Budget

Yesterday, the House and Senate Appropriations Committees jointly released text of a fiscal year 2009 Omnibus Appropriations bill that would fund federal agencies for the remainder of the fiscal year. Since fiscal year 2009 began in October, federal agencies have been operating under a continuing resolution that maintained funding at 2008 levels. (Yes, we know it's confusing--you can learn more about the federal budget process here and here).

For the most part, the Omnibus bill maintains funding levels for key early education programs at fiscal year 2008 levels or provides very modest nominal increases.

While the relatively stable funding for early education programs may look unimpressive, it's important to remember that Congress just passed a stimulus bill that provided substantial amounts of funding for many of these programs, so in fact states, local school districts, and Head Start agencies will be receiving a lot more federal dollars for these programs this year than they did in the past.

The holiday surprise in California this year was that Gov. Schwarzenegger didn't wait to the usual date -- often January 9 or 10 -- to release his budget proposal for the 2009-10 fiscal year. Instead, the proposal was released on Dec. 31. And in another departure from protocol, the governor wasn't there to do the releasing. He was at his vacation home in Idaho with his family. Finance director Mike Genest handled the chore.

The release seems to be a way to accomplish two political goals: 1) to show urgency (we're releasing the budget early) while 2) burying the news of a horrible budget proposal that includes big spending cuts, borrowing and tax increases, many of which represent a reversal from previous Schwarzenegger positions. Shaking things up is a good thing, but I'm not sure if this early budget release accomplished much. The proposal itself is unlikely to spark fast action by a dysfunctional legislature. But it's not clear if there's any force in the universe that can force consensus in the California legislature.

The new Democratic leader in the state senate, Darrell Steinberg, appears to have concluded -- correctly, it says here -- that California's legislative Republicans will never back any tax hike, no matter the current budget crisis. Republicans had thought they could block a budget solution because of the state's requirement of a two-thirds vote to pass a budget or raise taxes. But now Steinberg and Assembly Speaker Karen Bass have constructed a proposal that mixes revenue cuts and tax hikes and is designed to avoid the two-thirds rule. The result is highly technical and convoluted. One piece involves moving around tax revenues between state and local pots, another involves reducing some taxes while establishing or raising others. (Details are here, via the Sacramento Bee).  but it should pass his chamber on a party-line vote. Here's hoping the Assembly then takes it up and sends it to the governor's desk.

No matter whether Sen. Barack Obama (D-IL) or Sen. John McCain (R-AZ) wins today's election, the next president is going to face major challenges on the higher education front.

While neither candidate has made education a centerpiece of his campaign, each has offered proposals that may be difficult to carry out given the hurdles that lie ahead. Not the least of which is the federal budget deficit, which is likely to far exceed the $482 billion the Congressional Budget Office projected in July. Obama may be particularly frustrated in his plans, as he has called for significantly increased spending on federal student aid. McCain, on the other hand, has proposed consolidating the government's aid programs.

Here is a brief description of some of the other student aid challenges awaiting the next president:

• The Continuing Credit Crunch

Over the last year, the federal government has made extraordinary efforts to help the student loan industry cope with the turmoil in the financial markets. As a result of these efforts, and the revitalization of the Direct Student Loan program, students haven't experienced any difficulty obtaining federal loans.

He has called a press conference for 3 p.m. Pacific, apparently to do just that.

In the Connecticut town of Avon, voters have the right to hold as many as three separate referenda on the town budget before officials can enact a spending plan themselves. This spring, voters have used the referendum twice -- twice, in fact, in the past three weeks -- to vote down the town government's proposed budget. A third referendum is scheduled for June 25.

Here's my look at how Schwarzenegger's proposed budget cuts, especially on education, are getting in the way of his push for budget reform and a redistricting ballot initiative that appears headed for the November ballot in California.

In each formulation of American grand strategy since World War II -- until we inexplicably stopped such planning in 1992 -- the President and Congress relied on the power of the American economy to do the strategic heavy lifting. Sixteen years, however, is far too long for even the American economic engine to coast without a strategic re-alignment, and the stimulus, bailouts, subsidies and even military operations that naturally ensued have forced even Martin Wolf of the FT to declare the "dream of global free market capitalism" dead. Writing in the upcoming issue of The Nation, Sherle Schwenninger, looks to the architects of the New Deal and finds three lessons essential for re-tooling the American economic engine and bring market capitalism back home to America's shores.

Today in Washington, the House and Senate consider their respective versions of the budget before they close up shop for two weeks of spring recess. By reading the budget you can usually get a sense of the big-ticket items, but smaller-ticket items are usually left out of the text in the House, and only added in the Senate by floor amendment.

That's why I'm so surprised that the budgets of both Rep. Spratt and Sen. Conrad included specific text to create a reserve fund for a public-private entity for comparative effectiveness research -- i.e a way to find out what really works for patients and at what cost.

As the Senate Budget Committee's supplementary materials state:

"The purpose of such research would be to evaluate and compare the clinical effectiveness of two or more health care interventions, treatment protocols, procedures, medical devices, diagnostic tools, pharmaceuticals, and other processes or items used in the treatment or diagnosis of patients. This information could lead to savings over the long-term by allowing providers to avoid treatments that may be clinically ineffective, while at the same time improving health care outcomes." 

The United States loses 10 Bradley fighting vehicles a week in Iraq and Afghanistan. In addition to the tragic loss of our fighting men and women this figure represents, this loss rate translates to a cost of $30.7 million dollars. Add it all up and we're spending about $3.5 billion per week, but only $350 million on pay for our troops. Writing in TomDispatch, New America's Bill Hartung helps us all get a handle on this large, large number.