggestion for them, and just pass a one-year continuing resolution.

Seriously? It seems as though the president has gone off the deep end. Is it 2008 yet?

CQ Today reported ($) this afternoon the Senate is close to a deal on extending SCHIP into 2008. According to the article, a bill is being written to delay cuts taking effect Jan. 1 to Medicare physician pay rates that would include an extension of the SCHIP program. From CQ:

The package also is expected to include a funding extension of the State Children's Health Insurance Program, or SCHIP, but it's uncertain for how long. There appeared to be agreement earlier on an extension until 2009, but the Republican aide cautioned that the situation was "fluid."

House Democrats have been pushing to extend SCHIP funding until September 2008, in order to force another debate on what they see as a winning political issue. A extension until 2009 would certainly make the legislation more palatable to Republicans, however.

SCHIP is set to expire this Friday if Congress does not act to extend it further.



Posted by Adam Hughes, 06:26:38 PM



Dems, Bush Strike a Deal on Budget

The Democrats struck a deal over the weekend on the 11 remaining appropriations bills, coming close to President Bush's $933 billion total spending cap, but shifting funding within spending accounts to fund more domestic priorities. As a result, $6 billion was moved out of defense, foreign aid, and military construction to fund domestic priorities such as Amtrak, Veteran's programs, medical research, low-income energy assistance, the Commodity Supplemental Food Program, and other important support programs.

This compromise seems to be about the best that could be expected. It still will cut some programs after adjusting for inflation and population growth, but it is likely better than a long-term continuing resolution.

Wash Post Democrats Tighten Spending in Latest Version of Bill
AP: Budget Bill Reverses Bush Cuts
NY Times: Democrats, Staying Within Spending Limit, Draft Budget with Domestic Emphasis

Greg Anrig has a great article on how the conservative approach to budgeting and regulation is to blame for FDA's recent troubles.

It's possible to read all 300-plus horrifying pages of a new Food and Drug Administration subcommittee report describing the agency's slow asphyxiation by prolonged budgetary constraints without learning who is responsible for its decline.

Subcommittee member and attorney Peter Barton Hutt, who served as FDA chief counsel during the Nixon and Ford administrations, pointed his finger at the American public in his own supplemental contribution to the report: "It is not a problem caused by partisan politics. The administrations of President Clinton and President Bush have been equally unresponsive to FDA's needs. ... The country cannot withhold the requisite scientific resources from FDA and then complain that the agency is incapable of meeting our expectations."

But if everyone is to blame, then no one is. Recent fiascoes like the Melamine-tainted pet food and lead-laced Mattel toys, both imported from China, are sure to continue in the absence of meaningful accountability. The truth is that the carnage described in the report is as much a conservative-movement accomplishment as the creation of the FDA was a great progressive-era triumph.

There's more where this came from. Check out his book, The Conservatives Have No Clothes: Why Right-Wing Ideas Keep Failing.

EJ Dionne says the biggest thing wrong with the Democrats is that they haven't been good at blaming Republicans for causing legislative gridlock.

What's the alternative to internecine Democratic finger-pointing of the sort that made the front page of yesterday's Post? The party's congressional leaders need to do whatever they have to do to put this year behind them. Then they need to stop whining. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid should put aside any ill feelings and use the Christmas break to come up with a joint program for 2008.

They could start with the best ideas from their presidential candidates in areas such as health care, education, cures for the ailing economy and poverty reduction. Agree to bring the same bills to a vote in both houses. Try one more time to change the direction of Iraq policy. If Bush and the Republicans block their efforts, bring all these issues into the campaign. Let the voters break the gridlock.

If Democrats don't make the 2008 election about the Do-Nothing Republicans, the GOP has its own ideas about whom to hold responsible for Washington's paralysis. And if House and Senate Democrats waste their time attacking each other, they will deserve any blame they get next fall.

Sounds about right. A basic flaw in the 2007 agenda has been the emphasis on legislation that seems middle-of-the-road enough to pass. But Democrats will achieve few substantive policy changes as long as the hard right retains and recklessly uses the power to obstruct. It's probably time to lay down some serious markers and go to the mat for them, just in case.

Congress, Thursday evening, passed a one-week continuing resolution (HJ Res 69) that funds operations of the federal government at 2007 levels through next Friday (December 21).

Meanwhile, rampant speculation on the shape of an omnibus measure continues.

Perhaps it's too soon to write a post-mortem on the budget debate. Particularly because the Coalition on Human Needs just put out a good summary of how the Bush cuts would impact people, and since they're asking for advocates to call Congress in support of human needs programs.

But here's one anyway. The best message was the "Republicans don't want to to spend money on program X, but they'll spend obscene amounts on Iraq." It probably did a lot of damage. It clarified the hypocrisy and misplaced priorities of their stance and smeared it with the taint of one of the least popular decisions they've made.

But I never heard, or came up with, a good message in favor of the Democrats' budget proposals. Basically we'd trot out some program they knew everybody liked and say "look, support our entire budget because we want to fund popular program X." I think that message was a lot less compelling, judging by the lack of a strong base of support for the Democratic proposals.

Basically, nobody's going to the mat over these budget proposals. Not the appropriations committees, not the leadership. I just don't think anybody's really holding their feet to the fire.

So one immediate thing to take away might be that a compelling critical message is insufficient, given that the hard right still wields considerable power over legislation and will most likely never be deterred willingly. Then again, solid messages on both fronts may not be enough. Next year might be even worse. The opposition, unfortunately, has probably been emboldened by their wins, and the good(er) guys are getting burned by looking "weak" in the press.

OMB has launched their website that will comply with the 2006 Coburn-Obama Federal Funding, Accountability, and Transparency Act (Transparency Act) today. You can visit it at www.usaspending.gov. OMB really needs to be commended for this site, for launching it two weeks before required under the legislation, and for their commitment to transparency.