January 15, 2010
J.R. Reskovac
Sarah Strup
Appropriations- Budget
On Thursday, President Obama spoke about an item that will appear in his fiscal 2011 budget proposal intended to recoup money spent in the $700 billion bailout of the financial firm industry.
The fee is intended to raise $90 billion over the next decade from about 50 institutions, including banks, insurers and thrifts that hold assets of more than $50 billion. More than 60 percent of the revenue will likely be paid by the 10 largest financial institutions, the White House said. Senior administration officials said the plan would impose a tax on bank liabilities, defined by the administration as the difference between a firm’s total assets and its combined equity and insured deposits.
At the request of Senate Budget Chairman Kent Conrad (D-ND) the Congressional Budget Office (CBO) again has examined which policies might work best to raise the employment rate. While nearly all professional forecasters believe that the economy has begun to recover from the recent recession, many also predict a slow recovery with a high rate of unemployment for several years, the CBO said in a report released Thursday. They also said actions such as reducing taxes for firms that increase payroll or increasing aid to the unemployed are among the steps likely to get the best return on money spent in 2010 and 2011.
The CBO announced on its website plans to release its annual budget and economic outlook report Tuesday, January 26. That report will include new baseline projections for both this year’s deficit as well for the next 10 years and sets the stage for release of the President’s FY 2011 budget in early February.
Defense
The Marine Corps' top officer today said that his service is falling further behind in the process of repairing or replacing equipment worn out or lost in the conflicts in Iraq and Afghanistan. "We're in trouble today," Gen. James Conway, the Marine Corps commandant, told the Surface Navy Association forum in Arlington, Virginia. Conway said he has become "increasingly concerned" and has talked to Defense Secretary Gates about the need to "reset" Marine forces. Two years ago, the Marines were meeting about 75 percent of their reset requirements, he said. Now, the gap between what they need fixed or replaced and what has been done "has increased to about 50 percent."
Although he has a "promissory note" promising to fix things after the wars, Conway said, "we need to start doing something about it now... to get back to where we need to be." The commandant did not provide a cost for his reset needs, but data provided Congress in the past put the requirement in the billions of dollars.
So far, Congress has approved about $16 billion to repair and replace Marine Corps equipment lost or damaged in combat. Last month, Marine Corps Gen. James Amos told House lawmakers that the latest reset bill, which was estimated in July to be about $20 billion to replace damaged and unusable equipment, had jumped to $30 billion. Although he could not give details because it has not been released, Conway also expressed concern about directions coming out of the Quadrennial Defense Review to focus on the current irregular or hybrid conflicts against terrorism.
Those directions ran counter to the Marines' plea for more amphibious ships to meet the requests of regional commanders and the service's desire to regain its expeditionary capabilities.
Washington Outlook
While healthcare negotiations continue, the Senate initiates its year Wednesday by considering a bill expected to raise the federal debt limit above the $13 trillion ceiling the House approved last year, a politically laden effort that should include several tough votes. Floor action in the House will take on a more regional emphasis, with several bills to resolve longstanding Indian water-rights disputes scheduled for votes.
If a compromise can be reached on healthcare legislation and sent to CBO for scoring this week, Senate and House votes on the legislation could occur during the last week of the month. Senators before Christmas punted the debt limit increase to this month as part of a deal that let members head home Christmas Eve. They instead passed a short-term debt extension.
Senate Majority Leader Reid, who aides said discussed the debt ceiling with President Obama and House leaders this week, has not said how much the bill will raise the limit. However, Senate aides said a significant increase above the $925 billion hike in the House bill is needed to avoid another increase until after November's election. Action before the election is considered politically unfeasible. The Senate's unanimous consent agreement on the debt ceiling bill set up a vote on an amendment offered by Budget Chairman Kent Conrad and ranking member Judd Gregg to create a bipartisan budget commission to recommend spending cuts, including in entitlement spending, to Congress.
The panel's recommendations could get quick floor consideration, a usurpation of congressional power that has drawn opposition from lawmakers such as House Speaker Pelosi and Senate Finance Chairman Max Baucus.
Gregg has said the commission lacks the votes to pass. The White House is working on a compromise that would likely create a weaker panel. Senate Democrats, who can offer four amendments to counter other debt ceiling amendments, could also set a vote on an amendment to create a watered-down commission as an alternative to the Conrad/Gregg commission.
A related amendment by Reid would alter pay/go laws. A spokeswoman said the amendment is not yet available. Another closely watched amendment, to be offered by Senator Thune (R-SD) would end the Troubled Asset Relief Program, which Democrats plan to tap to help pay for job creation legislation. Republicans say that voting to continue the unpopular program will be politically costly for Democrats. Eight other amendments could receive votes. With no limits on debate, consideration of the bill will most likely be delayed for at least two weeks.
The Senate also is expected to vote on a judicial nomination and on confirmation of Erroll Southers, the nominee to head the Transportation Security Administration who faces Republican holds.
House bills to be considered would approve settlements of water rights of four pueblos in New Mexico, between the Taos Pubelo, New Mexico and the United States and water rights claims in Arizona.
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Sarah Strup
Capitol Decisions
Suite 675 East
101 Constitution Ave, NW
Washington, DC 20001
Phone: 202-737-8727
Fax: 202-638-0353
