Despite New Majority in Congress, Fiscal Policy Still Mostly Stuck in Neutral

A new congressional majority in 2007 promised a clean break from past practices of a Congress noted for its corruption, dysfunction and profligacy. It moved on a modest agenda and successfully enacted a few important policies, but overall, it failed to chart a new direction in fiscal policy. This failure was due in large part to the majority underestimating the ability and willingness of a coalition of conservative policymakers and the president to fiercely obstruct even the modest reform policies on the new Congress's agenda.

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Nussle Approved as Budget Head, Faces Task of Completing FY 2008 Budget

In the Senate's first vote following the August recess, former Rep. Jim Nussle (R-IA) was confirmed as director of the Office and Management and Budget (OMB), 69-24, with all Republican senators voting in favor of Nussle and the Democrats split down the middle. Notably, Senate Majority Leader Harry Reid (D-NV), Appropriations Committee Chair Robert Byrd (D-WV), and Senate Budget Committee Chair Kent Conrad (D-ND) voted against the nominee. Nussle's approval sets up what is expected to be a bitter struggle to complete work on the FY 2008 budget during the fall.

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The Year in Fiscal Policy...So Far

After the elections in November 2006, with a new majority and low public confidence in Congress following multiple lobbying and ethics scandals, members vowed to restore integrity and responsibility to the legislative process, particularly in fiscal policy. Congress pledged it would prioritize funding for domestic needs and abide by pay-as-you-go rules for new mandatory spending and taxes. It would shed light on the earmarking process and spend more time minding the people's business in Washington. In short, the new Congress said it would clean up Washington and rebuild public confidence in government.

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Senate Committees OK Nussle

On July 31 and Aug. 2, the Senate Homeland Security and Governmental Affairs and Budget Committees approved the nomination of former Rep. Jim Nussle (R-IA) to serve as Office of Management and Budget (OMB) Director, by votes of 16-0 and 22-1, respectively. Senate Majority Leader Harry Reid (D-NV) has scheduled a floor vote on the nomination for Sept. 4.

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Questions, Concerns Surround Start of Nussle Confirmation Hearings

On June 19, Office of Management and Budget (OMB) Director Rob Portman announced his resignation, effective in August. The same day, President Bush nominated former House Budget Committee chairman Jim Nussle (R-IA) to be the next OMB director. Today, July 24, the Senate Homeland Security and Governmental Affairs Committee (HSGAC) held the first confirmation hearing for Nussle; on July 26, the Senate Budget Committee, which also has jurisdiction over the nomination, will hold its own hearings.

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OMB Releases Flawed Mid-Session Budget Review

On July 11, the Office of Management and Budget (OMB) released its annual Mid-Session Review, which contains updated estimates of the budget deficit, receipts, outlays and budget authority for fiscal years 2007 through 2012. While the administration trumpeted the decrease in the projected deficit, several aspects of the review cast doubt on the accuracy of these claims. In addition, the projections for years 2008-2012 were less noted and far more sobering.

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Portman Out, Nussle Tapped to Head OMB

On June 19, Office of Management and Budget (OMB) Director Rob Portman announced his resignation, effective in August. President Bush has chosen former House Budget Committee chairman Jim Nussle to be the next OMB director — a candidate whose reputation and policy record suggest the White House is prepared to clash with Democrats in Congress, particularly over the FY 2008 budget.

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House Battle over Earmarks Procedure Resolved

A fiercely partisan impasse in the House was resolved on June 14 when Appropriations Chair David Obey (D-WI) and Minority Leader John Boehner (R-OH) reached a comprehensive procedural agreement following months of confusion and vituperation over the chamber's earmarks disclosure and approval process. The agreement outlines rules for consideration of earmarks for the House to follow for each of the 12 FY 2008 appropriations bills and appears to be operating smoothly thus far: on June 21, the House Appropriations Committee approved the lists of earmarks for two spending bills by voice votes.

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Congress Still Struggling to Settle Earmark Disclosure Procedures

Five months after the House adopted institutional earmark reform rules (H. Res. 6) and the Senate passed statutory requirements governing earmark disclosure (S. 1), confusion reigns in both chambers on how earmark disclosure rules will work and who will administer them. Key members of the Senate and House Appropriations Committees have unilaterally altered the rules in the intervening months, and even with appropriations season upon us, it appears the disclosure rules and their application remain in flux.

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Congress Approves Budget Resolution

On May 17, Congress achieved a basic benchmark of responsible fiscal governance — passing a final budget resolution. While this accomplishment has become somewhat of a rare event in Washington (spending in three of the past five fiscal years has not been guided by a budget resolution), and the votes were close (Senate 52-40, House 214-209), Democrats were able to reach final compromises on a few contentious issues.

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