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LEGISLATIVE UPDATE FOR DECEMBER 12, 2008:

Budget/Appropriations/Economic Overview


Finishing the FY 2009 Appropriations Bills

All the Appropriations Subcommittees that are covered by the Continuing Resolution have been given until Friday December 19th to have their House-Senate Conferences totally completed. The final agreed upon documents will then be put in a drawer until January when the hope/expectation is to send them to President Obama in the form of an Omnibus Bill. Each of the subcommittees will have mini conferences, with typically only the four principals (the two Chairman and the two Ranking Members) to make final decisions.

The chance always exists that the new Administration will weigh in at some point in the process to re-direct or slow the process but the hope is for a swift conclusion to the remaining FY 2009 spending bills.

Preparing a FY 2009 Stimulus Package

President-elect Obama continues to emphasize the need for a far-reaching stimulus measure to be passed early next year. There is a growing consensus that this is needed, particularly in light of recent Commerce Department reports that the economy shrunk by 0.5% in the 3rd quarter, the announcement by the National Bureau of Economic Research that the United States economy has been in recession since December 2007, and the announcement by the Labor Department on December 5th that the economy lost 533,000 jobs. Obama has declined to specify a size for the stimulus measure but tasked his economic and budget team to develop an "aggressive economic recovery plan" that would create or save 2.5 million jobs. Some lawmakers have suggested the package might be in the range of $500 to $700 billion.

Democratic congressional leaders are aiming to have legislation ready to sign shortly after Obama is sworn in as President on January 20. (Congress reconvenes on January 6.)

Bailout for Detroit Automakers and the Credit Markets

While this ongoing effort is separate from the traditional budget/appropriation process huge amounts of Federal funds are involved. The House is expected to vote on December 10th on a $15 billion package for Detroit with the funding to be distributed to the big 3 auto makers by the Department of Commerce. The Treasury Department continues to manage the distribution of the $700 billion TARP program funds made available in November.

The FY 2010 Process

While FY 2009 appropriations and a major economic stimulus plan are being expedited, President-elect Obama's new Administration will be simultaneously developing an FY 2010 Budget for transmittal to Congress. The 2010 Budget is technically due the first Monday in February 2009, but new Administrations are generally accorded flexibility to develop and transmit their first budget submission by early April. The FY 2010 Budget transmittal will provide Congress with its first opportunity to view the Administration's long-term budget priorities in detail.

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