May 18, 2006

In the early morning of May 18, the House passed H. Con. Res. 376, the FY2007 Budget Resolution, by a vote of 218-210. The Senate passed its budget resolution, S. Con. Res. 83, on March 16. While the budget resolution makes no specific funding decisions, it is important because it sets the overall level of discretionary spending. The more funding in the budget resolution, the greater the likelihood that the Perkins Loan Federal Capital Contribution and Loan Cancellation Accounts will receive funding.

The House budget resolution calls for slightly under $873 billion in discretionary spending – over $10 billion less than the Senate’s resolution. Due to efforts of Republican moderates, lead by Rep. Mike Castle (R-DE), the Labor, Health and Human Services, and Education (Labor-HHS-Education) allocation is assumed to be approximately $4.1 billion more than the President’s FY2007 request and $800 million more than FY2006 levels.

In the budget resolution and also championed by Rep. Castle is a “Sense of the House” statement that says that the Labor-HHS-Education allocation should be approximately $7.1 billion greater than the President’s request. This $7.1 billion increase is designed to mirror Labor-HHS-Education spending included in the Senate’s budget resolution.

Given the $7.1 billion goal, $4.1 billion is found by increasing the Labor-HHS-Education allocation and the remaining $3 billion comes from a special reserve fund. To access this reserve fund, the House must pass legislation that results in $3 billion in savings. The language regarding the $3 billion in savings is very vague, but floor statements from Rep. Castle and Majority Leader Boehner (R-OH) indicated that the cuts will not come from programs under the jurisdiction of the Labor-HHS-Education appropriations bill, the bill that funds Perkins Loans.

The Senate and House are now planning to have a conference to attempt to work out differences between their two budget resolutions. If they do, a final resolution would be brought up in both bodies. The likelihood of this happening is not great, but the leaders are giving it a try. If there is no final budget, it will make it harder to pass laws appropriating funds for the government later in the year, but Congress will still need to do that.

COHEAO will continue to provide updates as more information becomes available.

Andrew Stringer
Legislative Associate
Washington Partners, LLC
(P) 202-289-3903
(F) 202-371-0197
astringer@wpllc.net