Friday, March 20, 2009

The 2010 Budget: Already in Trouble?

Last week the Congress finally mustered sufficient political will – not normally over flowing even in prosperous times, let alone when deficits top a trillion dollars every year – to send to the White House the Fiscal Year 2009 (the current fiscal year) Omnibus appropriations legislation for President Obama’s signature.

Unlike most recent years, Congress and the administration skated relatively unscathed by traditional critics because the latter had refocused their attention and their outrage from what looked to be a winning issue – the large number (more than 8,000) and value (more than $5 billion) of “earmarks” in the 2009 Omnibus legislation – to the retention pay and bonuses paid by insurance giant AIG to top executives after the company had received on the order of $170 billion in taxpayer money to keep the company solvent.

The Omnibus legislation was successful in raising the appropriation ceiling for a number of budget line items for diplomacy and development initiatives. In his proposed budget for 2010, President Obama has asked for a 10 percent increase in international affairs, which includes contributions to international organizations such as the UN.

But the Chair of the Senate Budget Committee reportedly stated that the President’s first budget does not have enough support in Congress to pass. That type of pessimistic rhetoric in the past has bee a signal for budget conservatives of both parties to go after the international affairs budget. It, after all, has no constituency that will be offended enough to vote against those in Congress who cut this part of the spending proposal.

In contrast, the nation can look forward to a generous funding spree for the armed services – not because the threats are any worse this year than last but because the Congress has turned defense into a jobs program.


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