‘Line’ Items: New Fiscal Year Edition

New Year, Old Story – Saturday was the first day of Fiscal Year 2012. CRFB rang out the old fiscal year with a look back at the relevant numbers, and they weren’t pretty. The new year is a time for renewal and resolutions to improve. However, it looks as if Congress is resolved to continuing along the path of budget dysfunction. Fittingly, the House will vote on a continuing resolution (CR) Tuesday that will temporarily fund federal government operations until November 18. Last week the House had to convene a special session during its recess to approve of a very short-term CR (expiring Tuesday) that prevented a government shutdown when the fiscal year ended Friday. Beginning the new fiscal year with two CRs does not bode well for budget sanity. In fact, the second CR will set up mid-November to be a rather crazy time for fiscal policy as the Super Committee is required to vote on its recommendations to reduce the deficit by November 23.

Super Committee Asked About Budget Process Reform – The congressional Super Committee is tasked with providing recommendations to reduce the deficit, yet several lawmakers believe that making changes to the budget process will be essential to reducing the deficit, and have asked the Committee to recommend such changes. Last week senators Jeanne Shaheen (D-NH) and Johnny Isakson (R-GA) wrote to the Super Committee asking it to consider their legislation that would replace the annual budget process with a biennial one, arguing that it would improve oversight of federal spending. The previous week, a bipartisan group of senators including John McCain (R-AZ) and Mark Udall (D-CO) sent their own letter to the Committee asking it to consider their bill to give the president expedited rescission authority to remove specific spending items from legislation. Budget process reform is becoming a popular topic in Washington. The Senate Budget Committee will hold a hearing on Tuesday, appropriately the same day the House will vote on another continuing resolution to fund the government since Congress has been unable to approve a budget, yet again. CRFB President Maya MacGuineas will testify at the hearing along with other experts. The Peterson-Pew Commission on Budget Reform, a project of CRFB, recommended a suite of reforms to the budget process in the report, Getting Back in the Black.

Business Groups Say “Go Big” – On Thursday, 155 business groups, including the Business Roundtable and U.S. Chamber of Commerce, sent a letter to the Super Committee, asking that it go beyond its legislative mandate of recommending deficit savings of $1.5 trillion over ten years. The groups say, “We believe that putting in place a multi-year growth and deficit reduction strategy that reforms entitlements, implements comprehensive tax reform, and stabilizes the debt as a share of the economy is critical in creating the stability the business community needs, growing the economy, and restoring Americans' faith in the political system.” The business groups join many policymakers, former lawmakers and thought leaders in calling for the Super Committee to ‘Go Big.’

Omnibus Starting Up – Congress has about given up on passing the 12 annual spending bills this year and is looking at rolling them up into omnibus legislation. But an omnibus won’t necessarily have a smooth ride. Spending levels and policy riders, such as attempts to deny funding for the 2010 health care reform law until legal challenges are resolved, could complicate the trip. Don’t be surprised to see another CR in November.

Key Upcoming Dates

October 4

• Current continuing resolution (CR) funding the federal government expires.
• Senate Budget Committee hearing on improving the budget process at 9:30 am.
• Joint Economic Committee hearing on the economic outlook with Federal Reserve Chair Ben Bernanke at 10 am.
• House Judiciary Committee hearing on "A Balanced Budget Amendment to the U.S. Constitution" at 10 am.

October 5

• Economic Policy Subcommittee of the Senate Banking, Housing and Urban Affairs Committee hearing on "Perspectives on the Economic Implications of the Federal Budget Deficit" at 10 am.

October 6

• Senate Finance Committee hearing on tax reform options involving home ownership at 10 am.

October 11

• GOP presidential debate in New Hampshire.

October 14

• Congressional committees must submit any recommendations to the Super Committee by this date.

October 18

• GOP presidential debate in Nevada.

November 18

• Continuing resolution (CR) expected to pass this week to fund federal government operations expires.

November 23

• The Super Committee is required to vote on a report and legislative language recommending deficit reduction policies by this date.

December 2

• The Super Committee report and legislative language must be transmitted to the President and Congressional leaders by this date.

December 9

• Any Congressional committee that gets a referral of the Super Committee bill must report the bill out with any recommendation, but no amendments, by this date.

December 23

• Congress must vote on the bill recommended by the Super Committee by this date. No amendments are allowed.