September 17, 2009 – H.R. 3221, Student Aid and Fiscal Responsibility Act

This bill eliminates the Federal Family Education Loan program and shifts all student loans to a government-run and taxpayer financed system under the Direct Loan program, as well as creates nine new programs and increases the federal government takeover of early education, higher education, school construction, and more.


Currently, the federal government provides both subsidized and unsubsidized loans for higher education (both undergraduate and graduate) using two main programs—the Federal Family Education Loan (FFEL) program, and the Direct Loan (DL) program.  The FFEL loan program offers subsidized loans to students from private lenders.  The FFEL program makes it possible for borrowers to get student loans at low interest rates.  In contrast, the DL program uses the federal government as the lender to provide capital for all loans (as well as interest on subsidized loans).  Under the DL program, the Department of Education serves as the lender and funds come directly from the U.S. Treasury.

The Higher Education Act (current law) sets the terms and conditions on DL and FFEL loans, including the interest rate, repayment periods, default and forbearance capabilities.  The FFEL program was created in 1966, and has provided subsidized loans to students for more than 40 years.  With over 2,000 lenders participating in the FFEL program, serving approximately 4,400 institutions, $70 billion in FFEL loans have been made available to students this year.

The DL program began under President Clinton in 1993, and has only captured about 34 percent of the total loan market at its height, and has proven to be less efficient and responsive than the FFEL program.  With approximately 1,700 institutions currently participating in the DL program, DL has made available $22 billion in student loans this year, and many of these schools were forced into the program as the capital markets worsened last year.

In the 110th Congress, the House passed H.R. 2669, the College Cost Reduction and Access Act.  The bill provided new public service loan forgiveness to borrowers in the DL program but did not include the same benefit for borrowers in the FFEL program.  H.R. 2669 temporarily cut interest rates for students who had DL and FFEL loans.  The legislation also cut payments to FFEL lenders just as the capital markets began to seize up during the subprime mortgage crisis, finding some FFEL lenders unable to finance securitizations.


As proposed in President Obama’s FY 2010 budget, H.R. 3221 eliminates the FFEL student loan program that has been the overwhelming choice of students and families for more than 40 years, replacing it with a government-run program.  While Democrats continue to use government takeovers as a panacea to all economic problems, converting all student loans to government subsidized loans is just another way that Democrats are killing jobs, increasing government intrusion, and eroding the rights of the consumer.

Effectively eradicating the private sector competition in the student loan industry and shifting all student loans to the DL program kills jobs and greatly expands the federal government’s control of the educational loan market.  By eliminating the FFEL program, Democrats will limit choices for parents and students seeking educational loans and decrease the quality of service historically provided by private lenders.  In 2007-08, the FFEL program served more than 6.4 million students and parents at 5,000 postsecondary institutions, lending a total of $55.3 billion (or 78 percent of all new federal student loans).



The motion would recommit H.R. 3221, the Student Aid and Fiscal Responsibility Act, back to the House Education and Labor Committee with an amendment.

The amendment would add a Title VI to the bill entitled “Defund ACORN Act,” similar to H.R. 3571, offered by Minority Leader Boehner (R-OH).  The prohibitions in the title state that:

– No federal contract, grant, cooperative agreement, or any other form of agreement may be awarded to or entered into with the organization;

– No federal funds in any other form may be provided to the organization; and

– No federal employee or contractor may promote in any way (including recommending to a person or referring to a person for any purpose) the organization.

A covered organization will include:

– Any organization that has been indicted for a federal or state violation of the laws governing the financing of campaign for election for public office or any law governing the administration of an election for public office, including a law relating to voter registration;

– Any organization that has had its state corporate charter terminated due to failure to comply with lobbying disclosure requirements;

– Any organization that has filed a fraudulent form with a regulatory agency;

– Any organization that employs any applicable individuals in a permanent or temporary capacity, has under contract or retains any applicable individual, or has any applicable individual acting on the organization’s behalf.

The term organization refers to ACORN and its affiliates.


Published in: on September 17, 2009 at 6:17 pm  Leave a Comment  

Friday, July 31: H.R. 3269 – Corporate and Financial Institution Compensation Fairness Act

The bill contains four major components:

(1) “say-on-pay” provisions that would apply to all public companies and require an annual shareholder advisory vote on compensation and a shareholder vote on so-called “golden parachute” clauses;

(2) independent compensation committees comprised of independent directors for all public companies and a requirement that compensation consultants satisfy independence criteria established by the SEC;

(3) incentive-based compensation disclosure requirements that would apply to all financial institutions, defined to include banks, bank holding companies, broker-dealers, credit unions, investment advisers and any institution identified as appropriate during joint rulemaking by the relevant Federal financial regulators; and

(4) compensation standards for all financial institutions that would require Federal regulators to proscribe inappropriate or imprudently risky compensation practices as part of solvency regulation.

The following amendments will be considered:

Frank Amendment – Removes the bill’s provision that Rep. Price had included in markup which prohibits clawbacks of executive compensation approved by shareholders. The amendment instead, prohibits financial regulatory rules from requiring companies to recover incentive-based pay.

PASSED 242-178 – See Roll Call Vote

Garrett Amendment in the Nature of a Substitute – Strikes all provisions of the bill and instead allows shareholders to vote on holding a non-binding shareholder vote every three years on executive compensation.

If two-thirds of a company’s shareholders do not vote in favor of such a triennial vote, then no vote would occur.

The amendment contains similar language to the bill’s provisions regarding compensation committees, but allows state law to supersede such provisions.

The substitute does not include the bill’s provisions dealing with incentive-based compensation.

FAILED 179-244 – See Roll Call Vote

Republican Motion to Recommitt

The motion would recommit H.R. 3269, the Corporate and Financial Institution Compensation Fairness Act, back to the House Financial Services Committee with an amendment.

The amendment would require the disclosure of activities to influence non-binding shareholder votes on compensation required by the underlying bill.  The amendment prohibits a shareholder’s vote from being counted if the shareholder has spent more than a de minimis amount of money on activities to influence the vote of other shareholders, unless the shareholder discloses the activities to the Securities and Exchange Commission (SEC).  The SEC would be charged with collecting information on individuals, or organizations, that influence the shareholder vote, such as who is spending the money, what they are spending it on, and how much they are spending to influence the vote of other shareholders.

FAILED 178-244 – See Roll Call Vote

VOTE ON FINAL PASSAGE: PASSED 237-185 – See Roll Call Vote

Published in: on July 31, 2009 at 5:48 pm  Leave a Comment  

Wednesday, July 22: H.R. 2920 – Statutory Pay-As-You Go Act

The measure sets in law pay-as-you-go (PAYGO) rules that would require legislation affecting mandatory spending or tax revenue to be budget neutral, i.e., not increase the deficit. This will only provoke more spending and tax increases.

It requires the Office of Management and Budget (OMB) to maintain a “ledger” of enacted legislation and determine whether presidentially ordered sequestration (automatic, across-the-board spending cuts) would be required to bring the federal budget back into balance.

The bill exempts four tax and spending policy areas from the OMB’s calculation to determine if sequestration is required: any extension of middle-class tax cuts; any “patch” to prevent the alternative minimum tax (AMT) from affecting more taxpayers; changes to the estate tax; and measures to prevent cuts in Medicare payments to doctors.

The measure allows the president to rescind congressional designations of spending as “emergency,” thereby including such spending in OMB’s calculations on the deficit impact of legislation.

CBO has estimated that the bill would increase the deficit because legislation in the four exempt policy areas would be figured on the basis of changes from current policy, not from current law, and because of other provisions of the measure that would change how the deficit is calculated.

Ryan (R-WI) Amendment:

Highlights of the amendment, which would replace the underlying bill, are as follows:

Discretionary Spending Controls: The amendment establishes limits on discretionary spending over the FY 2010-2014 period.  The limit would allow discretionary spending to grow at the rate of inflation, which is what is currently assumed in CBO’s baseline (though Congress usually enacts a higher spending level). 40% of the federal budget consists of discretionary spending, and the underlying bill completely exempts such spending from the PAYGO requirement.

Total Spending Limit: The amendment establishes a total spending limit, expressed as a percentage of GDP, for each year over the ten-year budget window.  Through FY 2013 the limit would accommodate CBO’s baseline.   In 2009, federal spending will amount to approximately 28% of GDP, according to the most recent projections.  Under the spending limit set by this amendment, this would decline to 21.7% of GDP by 2013.  It would stay at that level (or 21.8% in a couple years) for every succeeding year.   Spending above the limit would be subject to sequestration.

Deficit Limits: The legislation establishes deficit limits, expressed as a percentage of GDP, as follows:  8% of GDP in 2010, 6% of GDP in 2011, 4% of GDP in 2012, and 3% of GDP in 2013 and in each succeeding year.  These limits would also be enforced via sequestration.  According to the Budget Committee Republicans, these limits provide for $2.4 trillion of deficit spending compared to the President’s budget.



Published in: on July 23, 2009 at 3:31 pm  Leave a Comment  

Friday, June 26: H.R. 2454 – The American Clean Energy and Security Act

This legislation aims to create clean energy jobs, achieve energy independence, reduce global warming pollution and transition to a clean energy economy.

Possible Concerns

National Energy Tax: This is a tax that will affect constituents in every aspect of their lives. From transportation, to food, to electricity, to income – this is the ultimate regressive consumption tax to the tune of nearly $3,000 per year according to the Heritage Foundation. The costs per family for the whole energy tax aggregated from 2012 to 2035 are estimated to be $71,493.

Exacerbates the Economic Crisis: Studies from numerous independent research groups, including MIT, the Heritage Foundation, and CRA International, all agree that implementing a massive cap and tax scheme will cost millions of jobs, reduce earnings for the average U.S. worker, and devastate GDP.

Massive Job Losses: According to the Heritage Foundation, employment will be lower by 1,105,000 jobs per year. In some years, the national energy tax will reduce employment by nearly 2.5 million jobs.

Winners & Losers:
The bill transfers wealth from rural areas to cities. States like California, Washington, and New Jersey would receive more emission credits than they need, enabling them to sell surplus credits to smaller facilities in states like Ohio that receive maybe half of the credits they need – making the rich, richer, and the poor, poorer.

Little Environmental Impact:
The bill will cost consumers trillions of dollars, while reducing, by a very small amount the carbon dioxide that is contained in our atmosphere. World-wide emission reductions would be negligible without the full participation of all nations. Additionally, just because the government requires a certain decrease in 1 emissions within a certain timeframe, does not mean such decreases can occur in that time period.

Green Jobs Are a Proven Failure:
According to a recent study that reviewed the impact of “green jobs” in Spain, the U.S. can expect 2.2 jobs to be destroyed for every 1 renewable job financed by the government. Only 1 in 10 of the jobs actually created through green investment is permanent, and since 2000, Spain has spent 753,778 U.S dollars to create each “green job,” including subsidies of more than $1,319,783 per wind industry job.

Free Money to Select Corporate Titans: Government-run “cap and trade” is, by definition, a central economic planning scheme in which the government decides which industries and companies deserve more or fewer credits and what business factors and economic outputs are “necessary.” Small business and rural interests never had a seat at the table when discussions occurred on how to craft H.R. 2454.

Creates a Derivatives Market for Companies like AIG:
Companies like AIG and ENRON will be participating in a new derivatives market that is much more volatile than housing or natural gas. This new unregulated derivates market will be more perilous for companies like these than the traditional ones that got them into trouble in the first place. In addition, since the created artificial market contains no transparency, it is more likely to attract traders intent on imposing Ponzi schemes in the same spirit of Bernie Madoff and swindle thousands of Americans.

Devastates Rural America: According to the National Rural Electric Cooperative Association, the monthly residential electricity bills in 25 states will increase 15 to 28 percent for every $20/ton of carbon dioxide allowances. Rural households spend 58% more on fuel than urban residents as a percentage of their income. The Heritage foundation estimates farm income will drop by $50 billion by 2035.

Concedes to the Competition:
Currently, China accounts for 85% of global growth in coal each year and is the world’s largest annual emitter of greenhouse gases. China’s energy usage rose by 7.2% last year and they are building approximately two coal fired power plants per week to keep up with demand. Recently, at a U.N. conference, the Chinese government’s advisory panel on climate change asserted that the cap and tax targets were too low by stating. Given that, it is natural for China to have some increase in its emissions, so it is not possible for China in that context to accept a binding or compulsory target. In addition, India will not agree to any cap on their total energy production, and many believe India will double their coal-fired-capacity by 2030.

Discriminates Against Developing Nations: The bill creates a new program under USAID to provide U.S. foreign aid to developing countries for their efforts to adapt to climate change. Essentially, the bill is sending taxpayer funds to encourage third world nations to not develop carbon emitting energy sources – keeping them at a competitive disadvantage from developed nations for even more decades to come.

Establishes an Unrealistic Renewable Energy Standard (RES): “Cap and tax” does not take into account the fact that additional hydropower, nuclear and advanced fossil coal power plants cannot be deployed quickly enough to meet expected growth in electricity demand while also dramatically reducing greenhouse gas (GHG) emissions. Since renewable technology accounts for a small percentage of energy demand, consumers can expect not only higher rates, but more transmission problems during peak hours of demand. Additionally, the bill preempts at least 23 state renewable electricity standards.

Davis-Bacon: “Cap and tax” expands Davis-Bacon prevailing wage requirements to many provisions of the bill. This policy ahs been shown to increase public construction costs by anywhere from 5 to 38 percent above projected costs for the same project in the private sector.

Bloated Bureaucracy:
The bill establishes a myriad of new federal agencies intertwined between at least 21 established agencies with the mission of reallocating trillions of taxpayer dollars in a supposedly fair and efficient manor. According to the U.S Chamber of Commerce, the bill will impose 397 new federal regulations that require traditional agency rulemakings.

Countless Federal Mandates: The bill imposes over a thousand mandates and even mandates efficiency requirements on electric appliances like Jacuzzis.


Published in: on July 1, 2009 at 2:45 pm  Comments (6)  

Tuesday, June 16: Conference Report on H.R. 2346 – Supplemental Appropriations Act, 2009

The conference agreement appropriates $105.9 billion, 77% of which is for military-related costs in Iraq and Afghanistan. The total is 15% more than the president requested, $9 billion more than the House bill, and $14.6 billion more than the Senate version. The military funding in the agreement includes $25.8 billion to refurbish or replace equipment used in the two wars, 15% more than requested, including $2.7 billion, mostly unrequested, for C-17 and C-130 transport aircraft. It funds the president’s request for $3.6 billion to expand and improve Afghan security forces, and $400 million in FY 2009 for a program to build up the counterinsurgency capabilities of the Pakistani military, and an additional $700 million in FY 2010 and FY 2011.
The measure includes a Senate provision that would cost the Treasury about $5 billion to increase U.S. support of assistance provided by the International Monetary Fund (IMF) to stabilize countries hard hit by the global economic crisis, a provision strongly opposed by Republicans. The agreement does not contain a Senate provision that would have prohibited the release of photos showing abuse of detainees in U.S. custody, a provision opposed by most House Democrats. The measure does not provide funds for closing the prison at Guantanamo Bay, Cuba. It appropriates $7.7 billion to address a potential pandemic flu.


  • Excess Spending: H.R. 2346 includes more than $28.7 billion of non-war spending that is not offset with spending reductions elsewhere.  Overall, the legislation exceeds the President’s original request by $20.9 billion or 24.6%.  Non-war spending in the conference report includes: $5 billion for the IMF (to provide loan guarantees of $108 billion), $420 million for Mexico, $13.2 million for the Essential Air Service, $256 million to aid developing countries affected by the financial crisis, and $1 billion for the “cash for clunkers” program.
  • IMF Funding: The conference report appropriates $5 billion to make available $108 billion in loans to the IMF.  This “global bailout” will require the federal government to borrow money (from the Chinese, for example) to then lend it to the IMF.  The IMF has a large bureaucracy (2,600 employees), and some conservatives have expressed concerns that it is moving away from its purpose as the lender of last resort, and increasing its role as a development agency.  The conference report also authorizes the Secretary of the Treasury to agree to the sale of nearly 13 million ounces of IMF gold to in effect create an endowment for itself—which would make the institution less accountable to the U.S. and other member nations.
  • Funding for West Bank and Gaza: The legislation provides a total of $660 million for the West Bank and Gaza. There is concern that this money could fall into the hands of Hamas, since it controls much of the civil society in Gaza.
  • Release of Detainee Photos: The conference report does not include language in the Senate-passed bill (the Lieberman/Graham Amendment) to prevent the release of detainee photos.


Published in: on June 17, 2009 at 1:28 pm  Comments (2)  

Wednesday, June 10: .R. 2410 – Foreign Relations Authorization Act, Fiscal Years 2010 and 2011

This bill authorizes appropriations for the State Department, the Peace Corps, international activities, international assistance programs, and related agencies.
Possible Concerns:
Pay Raise:
Provides a 23% increase in pay to overseas Foreign Service Officers when Americans are struggling to keep jobs at home
Abortion Advocacy:
Creates an Office for Global Women’s Issues to “coordinate efforts of the United States Government regarding gender integration and women’s empowerment in the United States foreign policy.” It is highly likely that this office will include in its mission the advancement of abortion advocacy abroad
Sexual Orientation Language:
Would require the tracking of discrimination related to sexual orientation in foreign countries based on “actual or perceived sexual orientation and gender identity.”  The bill would also require U.S. diplomatic representatives to encourage foreign governments to reform or repeal laws that criminalize “homosexuality or consensual homosexual conduct, or restricting the enjoyment of fundamental freedoms.”  The language places sexual orientation as a foreign policy priority and focuses on a class of particular individuals rather than crimes committed against any individual.
No UN Reform:
Increases US contributions to the UN by approximately 32% over FY09 levels without requiring any reforms.
Cost to Taxpayers:
The bill authorizes approximately $41 billion in the FY2010 and FY2011 period.  It authorizes approximately $1 billion for FY2012 through FY2014, for a total of approximately $42 billion over a five year period.

PASSED 235-187

Published in: on June 10, 2009 at 9:23 pm  Comments (1)  

Tuesday, June 9: H.R. 2751—The Consumer Assistance to Recycle and Save Act

Also referred to as “Cash for Clunkers,” H.R. 2751 would establish a new one-year program at the National Highway Traffic Safety Administration under the Department of Transportation (DOT), that will give individuals with older, less fuel efficient cars to a credit worth up to $4,500 towards the purchase of a new car that meets certain fuel efficiency goals.  In order to qualify, so-called clunkers must get 18 miles per gallon or less, be manufactured after 1984, be in drivable condition, and be continuously insured to the same owner for at least one year immediately prior to trade-in.
In order to qualify for the voucher, the value of a new car cannot exceed $45,000.  The legislation divides new cars and trucks into four categories:
·         Cars: If a consumer purchases a new car that gets at least 4 miles per gallon more, they qualify for a $3,500 voucher to reduce the price of the new car.  To receive a voucher for $4,500, the new car must have a mileage rating at least 10 mpg higher.  No new car purchased can get less than 22 miles per gallon (mpg)
·         Light-duty trucks and SUV’s: For owners of light-duty trucks or Sports Utility Vehicles (SUV), to receive a voucher of $3,500 a consumer must purchase a new vehicle rated at least 2 mpg higher and to receive a voucher of $4,500, the new vehicle must get at least 5 mpg more.  The minimum fuel economy for a light-duty truck or SUV must be at least 18 mpg.
·         Large light-duty trucks: For owners of large light-duty trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds), to receive a voucher of $3,500, a consumer must purchase a new truck that gets at least 1 mpg higher.  To receive a voucher of $4,500, the new vehicle must get at least 2 mpg more.  The minimum fuel economy for a large light-duty truck is at least 15 mpg.
·         Work trucks: Owners of “work trucks” (8,500 and 10,000 pounds) can receive a $3,500 voucher for trade-ins of models built before 2002 in the same or lower weight class.  Since the EPA does not issue mileage measures for these trucks, supporters of the bill reason that “newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality.”
·         Another Costly Auto Bailout: The bill authorizes $4 billion of new spending, subject to appropriation.   This is on top of the $85 billion American taxpayers have provided to help “restructure” the auto industry. Just today, the auto-parts suppliers plan to ask President Obama’s auto task force for an additional $8 to $10 billion in federal aid. In addition, a similar program instituted in Germany ended up costing three times more than originally anticipated.
·         Little Environmental Benefit: H.R. 2751 will most likely not have the anticipated environmental benefits because additional fuel efficiency often leads to more driving and new cars will have little impact on a reduction of overall carbon dioxide emissions, according the Competitive Enterprise Institute.
·         Weakens Charitable Giving: Many are concerned that an unintended consequence of the bill is that it will make Americans less likely to donate older automobiles to charities that provide low-income and disabled individuals with affordable automobiles.
·         May Disproportionally Help Foreign Auto Companies: With the high fuel efficiency requirements to qualify for the full credit, the bill may actually help foreign auto manufactures, whose fleets typically have smaller, more fuel efficient cars than GM or Chrysler have produced.
·         Higher Priced Used Cars: The legislation requires dealers to remove “clunkers” from the market through salvage, reducing the amount of pre-owned supply.  Families that still cannot afford a new automobile, even with the voucher, will face rising prices in the used car market during the current recession when affordability is an even greater issue.
·         Bureaucratic Leeway: Under the bill, the DOT is required to promulgate many of the regulations to implement the program within 30 days. Many are concerned that this grants too much authority to the executive branch to enact a new $4 billion dollar program.

PASSED: 298-119-2

Published in: on June 9, 2009 at 4:33 pm  Comments (2)  

Wednesday, May 13: H.R. 2187—21st Century Green High-Performing Public School Facilities Act

H.R. 2187 would authorize the U.S. Secretary of Education to make grants to state educational agencies for the modernization, renovation, or repair of public school facilities.
Some conservatives, including Education and Labor Committee Ranking Member and RSC Member Buck McKeon (R-CA), have expressed various concerns about the legislation.  On May 6, 2009, he released the following statement:
“It costs too much.  It borrows too much.  It controls too much.  And it’s an area that, as federal legislators, we should not be intruding upon…If passed, this bill could divert funding from the Title I program for disadvantaged students.  It also could take money away from the Individuals with Disabilities Education Act, or IDEA.”
The Committee press release states the following concerns with the bill and can be found here:
  • Nationalizes and regulates school construction;
  • Threatens state, local, and private support for educational infrastructure;
  • Jeopardizes Congress’ ability to reduce federal spending, pushing the country further into debt;
  • Increases project costs through imposition of Depression-era Davis-Bacon wage mandates;
  • Siphons resources from longstanding education priorities and fails to improve academic achievement.

PASSED 275-155

Published in: on May 13, 2009 at 3:31 pm  Leave a Comment  

H.R. 1913 — Local Law Enforcement Hate Crimes Prevention Act of 2009

H.R. 1913 would make certain “hate crimes” new federal offenses – including crimes motivated by “sexual orientation and gender identity” (not defined in the bill). The bill would also create two new federal grant programs to assist state and local governments in investigating and prosecuting hate crimes, and require expanded data collection and reporting for hate crimes, among other provisions.

Possible Concerns:

The bill in unconstitutional: H.R. 1913 misinterprets the Commerce Clause and the 13th (slavery), 14th (due process) and 15th (freedom to vote) Amendments to justify an unprecedented expansion of federal authority.

Massive superseding of state laws: Most States and the District of Columbia already have hate crimes statutes.

Threatens First Amendment rights: Religious leaders or members of religious groups may be prosecuted criminally based on their speech or other protected activity. Thus, if an individual (such as a pastor or rabbi) denounced the act of homosexuality as a sin to a group of people, and one of those people committed a violent crime against a homosexual, it is plausible that the pastor or rabbi could be charged with inciting violence or as an accessory to the crime.

Expands hate crimes: Crimes committed because of “prejudice based on the actual or perceived race, color, religion, national origin, gender, sexual orientation, gender identity, or disability of the victim or is a violation of the state, local, or tribal hate crime laws” [emphasis added] would be covered by this legislation. The terms “sexual orientation,” “perceived,” and “disability” are not defined in the bill, and the bill vaguely defines “gender identity,” thus leaving the definitions open to wide interpretation by bureaucrats, attorneys, and judges.

Erodes equal justice under the law: Violent crimes deemed motivated by the specific type of hatred defined in this bill would merit additional federal penalties and more federal involvement and resources in investigating and prosecuting these crimes. Two identical violent crimes of murder – one a “random” act of violence and another “hate- motivated” act of violence – will be provided unequal treatment and unequal punishment.

PASSED 249-175

Published in: on April 29, 2009 at 9:00 pm  Comments (3)  

S.Con.Res. 13—FY 2010 Budget Resolution CONFERENCE REPORT

Compared to the House-passed budget resolution, the conference report includes some difference with regard to budget process provisions, reserve funds, and differences with regard to the levels of proposed tax collections, spending, and deficits.  However, as with the House-passed budget resolution, the conference report assumes a massive tax increase ($423 billion compared to $574 billion in the House-passed budget resolution), proposes the six largest deficits in U.S. history, and includes reconciliation instructions for liberal priorities.

Proposed Revenues, Spending, and Deficits: The Democrat budget resolution proposes the six largest nominal deficits in U.S. history.  The lowest deficit proposed by the budget resolution—the $523 billion deficit in FY 2014—is $64 billion or 13.9% greater than the highest deficit in U.S. history (last year’s $459 billion deficit).   Below is the proposed revenue, spending, and the consequent deficits by year.

Tax Increases: S.Con.Res. 13 proposes total tax collections equal to $14.2 trillion over five years.  Compared to a baseline that assumes the extension of the 2001 and 2003 tax cuts and the “AMT patch,” the budget resolution assumes a five-year tax increase of $423 billion.  The Democrat budget resolution assumes that much of this tax relief will expire.

Discretionary Spending Level: The budget resolution sets a 302(a) discretionary spending allocation equal of $1.083 trillion for FY 2010 regular appropriations (excluding emergency spending), a 7.2% increase compared to FY 2010.

Policies Not Included in Budget Resolution:

“Making Work Pay” Tax Credit: The resolution’s revenue numbers assumes that it will not be allowed to continue (as per the President’s budget), but will instead expire at the end of 2010.

Troubled Asset Relief Program (TARP):  Unlike the President’s budget, which requests $247 billion for additional financial bailouts, the budget resolution assumes no additional funding for this program.

Federal Debt: Over five years, the budget resolution would increase the debt to $17.0 trillion—an increase of $5.2 trillion compared to the level on January 20, 2009.

Possible Conservative Concerns:

Reconciliation Instructions to “Fast Track” Liberal Priorities: The budget resolution would allow reconciliation (as long as a deficit target of $1 billion is met) for legislation under the jurisdiction of the Education and Labor Committee, the Energy and Commerce Committee, and the Ways and Means Committee.  The Majority will say that this is intended for health care reform and education reform.   However, any legislation that meets this deficit target that falls under one of these committees (such as “cap and tax”) would be eligible for reconciliation protection.

Unprecedented Borrowing: The budget resolution would increase the national debt to $17.0 trillion in five years, an increase of $5.2 trillion or 48% since January 20, 2009.  But this increase is actually understated in two respects since the Democrat budget resolution hides what its policies would lead to over the full ten-year budget window.  The budget resolution proposes what would be the six largest deficits in U.S. history.

Historic Spending Levels: The Democrat budget resolution proposes federal spending equal to 27.6% of GDP in 2009 and 24.8% of GDP in 2010.  These are the highest spending levels in U.S. history, except for World War II.

Higher Taxes: The Democrat budget resolution increases taxes by $423 billion over five years.

PASSED 233-193

Published in: on April 29, 2009 at 3:38 pm  Leave a Comment