The Budget Resolution adopted yesterday by the Senate Budget Committee was a case of half-full/half-empty, depending on your policy perspective. It directs additional resources toward domestic social programs and keeps defense and homeland security spending on track with Bush's proposed levels, raising the discretionary spending cap by a (modest, we think) $18 billion out of $948.8 billion. Still, President Bush has repeatedly promised in the past to veto a resolution that exceeds his proposed cap by any amount. The resolution restores the Senate PAYGO rule and adds a 60-vote point of order against entitlement or tax legislation that would increase the budget deficit, until the president proposes and Congress approves legislation to restore solvency to the Social Security trust funds. The half-empty view stems from the revenue projections the resolution relies upon to get to a $132 billion budget surplus by FY 2012 -- most of it focused on the resolution's use of reserve funds." These are optional provisions that allow spending or revenue totals and committee allocations to be adjusted to accommodate specific new spending programs, provided they are "deficit-neutral," with costs offset via unspecified spending cuts or revenue increases. By their nature, reserve funds they are optional and their offsets are unspecified. But since they identify specific spending priorities and amounts, they have the look-and-feel, if not quite not the status of reconciliation instructions. This resolution comes with 22 such funds, more than twice the all-time previous record. This may explain comments such as:

• "This budget puts a burden on the Finance Committee to come up with $916 billion" -- Finance Committee ranking member Charles Grassley (R-IA)
• "[Finance Committee ranking member Judd] Gregg (R-NH) argued that [it] ensures that most of the tax cuts that will expire by 2010 will not be extended. He said that would amount to $900 billion in tax increases in the future."

The debate will proceed in Congress along the following (tenative) schedule:

• March 16: Senate Budget Committee files report on FY08 BR
• March 20: Senate Floor action on FY08 BR
• March 20 or 21: House Budget Committee mark-up of FY08 BR
• March 23: Senate floor vote on the FY08 BRFY
• Week of March 26: House Floor debate on FY 2008 Budget Resolution