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  

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