FY 2008 U.S. federal budget

On February 5, 2007, President George W. Bush submitted (as is customary for a president to do so) a budget request to the U.S. Congress for fiscal year (FY) 2008. It would amount to $2.9 trillion in federal spending and, generally, hold domestic spending levels at FY 2007 levels while devoting additional resources to national and homeland security and international affairs. Soon after, the House and Senate began work on the budget.

Current status
Funding for the government is provided by Congress under Article I, Section 9, Clause 7 of the Constitution. This is the "purse strings power" and there are no exceptions to it. Absent appropriations made by law, no operations by the government may take place: government employees may not work without pay and those who would contract with the government may not "volunteer" their goods or services.

Funding for government employees salaries and wages(including the President) is provided in "one year" funds which expire at the end of a fiscal year. While Congress may pass "continuing resolutions" providing some interim funding where appropriations are not timely enacted, in the absence of such continuing resolutions no government employee may work.

May 2007: House and Senate Democrats agree on outlines of budget
On May 16, 2007, House and Senate Democrats announced an agreement on a final $2.9 trillion FY 2008 resolution that would include $21 billion more for domestic discretionary spending than President Bush had requested.

House Budget Committee Chair John Spratt (D-S.C.) said, "Within this framework, our budget does more for veterans' health care, more for education and more for children's health care."

White House Office of Management and Budget Director Rob Portman declared that Bush would veto any FY 2008 appropriations bills that exceeded his budget request.

House






On March 29, 2007, the House voted 216-210 to approve a FY 2008 budget resolution that would require Congress to offset increased funds for Medicare, SCHIP and other health care programs with tax increases or spending reductions. The House budget resolution exceeded the amount Bush requested for discretionary spending by more than $24 billion.



Senate
On March 23, 2007, the Senate voted 52-47 to approve a $2.9 trillion FY 2008 budget resolution that included funding for an expansion of SCHIP (State Children's Health Insurance Program), as well as billions of dollars in additional funds for health care for veterans and other domestic programs. In total, it included about $18 billion more for domestic discretionary spending than President Bush had requested (including $3.5 billion more for health care for veterans). In addition, the Senate budget resolution included 25 "reserve funds" to provide additional spending for health care and other domestic programs, provided that the costs are offset by spending reductions in other areas or new revenue.



Amendments considered
An amendment, proposed by Sen. Lindsey Graham, to extend the 2001 tax cuts failed.



An amendment, proposed by Sen. Chuck Grassley, to repeal the Alternative Minimum Tax failed.



The American Conservative Union supported the amendment and included it in the American Conservative Union 2007 Senate Scorecard. It gave the following description of the amendment: "The Senate rejected an amendment to the FY 2008 Budget Resolution that would have permitted the repeal of the Alternative Minimum Tax, a tax designed to apply only to millionaires, but now affecting 21 million middle-income families. ACU favors repeal of the AMT and so supported this amendment."

An amendment, proposed by Sen. Jim DeMint to repeal the estate tax failed.



October 2007: Democrats debate spending package
With President Bush threatening a veto of several appropriations bills, Democrats in the House and Senate announced plans to combine the legislation into one spending package, tying funding for education, job training and other social services with money for defense and veterans. Meanwhile, Republicans criticized the strategy, saying the Democrats were holding funding for defense and veterans hostage to pay for pork.

Passage of HHS-Labor bill
The House voted 269-142 to pass a $215.4 billion budget package that lumps together the untouchable fiscal year 2008 Military Construction-Veterans Affairs appropriations bills with the Labor-HHS-Education, that President Bush promised to veto. The package includes $150.7 billion in discretionary spending for the HHS bill and $64.7 billion in discretionary spending for the VA bill. The Senate voted 56-37 to pass the HHS bill after Republicans used a rule established earlier this year to separate the legislation from the VA appropriations bill, before it was sent to the president. However, under a budget point of order established this year, senators can eliminate provisions in a conference report that did not appear in bills passed by either the House or Senate.



Bush signed the defense bill and vetoed health-labor bill
President Bush marked the sixth veto of his presidency by rejecting the health-labor bill. This $600 billion measure to fund education, job training and health programs, was about $10 billion more than what Bush had hoped for, adding to the fight with congressional Democrats over domestic spending. Bush, however, signed a separate bill to give the Pentagon about $460 billion for the fiscal year that began on October 1, even though he was disappointed the military bill had less money than he had sought. Democrats said that the extra funds were needed for programs like education and research on cancer and other diseases, but the money was dwarfed by the Iraq war costs instead. While the president complained that the bill was too expensive and larded with pork, House Appropriations Committee Chairman David Obey, a Wisconsin Democrat, said Bush was "pretending" to protect the budget deficit while "asking us to spend another $200 billion on the misguided war in Iraq."

House failed override attempt on HHS-Labor-Education
House Democrats failed to override Bush’s veto on November 15, 2007 by a vote of 277-141. Comparing Bush’s veto to Iraq military budget requests, House Speaker Nancy Pelosi said "The president says we can't afford to provide help with home heating oil as winter approaches. This would be a million and a half families across our country, for [the cost of] a day and a half or so in Iraq.”



Omnibus Package Prepared
Following the defeat of the Labor-HHS-Education bill, Democratic leaders announced plans during the Thanksgiving recess to include the 11 remaining spending bills as an omnibus package.

The package included $11 billion in discretionary spending above President Bush's recommendation. While lower than earlier proposals of $22 billion in additional funding, the package has still drawn a veto threat from Bush. Senate rules adopted in 2006 posed a significant obstacle to the Democrats' plans. Under the new rule, the minority party can force a split in such packages. Republicans used the procedural move to remove funding for military construction from the HHS-Labor-Education bill.

Earmarks, other spending stripped
House Appropriations Committee Chairman David Obey (D-Wis.) signaled on December 10 his desire to push a budget package that toed the line on President Bush's spending recommendations, by stripping lawmakers' earmarks and funding for the wars in Iraq and Afghanistan. The announcement came on the heels of a Bush veto threat to an earlier omnibus spending package offered by Democrats.

Originally slated to contain $520 billion in funds for the federal government, the scrapped plan would have included $70 billion in funding for the Iraq and Afghanistan war and $11 billion for domestic programs. Obey cited a White House resistance to compromise as one reason for withdrawing the package: "'Absent a Republican willingness to sit down and work out a reasonable compromise, I think we ought to end the game and go to the president's numbers,' Obey said. 'I was willing to listen to the argument that we ought to at least add more for Afghanistan, but when the White House refuses to compromise, when the White House continues to stick it in our eye, I say to hell with it.'"

According to The Washington Post, Obey's proposal "would ax about 9,500 home-district and home-state projects worth a total of $9.5 billion." Some presidential priorities might also be scrapped to keep the bill on-target for Bush's spending level recommendations, including abstinence education, and "nuclear weapons research and development in the Energy Department, NASA programs and high-technology border security efforts" that critics called "wasteful and ineffective."

Congress passed budget package
On December 19, 2007 the House passed the $555 billion omnibus spending package by a vote of 272-142. This included $70 billion in unrestricted funding for Iraq. Many Democrats voted no because of the Iraq money, including Chairman Obey. Pelosi did not vote on the bill and does not vote on most bills, but had previously voted on Iraq measures. Pelosi called the Democratic Congress' inability to force withdrawal of troops for Iraq her "biggest disappointment." However, she said that "We will be relentless in our disagreement. We are not resigned to anything. We don’t have another year of lives to lose. We don’t have another year of prestige to lose in the world." Pelosi said that fights over funding would continue, but there would be a renewed fight over policy-oriented bills demanding more time between deployments.

Rep. Adam Putnam (R-Fla.) said “It would certainly appear that the forces of MoveOn and Code Pink have been defeated." House Democratic Caucus Chairman Rahm Emanuel (Ill.) said, however, "This is the first time this president made a request for funding and didn't get it," noting Bush did not get the full $196 billion he requested.

Bush threatened earmarks in spending bill
The omnibus spending bill combined with the 2008 Defense Spending bill contained over 11,000 earmarks worth a total of at least $15.3 billion The budget package itself contained 8,983 projects worth $7.4 billion. The total earmark amount was reduced from the previous year as Democrats vowed to slash the number of pet projects in their first year in the majority. The 2007 spending bills contained about 25 percent fewer earmarks than the 2006 appropriations. Taxpayers for Common Sense, a group that fights earmarks, found funding for projects including $100,000 for signage in Los Angeles's fashion district, $9 million for "rural domestic preparedness" in Kentucky, and $250,000 for a wine and culinary center in Prosser, Washington. Rep. Ralph Regula (R-Ohio) sponsored an earmark of $126,000 for the National First Ladies' Library in Canton, Ohio. Regula's wife founded the museum and his daughter runs it. Regula had requested hundreds of thousands of federal dollars for the museum since 1991, when he was able to convince the National Park Service to pay $1.1 million for its headquarters.

For the first time the House required representatives to sign their names on their earmarks, identify the beneficiaries and locations, and to certify that neither they nor their immediate families have a financial stake in the spending. However, the Senate did not limit earmarks as severely and changed the language of the rules to limit disclosure of only the earmark authors' names.

On December 20, 2007 President Bush threatened to cancel thousands of earmarks. Bush called Congress irresponsible for combining 11 spending bills into a single 1,400-page measure three months into the fiscal year. Bush said that "Another thing that's not responsible is the number of earmarks that Congress included." They "made some progress" but "they have no made enough progress." Bush said he ordered the U.S. Office of Management and Budget director Jim Nussle to determine the extent of the president's authority to respond to "wasteful spending" in the bill. Aides said such action could include disregarding the earmarks that were only included in conference reports rather than in the appropriations bill itself and interpreting vaguely worded earmarks in a different way then their sponsors intended.

Earmarks in the conference reports were traditionally honored, but the language was not legally binding. If the earmarks were disregarded, the appropriated money would be spent on the purpose in the bill but not necessarily to intended recipients. Bush would not be the first president to try to cancel earmarks. President Reagan's budget director, James C. Miller III instructed agencies in 1987 not to honor earmarks in conference reports. Miller later wrote that "all hell broke loose," and Reagan "was distracted by the Iran-contra scandal and couldn't help. I gave up."