House, Senate Reach Deal on FY 2010 Budget Resolution

The House and Senate negotiators have reached agreement on the FY 2010 budget resolution. The resolution is expected on the floor of both chambers by tomorrow, marking the 100th day of President Obama's administration. Overall, the compromise fulfills many of Obama's top priorities, including reducing the nation’s dependence on foreign oil, improving education, reforming health care all the while reducing the deficit and cutting taxes, mainly for the middle class.

The last obstacle to finalizing the compromise seems to have been the House Blue Dog Coalition and their efforts to force Congress to follow Pay-As-You-Go (PAYGO) rules more closely. CQ reports [1]:

Most details [on the final resolution] had been decided earlier in the day, but negotiators were working into the evening to assuage the concerns of the Blue Dog Coalition, a group of fiscally conservative House Democrats who want the Senate to commit to advancing a bill this year that would put into law the pay-as-you-go rule, which requires tax cuts and new mandatory spending to be offset with tax increases or budget cuts elsewhere in the budget.

...

As a condition of supporting the House budget in March, Blue Dog leaders won a provision in the House version of the budget (H Con Res 85) that would pave the way for a House vote on statutory pay-as-you-go legislation. But a tentative agreement between House and Senate negotiators did not include a corresponding requirement for the Senate to vote on similar legislation, raising questions about what, if any, impact it ultimately would have.

The Washington Post has more details about the PAYGO fight [2] in a good article this morning that lays out some of the costs and consequences of repeated violation of PAYGO rules.

There still aren't a lot of details available on the budget agreement, but it does reduce Obama's request for non-emergency discretionary spending by $10 billion, to $1.086 trillion for FY 2010 and includes the option of using reconciliation for health care reform later this year. It also includes $512 billion to extend parts of the Bush tax cuts for the middle class and $214 billion for a three-year alternative minimum tax patch. And as I predicted [3], it does not include the language from the Lincoln/Kyl estate tax amendment that would give away even more resources to the wealthiest Americans above the $72 billion already in the budget for changes to the estate tax.

Legislative Text of FY 2010 Budget Resolution [4]
CQ: Negotiators Reach Deal on Budget [1]
WP: Squabble Snags Obama Budget [2]