Today the House Budget Committee passed a $53.9 billion reconciliation bill to cut spending. The Committee approved the bill 21-16, and it will most likely go to the floor next week. The House approved a bill even though it contains a provision - long favored by conservatives - to split in half the 9th U.S. Circuit Court of Appeals based in San Francisco, CA.

During an event entitled "The Future America Can't Afford" last Monday, U.S. Comptroller General David Walker continued his harsh criticism of Congress' poor stewardship of the government's fiscal health. The event was sponsored by the Brookings Institution, the Heritage Foundation, and the National Press Foundation. Walker opened the event by urging Congress to reconsider the extension of the 2001 and 2003 tax cuts in light of the current fiscal environment. "We can’t afford to make all the tax cuts permanent,” Walker said. He also supported the reinstatement of true pay-as-you-go (PAYGO) rules and an automatic disclosure of the long-term costs of proposed spending and tax legislation in order to ensure an honest and transparent debate in Congress. These are both excellent ideas and should have been in place long ago in Congress. Luckily for the Senate, they will have the opportunity to enact those very budget control measures this week as Senate Budget Committee Ranking Member Kent Conrad (D-ND) has offered an amendment to the budget reconciliation that would reinstitute true PAYGO rules. These rules were rejected by the narrowest of margins this past March when Senator Russ Feingold (D-WI) offered them as an amendment to the original budget resolution agreement.

More the a dozen Republican members of the moderate "Tuesday Group" met last night with Ways and Means Committee Chairman Bill Thomas (R-CA), who was attempting to assuage their concerns about the upcoming reconciliation bill that will enact a new round of tax cuts. Some Republican aides and many moderate Republicans in the House have continued to question both the policy of cutting taxes with the ongoing budget pressures of war and Hurricane Katrina, and the politics of doing so while simultaneously cutting funding for programs supporting poor Americans. The House Republican caucus is holding a special 4-hour retreat this afternoon to discuss tensions between moderates and radical members of the Republican Study Committee - who are pushing for much more drastic spending cuts than was originally agreed to in the budget resolution earlier this year. As GOP leaders in the House continue to attempt to hold their caucus together, the White House has issued a veto threat to the compromise package developed by the Senate Finance Committee for their budget reconciliation bill. Senior administration aides have stated they will urge the President to veto the budget bill if it eliminates a regional "stabilization" fund that provides incentives for private health plans to offer Medicare prescription drug benefits in rural areas. The Senate Finance Committee eliminated the so-called slush fund in order to distributing the required $10 billion in cuts over both Medicare and Medicaid. Finance Committee Chairman Grassley said it was the only way to win the necessary approval from all the committee Republicans. In both the House and the Senate, the obstacles continue to pile up in front of the reconciliation bills this year.

Federal Budget

• Service Cuts for the Poor to Finance Tax Cuts for the Rich
• Congress' Reconciliation Work Crowds Out Appropriations
• Congress Remains Out of Step With Public in Hurricane Relief Efforts