The Analytical Perspectives portion of President Bush's proposed budget includes a section that outlines seven budget process reform proposals. Six of them are updated versions of proposals from previous years, while one is new, covering earmark reform.

The Senate on Jan. 18 passed a comprehensive lobbying and ethics reform bill — S. 1, the Legislative Transparency and Accountability Act of 2007 — that included an overhauled earmark disclosure rule. After nearly two weeks of floor debate featuring reversals, stalemates, and a brief filibuster, the Senate voted 96-2 to pass the bill, widening the definition of earmarks and increasing their public disclosure requirements. S. 1 must be passed by the House and signed by the president before any of it, including the Senate rules changes, can take effect.

On Jan. 5, the House took a significant step in the direction of fiscal responsibility, adopting pay-as-you-go (PAYGO) budget rules by a 280-152 margin. PAYGO rules bar consideration of legislation including tax cuts or entitlement expansions that would have the net effect of increasing the deficit. While a necessary step toward putting the country back on the right fiscal path, PAYGO rules may make fulfilling the policy goals of the new Democratic Congress significantly more difficult to achieve.

The congressional lame duck session resumed Dec. 5 as the 109th Congress returned to work on a set of long-deferred tax and budget items. However, Congress will likely postpone action on the bulk of these issues until the next session and quickly pass a continuing resolution (CR) that will last until early 2007. The Budget