By Larry Jones
May 21, 2007

After weeks of deliberations, Congress approved a $2.9 trillion budget on May 17 that will fund federal agencies and programs in fiscal year 2008, which begins October 1. While the measure does not provide specific amounts for programs, it sets overall spending limits on broad budget categories. The measure provides $954.1 billion for none war-related discretionary spending, which is $21 billion more than President Bush requested, and $23 billion more if $2 million in advance appropriations is counted. Now that the budget is complete, Democratic leaders in Congress will divide up the total pot of discretionary funds among the 12 appropriations subcommittees who will begin developing appropriations bills that set specific amounts for programs for fiscal year 2008.

The House adopted the budget by a razor-thin majority, 214-209, and the Senate adopted the measure later in the day by a vote of 52-40, mostly along party lines. It rejects the President’s proposal to cuts education and training. Instead, it increases the amount available for this function by $9.5 billion which could be used for Individuals with Disabilities in Education Act, No Child Left Behind Act, and Pell grants. It would also provide up to $50 billion to expand coverage and improve children’s health through the State Children’s Health Insurance Program (SCHIP). And it would provide $43.1 billion for veterans’ programs, including medical care, which is $3.6 billion more than the President requested.

While the federal deficit is projected to reach $252 billion next year, the budget promises to eliminate the deficit over the next five years and produce a $41 billion surplus by 2012, without raising taxes. The budget also provides $180 billion for middle-class tax relief, including extension of marriage penalty tax relief, the child tax credit and the 10 percent income tax bracket, which are set to expire in 2010. Because the budget does not extend all of the President’s tax cuts enacted in 2001 and 2003, House Republicans claim it will impose a huge tax increase on American families.

The White House has threatened to veto any spending measure that exceeds the President’s budget request and a number of House Republicans are circulating a letter to collect enough signatures to sustain a presidential veto. With only razor-thin majorities in both houses, Democratic leaders will need to secure strong bipartisan support to ensure the passage of the 12 appropriations bills and protect them from a presidential veto.