"Now our work begins," said House Budget Chairman John Spratt (D-S.C.) after receiving his copy of the FY 2011 budget from Government Printing Office representatives.
And that's the truth.
First, members of Congress will review President Obama's proposal. Highlights of Mr. Obama's plan for FY 2011 include continued funding for the wars in Afghanistan and Iraq, big boosts for education, another jobs bill and tax cuts and credits for small businesses. It also rolls back some Bush administration priorities, including eliminating the 2001 and 2003 tax cuts for those making over $250,000 per year and cutting NASA's man to the moon program.
The administration estimates the deficit in 2011 will hit almost $1.3 trillion, but they revised their estimate for the current year, estimating the 2010 deficit to be a whopping $1.6 trillion. Staffers all over the Capitol are pouring over each proposed cut and each spending proposal carefully to start picking which battles need to be fought.
Next, a parade of the president's cabinet secretaries head to the Hill to defend Mr. Obama's budget priorities. Treasury Secretary Tim Geithner, Secretary of State Hillary Clinton, Defense Secretary Robert Gates and all the other cabinet members sit in the hot seat to defend cuts here and make the case for more spending there. Expect many questions from both Democrats and Republicans this year to focus on what the administration is doing to tackle deficits and create jobs at the same time.
Then, the House and Senate each craft and pass a budget resolution of its own. All that is needed in both chambers to pass a resolution is a simple majority. The House and Senate then go to conference committee to work out differences between the two resolutions and then the budget must pass each chamber again, in theory before April 15th. For a budget resolution, there is no presidential signature required. The budget is complete.
End of story? Not even close.
Now, Congress has a blueprint, but that doesn't mean federal agencies can plan on that money. To actually spend money, the programs have to be approved and then funded by the Appropriations Committees. It's said that appropriations panels really hold the purse strings of the federal government. For FY 2010 for example, the Appropriations Committee's spending for each department was in some cases over the target and in some cases under. And that's where many of the "cuts" that are recommended in the budget are magically restored.
(at left, President Obama makes remarks about the budget at the White House.)
In some years, the Appropriations Committees don't even have a budget to work with because Congress could not pass one. It's not surprising if you think about it. A budget reflects an administration's political priorities. Usually, with a Democratic president and Democratic control of the House and Senate, those priorities are similar enough to work out a budget agreement. But swap control of the House or the Senate, and you have vastly different wants. Even with one party controlling both ends of Pennsylvania Avenue, it can be tough to pass a budget resolution in an election year, too.
Since FY 1999, there have been four years that Congress could not pass a budget resolution at all, making the powerful Appropriations Committees all the more powerful.
Congress is supposed to pass all 12 of its spending bills by September 30 each year before the next fiscal year begins. This deadline, however, is usually not met, forcing Congress to pass Continuing Resolutions to fund the government until each bill is passed, or they wrap all the bills into a massive omnibus spending bill. Only once all of these bills have passed both the House and Senate in the exact same form, can the president sign the measures, and the Federal Government can actually start spending according to a plan.