SPECIAL EDITION: "Inside (The Beltway) Scoop" from Jon Retzlaff, Legislative Director

FY2008 Appropriations Status Update

Congress had hoped to use the first two weeks in December to finalize 11 of the 12 FY2008 Appropriations bills that have not yet been signed into law.  Well, let's just say that it has not gone as Democrats had hoped or planned.  Negotiations are proceeding, and it appears that the sides are closer than they've ever been to agreeing on a final package.  However, and unfortunately, the Democrats have had to practically give in to every demand from President Bush, which does not bode well for any of the agencies that we advocate for, at least in regards to their FY2008 funding levels.  The lone exception is the medical research conducted and supported by the Department of Veterans Affairs, which is widely expected to receive a significant increase.

Congress has agreed to extend the continuing resolution another week (until December 21, 2007) in order to allow House and Senate leaders another week to put the final touches on the massive omnibus package and adjourn for the year.

While most of you have heard of the similarities between sausage making and law making, I thought you might find it interesting how the plans to resolve the FY2008 appropriations bills have evolved during the past few weeks.  Therefore, here's a review of the past two weeks, including a list of the numerous plans that have been proposed to finalize the FY2008 appropriations bills, as well as my prediction on how things might end: 

Week of December 3, 2007

Plan #1:  During the first week back from its Thanksgiving break, Democrats believed that they had come up with a plan to end the impasse with President Bush over the eleven remaining domestic discretionary spending bills.  Democratic leaders decided to compile an omnibus bill that would include the eleven appropriations bills and other legislative proposals.  Their proposal exceeded the President's FY2008 budget request for the eleven appropriations measures by $11 billion (which was half of what Democrats had initially proposed during the summer and early fall), included $7 billion in emergency spending for border security, low-income heating assistance and drought relief and provided the President with a down-payment of $70 billion with no-strings attached (from his initial request of $196 billion) for the wars in Afghanistan and Iraq.  However, at the end of the week, the President rejected the proposal because of the Democrats plan to exceed his budget request.

Week of December 10, 2007

Plan #2:  When the White House rejected the Democrats grand plan #1, House Appropriations Chairman Obey announced that he would direct his staff to reduce the eleven appropriations bills by $11 billion (to match the President's budget request of $933 billion in total overall domestic discretionary spending), eliminate all congressional earmarks and not provide any money for the wars.  Chairman Obey had reached his wits ends and believed that voters in next year's elections would blame Republicans for the inadequate investments.

Plan #3:  However, Senate leaders adamantly opposed Chairman Obey's plan, especially because it would eliminate all congressional earmarks.  In response, Senate Republican Minority Leader Mitch McConnell (R-KY) countered and proposed to retain congressional earmarks by imposing a 2.5 percent across-the-board cut for all non-defense programs in order to eliminate $11 billion to match the President's FY2008 budget request ceiling of $933 billion for domestic discretionary programs.  Senator McConnell also added $70 billion for the wars in Afghanistan and Iraq.  However, Democrats objected to Mr. McConnell's plan because of the across-the-board cuts.  In addition, House Democrats weren't as sympathetic to retaining congressional earmarks.

Plan #4:  Therefore, the House decided to take the lead again in crafting the final package after House and Senate Democratic leaders agreed on a plan that they believe will be acceptable to the White House.  The proposal limits FY2008 spending to President Bush's $933 budget request plus $3.7 billion for the Department of Veteran's Affairs.  It includes money for the wars without restrictions and provides emergency spending for border security, drought relief and other areas.  According to House Speaker Nancy Pelosi (D-CA), the proposal funds many Democratic priorities, including medical research (however, we don't know what this exactly means or how her statement will be translated into dollars) and education at the expense of President Bush's priorities.  In addition, earmarks remain, but would be reduced somewhat.  

Prediction on How This Madness Will End:

At this point, the White House is withholding comment on the latest Democratic proposal until they see the actual bill and language, which is not expected to be made available until over the weekend.  Appropriations staffers will be working through the weekend to finalize the package.  I’m assuming that President Bush is going to insist on additional changes, such as increasing spending for his priorities and requesting that some of the funding designated as emergency spending be eliminated.  We hope that there will be increases for NIH (since Ms. Pelosi cited medical research as a Democratic priority), as well as increases for NSF and DOE's Office of Science (since it has been a priority for both Congress and the Administration).  However, with $22 billion having been eliminated from bills initially drafted by Congress, it doesn't seem very likely that the agencies we support will receive increases anywhere close to what we regard as necessary and essential. 

In fact, it still remains entirely possible that the entire package will fall apart; forcing Congress to adopt a year-long continuing resolution (CR), which many believe is what the Administration has been interested in from the beginning.  Of course, a year-long CR would result in all agencies budgets being flat-funded at their FY2007 levels.

I will update you on what happens next week.