‘Line’ Items: Spring Cleaning/Opening Day Edition

Cleaning out the House – Spring is often associated with housecleaning. Congress is long due to clear out the FY 2011 budget seeing as we are now half way through the fiscal year. This week may be the week, with a deadline looming on Friday and both sides reportedly close on a deal. The continuing resolution funding the federal government expires on April 8 and many lawmakers have indicated they are unwilling to approve of more stopgap measures. Negotiators are trying to finalize a deal to fund government for the rest of the fiscal year that would cut a total of $33 billion from the FY 2010 spending level. Agreement must still be reached on where exactly the cuts will come from and what to do about the policy riders included in the House-passed long-term continuing resolution, H.R. 1, including denying funds for certain EPA activities and cutting off federal funding to Planned Parenthood. Congress just may clean the 2011 budget house in time for the 2012 budget.

Opening Day for FY 2012 Budget – Baseball season may have gotten underway last week, but some real hardball is expected to begin Tuesday when House Budget Committee Chair Paul Ryan (R-WI) unveils his proposed budget for next year. Ryan reportedly will swing for the bleachers with a budget plan that seeks to cut over $4 trillion over the next decade. The budget will open up debate over entitlements by slowing the growth of Medicaid and Medicare, which are major drivers of our debt. Ryan told Fox News that his blueprint will propose to block grant Medicaid. In regards to Medicare it will move along the lines of the “premium support” system he recommended along with former OMB and CBO Director Alice Rivlin, which would gradually transform the system into one where seniors pay for their health care through vouchers. The entitlement debate will heat up more when the trustees who oversee Medicare and Social Security issue their annual report later this month on the state of finances for the two programs. Ryan also said his budget will include spending caps, perhaps along the lines of what Senators Claire McCaskill (D-MO) and Bob Corker (R-TN) proposed earlier this year. Democrats have already begun batting practice on the plan with House Budget Committee Ranking Member Chris Van Hollen (D-MD) saying the proposed Medicaid changes would do “serious damage to the health safety net”--and the bats are just warming up.

Juggling the Lineups – While the two parties look to keep mostly to their own dugouts in the budget debate, some bipartisan teamwork is developing. Senators Ron Wyden (D-OR) and Dan Coats (R-IN) will platoon on a bill similar to the comprehensive tax reform legislation that Wyden and then-Sen. Judd Gregg (R-NH) co-sponsored last Congress. House Republicans are talking to Blue Dog Democrats about fiscal cooperation. Rep. Ryan teamed up with Rep. Jim Cooper (D-TN) on a bill to improve Medicare transparency. And Senators Tom Coburn (R-OK) and Herb Kohl (D-WI) hooked up on a double play to reduce the printing of the Congressional Record in order to save around $8 million annually.

Coburn Seeks to Strike out Ethanol Credit – Sen. Coburn has taken to the mound against the tax subsidy for ethanol producers. He faces some opponents who are going to bat for the tax credit, including powerful farming interests and Grover Norquist of Americans for Tax Reform. Corburn is getting some help from colleague Sen. Jon Kyl (R-AZ) who supports eliminating the tax credit along with other tax subsidies. He said:

In fact, I support striking any of the so-called tax expenditures, which are just another way for taxpayers to be writing a check. They are spending by the government, and we shouldn’t have those in the tax code.

Lots of Letters – Letters and statements on fiscal matters went flying around Washington last week. Over 64 thought leaders issued a letter to the White House and congressional leaders calling for action on deficits and debt. This followed a previous letter from 64 Senators demanding bipartisan action. The Blue Dog Coalition issued benchmarks for fiscal reform that include putting everything on the table and reducing the deficit by $4 trillion over the next decade. And Sen. Scott Brown (R-MA) wrote his own letter seeking bipartisanship and long-term solutions.

Key Upcoming Dates

April 7

• Weekly unemployment claims data released by the Department of Labor BLS.

April 8

• The current continuing resolution (CR) funding government operations expires. Congress must adopt spending bills funding the federal government for the rest of FY 2011 by then or pass another stopgap measure.

April 15

• Statutory deadline for Congress to enact a Fiscal Year 2012 Budget Resolution.

April 18

• Deadline to file federal tax return.

April 15 - May 31

• Period in which Treasury Secretary Geithner says the U.S. will likely reach the debt ceiling.