Congress' Spending Slump

The month of August is seen as an important time in every Congress because the weeks-long recess breaks up the legislative calendar. As the number of legislative days dwindles, Congress is faced with a slew of spending bills, including a war supplemental bill, a small business jobs bill, and a slow-starting appropriations process. The sheer amount of spending bills that remain on the docket, and the tardiness of these bills, nearly guarantee at least one continuing resolution in the fall.

At the top of Congress' priority list is the war supplemental bill. Both the House and Senate have passed a version of the bill, which provides additional funds to the wars in Iraq and Afghanistan. The House version, passed July 1, is significantly larger; in addition to $59 billion in war spending, it includes $20 billion in assorted other measures, such as $10 billion to prevent teacher layoffs and funding for Pell Grants. On July 22, the Senate rejected the House version and sent back a slimmed-down bill with only the $59 billion in war spending.

In June, Defense Secretary Robert Gates warned that the Defense Department would have to start making "stupid" budget cuts if the bill was not passed before July 4. Now, almost a month later, it is up to the House to decide if it should pass the Senate version as-is, sending the bill to the president to sign, or delay the bill even longer for the chance to include much-needed domestic spending on a must-pass piece of legislation. While it remains to be seen how the House reacts to the Senate bill, the Pentagon is "seriously planning" as if Congress will not pass the bill before the August recess.

As the House debates how to handle the war supplemental, the Senate is dealing with another long-delayed bill, a small business jobs bill passed by the House in June. The legislation, which has been on and off the docket for the past several months, contains $12 billion in tax expenditures and a $30 billion loan program. The loan program is proving to be controversial, with Republican members of the Senate comparing it to the unpopular financial bailout bill, the Troubled Asset Relief Program (TARP). While the lending program survived a cloture vote on July 22, Democratic leaders may still have to drop it in an effort to pass the bill, leaving only the tax cuts, which would necessitate another trip to the House for approval. A vote on the bill has been tentatively scheduled for later in the week of July 26.

Both houses are finding it difficult to pass their yearly appropriations bills on time, an indication of how badly split Congress is, at least when it comes to major spending decisions. Only six appropriations bills have been approved by the full appropriations committees, one in the House and five in the Senate, when in an average year, most, if not all, bills are out of committee by August. The full House usually votes on a great deal of them before leaving town for the August recess. The cause for this delay has been the lack of a budget resolution, which reflects a broader rift within the Democratic Party over appropriate spending levels and the looming deficit. Since neither house could pass a resolution, the appropriations subcommittees were forced to wait for spending guidelines, which both the House and Senate passed in mid-July.

In what could be a problem in the coming months, the House's allocations are $7 billion higher than the Senate's, largely due to a larger Labor-Health and Human Services-Education appropriations bill. Usually, when Congress passes a budget resolution, the two chambers agree on spending limits, which results in somewhat similar appropriations bills. Without a resolution, the House and Senate may now find it difficult to agree on a final level for the Labor bill. Both houses, though, set spending guidelines lower than the president's budget request from February.

While the small business bill and the war supplemental could be finalized before the recess begins, the appropriations cycle will continue for months to come. With little chance of Congress passing all twelve bills by October 1, Congress will almost certainly be forced to pass a series of continuing resolutions to fund the government. It may also face the prospect of completing the annual appropriations process during a post-election, lame-duck session.

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