Federal Budget Year in Review 2007

Congress and the administration failed to agree on budget priorities this year. While the President announced an escalation of the Iraq War and requested nearly $200 billion for war funding in fiscal year 2008 alone, Congress tried repeatedly to expand health care for children. By December, only one of the 12 appropriation bills requiring approval, the defense bill, passed Congress without being vetoed by the President. Congress wrapped up the budget process with an omnibus spending bill which combined all other bills into one. It included numerous cuts to domestic spending programs, and included another $70 billion in unrestricted war spending.

Administration budget request proposed cuts in domestic spending

In February, the administration budget request proposed a $13 billion cut in domestic discretionary spending.¹ The budget also would have cut billions more in Medicare, Medicaid and other mandatory programs.

The request also planned to make the tax cuts, passed in earlier years, permanent. In fiscal year 2008, the wealthiest five percent will receive $92 billion in tax cuts, or seven times the amount of cuts to domestic discretionary spending.

Children’s health care and other domestic spending vetoed

In October and December, President Bush vetoed bills that would have extended and expanded S-CHIP, a children’s health care program.

President Bush also vetoed the Labor/Health and Human Services/Education appropriation bill passed by Congress in November. The President insisted on $6.7 billion of cuts to the bill, including everything from K-12 education to community health centers. Congress’ bill would have increased spending by $5.2 billion, or 3.5% after adjusting for inflation.² The administration’s cuts would have resulted in 1.4 million low-income families not able to receive heating or cooling assistance; 34,000 children cut from the Head Start program; and 1.2 million uninsured unable to receive care at community health centers.³

More for war

Along with the budget proposal, the administration requested an additional $100 billion in war spending for fiscal year 2007, and another $145 billion for fiscal year 2008. In July, the administration announced it was seeking another $5.3 billion in war spending. In October, it added another $45.9 billion to the request.

In May, Congress passed the request for additional spending for fiscal year 2007, bringing the total for the Iraq War alone to nearly half a trillion dollars. Had Congress passed the requests for fiscal year 2008, the Iraq War cost would have risen to $611 billion.

Congress and the Bush administration battled over war funding and timelines to end the war. The President threatened to veto any bill that contained timelines or other restrictions. In late December, Congress approved another $70 billion in unrestricted war funding.While the administration will continue the push for more war spending, the total for the Iraq War alone rose to $522.5 billion.

Omnibus bill passed

The $70 billion in new war spending was attached to an omnibus appropriations bill which rolled the other 11 appropriations bills into one package. Unable to pass its budget plan without being vetoed, Congress passed a bill which cut many programs in health, job training, and education programs and other areas. A few domestic programs received increases, such as the Low-Income Home Energy Assistance Program and the Women, Infants and Children (WIC) program. Many programs continue to face the cuts begun in 2002.⁴

[1]¹Does not include homeland security which had a proposed increase. The comparison was to spending levels in FY2006 since the FY2007 budget was not yet completed at the time of the administration’s budget proposal for FY2008.
[2]²J. Horney and M. Coven, ‘Labor/HHS/Education Bill – what’s at stake: the President’s budget would weaken education, medical research, and other critical needs,’ Center on Budget and Policy Priorities, November 16, 2007.
[3]³Coalition on Human Needs, ‘Statement on the President’s veto of appropriations for Labor, Health and Human Services and Education must be overriden’ November 14, 2007.
[4]⁴Coalition on Human Needs, ’Congress passes omnibus appropriations bill,’ CHN Human Needs Report, December 21, 2007.