On Jan. 26, the Senate rejected an amendment sponsored by Sens. Kent Conrad (D-ND) and Judd Gregg (R-NH) that would have created a bipartisan deficit commission. Due to the complex nature of the proposal, there is a low probability that such a commission would succeed in its goal to slow the growth of the national debt. Despite the improbability of success, there is much speculation that the president will now create a similar deficit commission through executive order.

The House Budget Committee held a hearing on June 24 on the Statutory Pay-As-You-Go (PAYGO) Act of 2009, which was recently introduced by Rep. Steny Hoyer (D-MD). During the hearing, House members focused on the enforcement mechanisms in PAYGO, the significant exemptions granted under the proposed legislation, and whether the bill is the appropriate method to reinstate fiscal discipline in Congress.

The political reality, especially in an election year, makes extension of the so-called "middle-class" tax cuts very likely. Hardly anyone is arguing against extending these cuts, as long as they are paid for. However, there are very good arguments why, even If the cost of the extension is offset, extension of these tax cuts is not supportable.

The Senate budget being debated this week includes only a two-year cap on appropriations, and continues Senate pay-go rules that apply to both entitlement increases and tax cuts. However, concern over other changes in budget rules remains.