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House Panel Wants Fast-Track Approach For Obama Priorities

By David Clarke, CQ Staff

March 25, 2009 -- The House is taking a more aggressive approach than the Senate to implementing President Obama's proposals for overhauling the health care system and federal student aid programs.

The House Budget Committee was marking up a fiscal 2010 draft budget resolution Wednesday that includes reconciliation instructions to allow legislation implementing these policies to move later in the year.

The Senate Budget Committee, which was to begin a markup of its own budget resolution later in the day, does not intend to include similar provisions in its version.

The issue of reconciliation has become a flashpoint in this year's budget debate. Senate Republicans view the use of the fast-track procedure as highly partisan because it would greatly diminish their ability to influence major pieces of legislation by taking the threat of a filibuster off the table.

Whether to include reconciliation provisions in the final budget resolution will almost certainly be the biggest issue for House and Senate negotiators when they hammer out a conference agreement next month.

Both Senate Budget Committee Chairman Kent Conrad, D-N.D., and Senate Finance Chairman Max Baucus, D-Mont., do not want reconciliation instructions on health care, because it would inflame partisan tensions and they believe the process should only be used for deficit reduction.

"We want health care reform to be sustainable, and that means getting a significant number of Republicans on board," Baucus said. "If they are on board it is sustainable. Otherwise it's partisan, it's less sustainable, we're back in the soup again, we're fighting. Americans don't want that."

But Conrad and Baucus will be challenged hard on this point by House Democrats, and possibly the White House, who do not want to see a key part of the president's agenda die or be watered down because of objections from Senate Republicans who have the votes to filibuster a bill moved through the regular legislative process.

Obama was meeting with Democrats on Capitol Hill Wednesday to discuss the budget.

Using reconciliation for education programs may be less problematic since the administration's proposals on this front are more budget-related than a sweeping overhaul of the health care system.

The president has proposed eliminating subsidies to private lenders that now participate in the Federal Family Education Loan program, making the government the originator of all federally backed student loans. Obama wants to make Pell grants mandatory spending, which would remove them from the uncertainty of the annual appropriations process. He also wants to increase the maximum grant to $5,550 and index grants to account for inflation—all at a cost of $116.8 billion over the next 10 years.

Details Left to Other Committees
The budget resolution sets the stage for the reconciliation process by instructing specific committees to achieve a net change to the deficit, which can be achieved through policies affecting tax and mandatory spending programs. It instructs the committees to report legislation meeting these targets by a certain date. The authorizing committees can produce legislation implementing almost any policy so long as it meets the deficit target laid out in the budget resolution.

For instance the House Budget resolution instructs both the House Energy and Commerce and Ways and Means committees to report legislation by Sept. 29 that would reduce the deficit by $1 billion over six years. These committees would write the health care legislation.

The Education and Labor Committee is instructed to report a bill by Sept. 30 that also would reduce the deficit by $1 billion over six years for the purpose of making changes to education programs.

While the House budget notes that the reconciliation instructions are intended for health care and education legislation, they could be used to advance legislation addressing any issue under the committees' jurisdiction. The instruction does not specify what policies should be pursued—only that whatever is produced should meet the deficit target laid out in the budget resolution.

Altering Obama's Totals
The House Budget Committee resolution would provide less in spending and more in tax revenue than President Obama's proposed in effort to hold down rapidly rising deficits that worry Democratic moderates.

The House blueprint would provide $1.089 trillion in non-emergency discretionary spending in fiscal 2010, which would be slightly less than the $1.096 requested by the president. The Senate Budget version would allow about $1.08 trillion in non-emergency discretionary funding in fiscal 2010. Both the House and Senate match the president's request for defense spending, so trims would come from his domestic program requests.

The House budget also assumes that over five years its plan will raise $14.3 trillion in tax revenue, compared with $14.1 trillion in Obama's proposal. The House plan assumes that some revenue will be raised over that period by allowing the Alternative Minimum Tax to hit millions more households or, if not, that other tax increases or spending cuts will be enacted to make up for the shortfall.

Because of these changes the House plan shows deficits falling faster and further than in the president's budget. The Congressional Budget Office projects the deficit for this fiscal year will total $1.7 trillion. Under the House plan the deficit would drop to $585.5 billion in fiscal 2013 and then tick back up to $598.4 billion in fiscal 2014. The president's budget would lead to deficits of $672.3 billion in fiscal 2013 and $748.6 billion in fiscal 2014, according to projections by the Congressional Budget Office.

Overall the House budget would allow $3.55 trillion in outlays compared to $3.67 trillion under the president's plan.

House Budget Committee Chairman John M. Spratt Jr., D-S.C., said his budget protects the president's priorities while reducing the deficit faster in the face of a deep recession that has adversely affected the fiscal outlook.

Rep. Paul D. Ryan of Wisconsin, the ranking Republican on the panel, criticized the plan as mirroring much of Obama's proposal. He said it would involve the government too deeply in Americans' lives.

"There is a price to be paid for this kind of paternalism," Ryan said.

Meanwhile, White House Budget Director Peter R. Orszag pushed back against the idea that the budgets being drafted on Capitol Hill would differ greatly from the president's plans.

"The resolutions may not be identical twins to what the President submitted, but they are certainly brothers that look an awful lot alike," Orszag said.

In addition to trimming Both the president's discretionary spending requests, neither committee would make room to extend Obama's signature "Make Work Pay" payroll tax credit beyond its expiration in 2010. The credit was enacted as part of the $787 billion economic recovery and stimulus package enacted last month (PL 111-5).

Orszag argued that the since the payroll tax credit of $400 per individual and $800 per couple doesn't expire for almost two years, there is time to work that issue out with Congress.

He also said the budget allows the president's proposals on health care, climate change and education to go forward while meeting the president's goal of cutting the deficit in half by fiscal 2013.

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