Thursday, March 26, 2009

The Daily Strike-3/26/09-Budget Preview

Good evening once again from Cleveland, Ohio. Thanks to those who have offered comments in the past few days. If you haven't yet, please do. We're always looking for input.

BUDGET PRIMER: The main legislative event happens next week when the House and Senate consider their annual budget resolutions. Each of them will mostly resemble the proposal put forward last month by President Obama. We'll make sure to go over the difference between the House and Senate versions next week.

First, I want to clear up some important process components of the budget. The annual budget resolutions are non-binding, meaning they do not actually go the the President. Rather, the resolutions serve two purposes. First, they set spending targets for each of the 13 appropriations subcategories. The House and Senate appropriations subcommittees will use the numbers laid out in the budget resolution when they craft the 13 annual appropriations bills which determine all discretionary spending. The other main function of the budget resolution is to lay out your party's priorities. Since the budget is such a large, all-encompassing legislative bonanza, it's a good way to show where your party wants to invest money, how much it wants to tax, and what policy initiatives will be on the front burner. This year, the Democrats are using the budget resolution to outline their priorities of health care reform, energy legislation, education investment and deficit reduction.

Because the budget resolution pretty much articulates everything a party stands for, it's pretty unlikely that you're going to get many votes from the other party. Therefore, budget resolutions are almost always strict party line votes. Also, due to special rules, the resolution is not subject to a filibuster, and therefore needs only 50 votes to pass the Senate. The other special part of the budget resolution is that it can include reconciliation instructions (which we talked about yesterday.)

Now to the current budget debate. The opposition party almost always releases an alternative budget to showcase their own policy priorities. It is custom to include the alternative as a substitute amendment on the floor of both chambers. President Obama had dared the Republicans to release an alternative. It's especially significant this year, because of the economic crisis. It's easy to criticize someone else's budget for taxing and spending too much. But it's a lot harder to make the tough choices.

The Republicans released their alternative budget today. Apparently it wasn't really a budget at all, but a 19 page blueprint that had basically zero details. It called for cuts in spending through weeding out "waste, fraud and abuse" which basically is budget-speak for "we don't want to cut anything politically popular." It also calls for taxes for those making above $100,000 to be cut to 25 percent. So basically, you'll cut rich people's taxes by 10 percent. Of course, those making $100,000-200,000 only currently pay slightly more than that in taxes right now. So the real cuts are for the VERY wealthy. In fairness, they would cut taxes for those making under $100,000 to 10 percent, which is the current rate paid by low income earners. As if this budget proposal wasn't absurd enough, Republican Whip Eric Cantor and ranking member of the Budget Committee Paul Ryan were angry at the House Republican Leadership for releasing their budget alternative before the budget committee Republicans could hammer out their own proposal. Talk about the low point for a political party, they are infighting on an alternative to a non-binding measure that has zero chance of passing. Ladies and gentlemen, your 2009 Republican Party.

The actually important news today was that the Senate Budget Committee approved their version of the budget today on a party line vote. Their proposal, as we talked about yesterday, sways slightly from Obama's, but still holds true to the President's basic goals. We'll have full coverage of the budget fight next week.

THE SENATE: The Senate today passed their version of a bill to expand funding for public service programs. The bill was sponsored by Massachusetts Democrat Ted Kennedy and Utah Republican Orrin Hatch. The House and Senate will reconcile their versions of the bill in the next couple of weeks, and I assume, will send it to the President in April. The President has promised to sign the bill, and even took time to praise it in his address to Congress. The bill passed by a vote of 79-19 (it was subject to the 60 vote threshold by prior agreement). All no votes were from Republicans. Several amendments were voted on before final passage:

-An amendment to express the sense of the Senate on charitable income tax contributions. I have no idea what this was about, but it was agreed to 56-41 on a pure party line vote.

-The Republicans then offered another amendment on that same subject, and it failed by a vote of 49-48. Democrats crossing over included Bayh (IN), Boxer (CA), Hagan (NC), Lieberman (CT), Lincoln (AR), Nelson (NE) and Webb (VA). I'll see if I can find out what the difference between these two amendments was.

-Next was a vote on a joke amendment by Clown Senator David Vitter of Louisiana, which would have prohibited any money in the bill from going to Republican Boogie Man group ACORN (they're actually community activists). The amendment was killed 53-43. Senators Byrd (WV) and Nelson (NE) were the Democratic ACORN-haters.

Other amendments were accepted by unanimous consent.

THE HOUSE: The House had a mostly quiet day. They passed a bill to increase funding authorization to fight wildfires by an overwhelming 412-3 vote. Anti-spending Reps. Flake (R-AZ), Paul (R-TX) and Sensenbrenner (R-WI) voted against the bill. Prior to passage, the House voted on various amendments, but it's getting late, and I don't want to belabor the point on this relatively minor bill.

I'll save the uber-details for the budget next week.


-Geithner's Proposal: Treasury Secretary Tim Geithner unveiled a list of sweeping new financial system reforms today. As The Big Picture wisely noted, the devil is in the details. But on paper, these proposals look like a very promising attempt at changing some of the poor structures that led to the current crisis. The proposal includes six elements:

-Create a single entity for ensuring sustainability among large financial institutions
-Require that high-risk financial institutions maintain more cash on hand
-Require hedge funds to register with the Securities and Exchange Commission
-Establish a "comprehensive framework" to provide oversight on derivatives market
-Regulations to protect against rapid market withdrawals from money market accounts
-Establish a stronger resolution authority that makes it easier for the federal government to take over troublesome financial institution, the same power that the FDIC has over commercial banks.

Sounds pretty ambitious to me, but apparently Wall Street types were saying that this was "not real reform" and "low hanging fruit." Even that would be a lot better than what we've had for the last 30 years.

-The President held a digital town hall meeting today. I won't go into it too much, but for all you teenagers-at-heart out there, the President made news by saying he does not favor the legalization of marijuana.

-More importantly, the President is expected to release a comprehensive new strategy for Afghanistan in the next few days that will apparently include additional troop increases of 4,000, a new set of benchmarks to measure progress, and renewed diplomatic efforts. I don't want to judge the plan before I see it in its entirety, but it worries me that they seem to be doubling down on Afghanistan after sending 17,000 new troops last month. There better be a darn good diplomatic effort in store.

FINAL THOUGHTS: I wanted to address a great comment last night from someone who asked how a Senator can propose an amendment completely unrelated to an underlying bill. For some reason, it wouldn't let me post a comment in the comments section, but I figure I should address it. The commenter is exactly right. Senate rules do not restrict amendments to those that are germane to the matter at hand. The House requires all amendments to meet certain germane-ness standards. This is a very important difference in the two chambers, because Senators can bring down a bill by forcing a vote on a completely unrelated hot-button issue. Thanks for your comment!

Also, this will be the last post until next Monday's Weekly Strike, because I am traveling over the weekend. Hopefully The Big Picture will chip in. If you have questions about what's going on, write them in the comment section, and I'll ditch my friends to respond to you. Thanks!

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