Federal Budgets and Revenue Update

September 21, 2004
Volume 10, Number 4

An Information Service of the NCSL Budgets and Revenue Committee

CBO Updates Budget Deficit Projections

In a report released September 7, the Congressional Budget Office projected the current federal budget deficit fell some $56 billion from March but remains at a record high-$422 billion-in dollar terms. In a hearing before the House Budget Committee the following day, CBO Director Douglas Holtz-Eakin testified that the budget now stands at 3.6 percent of gross domestic product and that Medicare and Medicaid outlays will rise by 8.1 percent and 9.4 percent, respectively, this year. Both health program projections are down slightly from last year. Reacting to the report, Committee Chairman Jim Nussle (R-IA) suggested that “the economy is heading in the right direction…but we need to keep an extra tight grip on spending.” Countering Nussle’s interpretation, Virginia congressman Jim Moran (D-VA) called CBO’s finding “frightening,” noting that the current on-budget deficit, excluding surpluses in the Social Security Trust Funds, is now at $574 billion. The report is available at: http://www.cbo.gov/ftpdocs/57xx/doc5773/08-24-BudgetUpdate.pdf.

USDA Releases Bonuses to States for Exemplary Food Stamp Administration

The U.S. Department of Agriculture recently released $30 million in bonuses to states for exemplary administration of the Food Stamp program. The 2002 Farm Bill authorized USDA to provide awards to States with the best as well as the most improved performance in administering the program. $24 million will be awarded to the 10 states with the lowest and most improved payment error rates and lowest and most improved negative error rates. The payment error rate indicates the percentage of accuracy in determining the correct amount of benefit for recipients. An additional $6 million will be awarded to the six States with the best and most improved negative error rate. The negative error rate measures the frequency of proper denials or termination of benefits. For the list of states receiving bonus awards visit: http://www.fns.usda.gov/cga/PressReleases/2004/PR-0374.htm

Homeland Security Funding Heads to Conference; Senate Labor/HHS Bill Advances

Homeland Security is only the second FY 2005 appropriations measure of the 13 annual appropriations bills to clear both houses, and it could move through conference committee next week. H.R. 4567 reduces the State Homeland Security Grant Program by 44 percent (Senate) and 26 percent (House) from the FY 2004 appropriations level of $1.69 billion. Meanwhile, the Senate Appropriations Committee unanimously passed out its version of FY 2005 funding for Labor, Health, Human Services and Education on Sept. 16. S. 2810 increases funding for state special education grants (IDEA) by 1.2 billion, $161 million more than the House’s increase. S. 2810 increases funding for Title I/No Child Left Behind Act by $1.1 billion, slightly more than the House’s increase.

Congress and President Roll Out Supplementals for Hurricane Disaster Relief

Supplemental spending to help victims of hurricanes Ivan, Charley and Frances is grabbing increased attention in Washington. The president’s initial request for $2 billion cleared Congress with very little trouble. The second request, for $3.1 billion, is being held back somewhat by Republican leaders looking for the best vehicle to move the legislation and by congressmen interested in incorporating billions in special add-ons for aid to farmers and NASA. It’s anticipated that the White House will make its third request the week of September 20, in the wake of Hurricane Ivan.

For more information contact NCSL staff: Molly Stauffer, Nick Steidel.