Federal Budget and Revenue Update
August 2, 2006
Volume 12, Number 11
An Information Service of the NCSL Budgets and Revenue Committee
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August Recess
On July 29, the U.S. House of Representatives adjourned for the August recess having completed work on the Estate Tax and Extension of Tax Relief Act of 2006 (H.R. 5970, see below), the long-awaited pension reform bill (H.R. 4), and all but one of its appropriations bills—Labor/HHS/Education bill.
The Senate will spend an additional week working on legislative priorities, including pension reform and tax extenders, an increase in the minimum wage, and the FY 2007 Defense Appropriations bill.
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Table1: FY 2007 Appropriations Bills |
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House Approvals |
Senate Approvals |
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Approved by Subcmte |
Approved by Committee |
House
Vote |
Approved by Subcmte |
Approved by Committee |
Senate
Vote |
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Agriculture (H.R. 5384) |
5/03/06 |
5/09/06 |
5/18/06 |
6/20/06 |
6/22/06 |
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Science/State/Justice/Commerce (House) H.R. 5672 Commerce/Justice/Science (Senate) |
6/14/06 |
6/20/06 |
6/29/06 |
7/11/06 |
7/13/06 |
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Defense (H.R. 5631) |
6/7/06 |
6/13/06 |
6/20/06 |
7/18/06 |
7/20/06 |
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District of Columbia (S. 3661) |
- |
- |
- |
7/13/06 |
7/13/06 |
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Energy & Water (H.R. 5427) |
5/11/06 |
5/17/06 |
5/24/06 |
6/27/06 |
6/29/06 |
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Foreign Operations (House) (H.R. 5522)
State/Foreign Operations (Senate) |
5/19/06 |
6/5/06 |
6/9/06 |
6/27/06 |
6/29/06 |
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Homeland Security (H.R. 5441) |
5/11/06 |
5/17/06 |
6/6/06 |
6/27/06 |
6/29/06 |
7/13/06 |
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Interior & Environment (House) (H.R. 5386)
Interior & Environment (Senate) |
5/4/06 |
5/10/06 |
5/18/06 |
6/27/06 |
6/29/06 |
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Labor/HHS/Education (H.R. 5647) (S. 3708) |
6/7/06 |
6/13/06 |
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7/18/06 |
7/20/06 |
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Legislative Branch (H.R. 5521) |
6/1/06 |
6/1/06 |
6/7/06 |
6/22/06 |
6/22/06 |
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Mil. Qual. of Life/Veterans Affairs (H.R. 5385) (House) Mil. Const./Veterans Affairs (Senate) |
5/4/06 |
5/10/06 |
5/19/06 |
7/18//06 |
7/20/06 |
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Trans./Treasury/HUD/Judiciary/D.C. (House)
H.R. 5576
Trans./Treasury/Judiciary/HUD (Senate) |
5/26/06 |
6/6/06 |
6/14/06 |
7/18/06 |
7/20/06 |
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SENATE FY 2007 APPROPRIATIONS
Senate: Transportation/Treasury/HUD/Judiciary: On July 20, the Senate Appropriations Committee approved the Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act for FY2007 (H.R. 5576). Here are its most significant features:
- Provides $117 million for the Essential Air Service Program.
- Provides $39.1 billion for Federal Highway Aid (equal to the President’s FY2007 budget request).
- Provides $1.4 billion for Amtrak ($106 million above FY2006 levels).
- Provides $4.1 billion for the Community Development Block Grant (CDBG) program ($1.7 billion above the President’s FY2007 budget request).
Senate: Labor, Health and Human Service, Education: On July 20, the Senate Appropriations Committee approved the Labor , Health and Human Services, Education and Related Agencies Appropriations Act for FY2007 (S. 3708). Here are its most significant features:
Department of Labor
- Provides $2.928 billion for job training programs ($50 million below the House approved level), including: $800 million for adult job training and $935.5 million for youth training (both equal to the House approved level). The bill does not include the President’s proposal to consolidate funds for dislocated worker assistance, adult and youth training, and employment services state administration to create in its place Career Advancement Accounts—self-managed accounts for certain workers in need of new skills/training.
- Does not include a $325 million rescission approved by the House for Training and Employment Services (TES) from prior or current year balances.
- Does not include an increase to the Federal Minimum Wage, as proposed by the House Appropriations Committee.
Department of Health and Human Services
- Community Services Block Grant (CSBG)— provides $694 million for the CSBG, $211 million above the House approved level. The President had sought to eliminate funds for the program.
- Child Care and Development Block Grant— funds the program at $2.062 billion, matching the House approved level and the President’s request for this program.
- Low Income Home Energy Assistance Program (LIHEAP) – provides $2.161 billion in FY 2007, $379 million above the President’s FY2007 budget request.
- Social Services Block Grant— reduces funds by $550 million below FY2006 levels. The reduction stems from supplemental appropriations for Katrina relief under P.L. 109-148.
- Pandemic Preparedness— funds pandemic preparedness at the CDC at $119 million.
- Health Professions Training— funds training programs for health care professionals at $304 million, an increase of $18 million above FY2006 levels. The President’s budget proposal had eliminated funds for a number of these programs.
- Rural Health Programs— funds rural health programs at approximately $6.967 billion, $83 million below the House approved level, this includes allocating funds to a number of programs that the administration had proposed to eliminate or significantly reduce:
- Rural Outreach Grants—funds the program to improve health care services to rural Americans at $38 million, $1.1 million below the House approved level and a nominal increase above FY2006 levels.
- Rural Hospital Flexibility Grants— funds the program at $38 million, similar to the House approved level and $24 million below FY2006 levels.
- Telehealth— provides $6.8 million for telehealth, $3 million below the House approved level and a nominal increase above FY2006 levels.
- AIDS Drug Assistance Program— provides $845 million to states, $55 million above the House approved level and $46 million above FY2006 levels.
- Community Health Centers— provides $1.926 billion, $62 million below the House approved level and $144 million below FY2006 levels.
In addition, the Committee level-funded several programs the President sought to eliminate, including:
- The Preventive Health Block Grant ($100 million).
- Emergency medical services for children ($19.8 million).
- Universal newborn screening ($10 million).
Department of Education
- No Child Left Behind (NCLB)— provides level funding at $12.7 billion in FY2007.
- Individuals with Disabilities Education Act (IDEA)— provides level funding for IDEA ($10.5 billion).
- Educational Technology State Grants— provides $272 million for the grant program, equal to FY2006 levels. The House does not fund the program for FY2007.
- Teacher Quality State Grants— provides $2.74 billion.
ESTATE TAX AND EXTENSION OF TAX RELIEF ACT
On July 29, the House adopted the Estate Tax and Extension of Tax Relief Act of 2006 (H.R. 5970). The bill will phase-in an increase to the estate and gift tax exemption between 2010 and 2015 (the exemption will be adjusted annually for inflation after 2015). The bill includes a two year extension of tax provisions that were set to expire in 2006, including the R&D credit; state and local sales tax deduction; and college tuition deduction. H.R. 5970 also includes an incremental increase to the minimum wage, which will top out at $7.25 an hour in 2009.
PRESIDENT’S ADVISORY PANEL ON TAX REFORM
In November 2005, the President’s Advisory Panel on Tax Reform presented two proposals to reform the tax code: a simplified income tax (SIT) and a direct consumption tax proposal (the growth and investment tax, or GIT). On July 13, the Congressional Research Service (CRS) completed a study evaluating the two proposals. CRS determined the SIT proposal to be the more plausible of the proposals because of the difficulty of implementation of the GIT and its regressive nature. CRS concluded that the benefits in adopting the SIT (versus the costs in implementation) to be unclear; while simplifying the tax burden on higher-income persons, and complicating the tax burden on lower-income persons, the SIT may create future revenue burdens (absent an increase in the respective tax rates) at the expense of low-income taxpayers.
CUTS TO THE CENSUS BUREAU
As reported in the House, the Science, State, Justice, Commerce, and Related Agencies Appropriations Act of 2007 (H.R. 5672) reduces funds available to the Census Bureau for the 2010 decennial census by $53 million. This reduction could have a significant impact upon the states: a reduction in funds for the census would result in a reversion to dated survey methods, (which is expected to increase costs and lead to inaccurate census numbers—both over and undercounts). Inaccurate counts may have an affect on states as allocations for various programs, such a homeland security grants and community development programs, often rely upon census figures in determining program allocations.
The Senate has allocated $644 million for the Census Bureau, $133 million above the House level.
NCSL ANNUAL MEETING
NCSL's 2006 Annual Meeting in Nashville August 15-18, where America's issues will take center stage. http://www.ncsl.org/annualmeeting/
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