Budget and Revenue Standing Committee

Federal Budget and Revenue Update

January 31, 2007
Volume 13, Number 3

An Information Service of the NCSL Budgets and Revenue Committee

Note: This document is based on a preliminary review of H.J.Res. 20. Not all programs and activities are covered.

Fiscal Year 2007

On January 30, the chairmen of the House and Senate Appropriations Committees, Rep. David Obey (WI) and Senator Robert Bryd (WV) respectively, released H.J. Res. 20, which provides $463.5 billion in funds to keep the
federal government in operation through the end of fiscal year 2007. The year-long continuing resolution (CR) is necessary as the 109^th Congress managed to pass just two of its 11 annual appropriations bills —Homeland Security and Defense— before adjourning in December. The current CR is set to expire on February 15, 2007. The House adopted H.J. Res. 20 today; the Senate will likely consider the joint resolution next week.

H.J. Res. 20 funds the majority of federal programs at FY2006 levels. However, House and Senate appropriators reduced funds to over 60 programs and rescinded unobligated balances that resulted in $10 billion in savings to fund other “high priority needs.” In addition, the CR eliminates all earmarks in FY2006 appropriations bills and committee reports as part of the Democrats commitment to earmark reform. In particular, the resolution provides:

Department of Health and Human Services:

$1.20 billion for Ryan White CARE Grants, an increase of $75.8 million.

Department of Housing and Urban Development:

$3.772 billion for the Community Development Block Grant (CDBG) Program, an increase of $20 million over FY2006 levels.

Department of Justice:

$520 million for the Bryne Justice Assistance Formula Grants, an increase of $109 million over FY2006 levels. The President had proposed to eliminate funds for this program in FY2007.
$542 million for the Community Oriented Policing Services (COPS) program, an increase of $70 million over FY2006 levels.

Department of Education:

$10.7 billion for the Individuals with Disabilities Act (IDEA) Part B state grants, an increase of $100 million over FY2006 levels;

$12.8 billion for No Child Left Behind (NCLB), an increase of $125 million over FY2006 levels, which includes:
- $125 million for school improvement funds to low-income students performing poorly in math and reading;
- $125 million for a new program to targeted, underperforming school districts.

Environmental Protection Agency

$1.083 billion for the Clean Water State Revolving Fund, an increase of $197.1 million over FY2006 levels;
$1.251 billion for Superfund, an increase of $9.0 million over FY2006 levels.

Department of Transportation

$39.1 billion for federal aid for highways, an increase of $3.5 billion above FY2006 levels ($3.471 billion of unobligated federal aid for highways is rescinded under the CR);
Level-funds Amtrak at $1.294 billion.

President’s FY2008 Budget

The President’s FY2008 Budget is expected to be released February 5, 2007. In his budget, the President has promised to balanced the budget by 2012 and permanently extend his tax cuts of 2001 and 2003. The President is further expected to seek a $130 billion -$160 billion “emergency” (off-budget) supplemental for overseas military operations.