Kaisernetwork.org – Feb. 23, 2009.

President Obama on Thursday plans to announce his FY 2010 budget proposal, which will include funds for health care programs, the Wall Street Journal reports (Bendavid, Wall Street Journal, 2/19). The Obama “administration is not prepared to submit a full budget, complete with the thick volumes of appendices and historical tables familiar to budget aficionados,” according to the Washington Post. As a result, Obama will announce only an outline of his budget proposal and will release specific details this spring (Montgomery, Washington Post, 2/20).  Click title to read more…

According to the New York Times, Obama in his budget proposal “has banned four accounting gimmicks” that the Bush administration used to “make deficit projections look smaller.” As a result, the federal budget deficit will appear $2.7 trillion higher under his budget proposal, according to administration officials. The four accounting changes involve Medicare reimbursements to physicians, revenue from the alternative minimum tax, expenditures for the wars in Iraq and Afghanistan and the cost of disaster responses. The Bush administration “routinely budgeted less than actual costs for payments to physicians,” and Congress “regularly waived a law mandating the lower reimbursements for fear that doctors would quit serving beneficiaries in protest,” the Times reports (Calmes, New York Times, 2/20).

“Because of the current economic crisis — and the nearly $2 trillion the government has committed to address it — Obama has little hope of erasing the deficit, even using a 10-year window,” and that “could make it much tougher for the president to make good on some of his most significant — and expensive — campaign promises, such as expanding health care coverage for the uninsured and cutting taxes for the middle class,” the Post reports (Washington Post, 2/20). Jim Horney, director of federal fiscal policy for the Center on Budget and Policy Priorities, said, “It’s a huge challenge, and that’s before you even get to Obama’s initiatives for health reform and other things,” adding, “It’s an enormous lift and an enormous task to see how all the pieces fit together,” but “it’s also an incredibly unusual time and situation” (Wall Street Journal, 2/20).

Budget Events
In an effort to “prepare the country for the painful spending cuts and program changes that will be needed to begin reducing the red ink,” the administration next week has planned a number of events related to the budget, the Post reports. Obama on Monday will host a White House summit on fiscal responsibility, with lawmakers and experts on health care and other areas likely to attend (Washington Post, 2/20).

In preparation for the summit, “battle lines are being drawn over how the new administration should address long-term budget challenges,” CQ Today reports. According to CQ Today, fiscal conservatives “believe the aging of the population and the rising cost of health care require aggressive action to deal with the long-term costs of Social Security, Medicare and Medicaid,” and liberals are “concerned that a focus on the major entitlement programs will lead to cuts in the social safety net when the real issue is not the efficacy of the government-run programs but the rising cost of health care across the economy” (Clarke, CQ Today, 2/19).

On Tuesday, Obama will address the state of the economy in a speech to a joint session of Congress (Washington Post, 2/20).

Omnibus Appropriations Bill
In related news, Congress next week will begin work on an omnibus appropriations bill that would include the FY 2009 Labor-HHS-Education appropriations bill and the eight other unapproved FY 2009 appropriations bills. The omnibus appropriations bill would increase discretionary spending by 8.7% from FY 2008 to $410 billion, according to figures from the White House Office of Management and Budget. Since last October, the federal government has operated under a continuing resolution that will fund most Cabinet departments and federal agencies at FY 2008 levels until March 6. The omnibus appropriations bill would fund those departments and agencies from March 7 until Sept. 30, the end of the fiscal year (Wall Street Journal, 2/20).

Read Source article