WASHINGTON’S LABYRINTHINE WAYS

p 2003 Federal Budget Not Adopted Until Mid-February, More than Four Months into the Fiscal Year. The federal government operated under continuing resolutions that simply maintained funding at prior-year levels until the newly elected Congress in mid-February enacted an 1,100-page Consolidated Appropriations Resolution for 2003 covering the eleven budget measures that the prior Congress put off. Given the length and scope of the Act, few members had read what they enacted. Republicans gained enough votes in each House to pass the Consolidated Act, that largely followed last year’s Senate bill, and Congress only imposed an across-the-board reduction of 0.65 percent rather than the 10 percent urged by the White House.

p 2003 Budget Act Contains Many Special-Interest Provisions Facilitated by the Single Approval Vote. For example, the bill calls for studies of oil drilling in the Arctic National Wildlife Refuge, provisions allowing logging in national forests, and one preventing court challenges to a wilderness plan for the Tongass National Forest. It also restricts the Treasury Secretary from issuing regulations that would have permitted banks to engage in real estate transactions. In commenting on the lobbyists’ roles and how provisions of a specialized nature were secured, Senator Arlen Specter (R-Pa.) quipped, "This is a bill that gives sausage a bad name."

p Consideration of 2004 Budget Well Under Way. Significant policy changes and canceling of some domestic programs seem likely as Congress turns to the 2004 budget due to start October 1, 2003. The need to finance the military buildup, let alone the potential costs of carrying out a war and subsequent occupation, will put severe strains on domestic spending. The current deficit that replaced the large surpluses of 2000 are about to double under the 2003 budget and the 2004 proposals may send it out of sight.

p Congressional Budget Office Warns Bush Budget Will Create Huge Deficits. The Republican-controlled Congressional Budget Office released its estimates that even without the President’s spending or tax-cut proposals, or a war with Iraq, that the 2003 deficit would be $246 billion. If Bush’s 2004 proposals were adopted, this would create a $2.7 trillion debt through 2013. Contributing to the debt picture would be immense increases in Medicare funding and at least $95 billion to wage the war in Iraq. (Congress is trying to pin the Administration down on that cost without much success.) When Bush’s proposed supply-side tax cuts are added, the CBO estimated they would further reduce Treasury revenues by $1.6 trillion. This dire deficit perspective caused congressional Republicans to propose immediate changes. The President’s proposed elimination of the tax on dividends and making permanent the tax cuts enacted last year, justified as a needed economic stimulus, are likely to have tough sledding.

p Federal Funding to Strapped States and Local Governments for Domestic Programs Faces Reductions. The President’s 2004 budget puts a number of urban development and housing programs in jeopardy. He would: (1) eliminate funding for HOPE VI grants used by public housing authorities to renovate older, run-down projects; (2) terminate funds for the largely unfunded second round of Empowerment Zones only several years into their ten year programs; (3) cut off funds for brownfield redevelopment of environmentally impacted sites, and, (4) eliminate section 108 loans under the Community Development Block Grant program that pledge future-year CDBG grants as collateral for borrowing funds in the private market to undertake larger projects. The latter, curiously, only involve about $7 million in federal funds as credits for private loans. Use of local CDBG revenues are seldom needed in light of HUD’s current requirement that alternative income streams be made available to pay off the loans. Ending section 108 loan authority makes little sense except to clear the way to curtail or cut off CDBG funds in subsequent federal budgets.

p Transfer of Administration (and Related Fees) for Housing Voucher Program from Local Housing Authorities to the States Proposed. Along with loss of local funding, the proposal creates concern that federal funds will be reduced in later years. Kit Bond (R-Mo.), the Senate Appropriations chair for VA, HUD, and Independent Agencies said block grants rarely receive increases once the funding level is established. Given the dire fiscal conditions of most states, he questioned their interest in taking on a housing voucher block grant program. Congressional leaders of both parties have criticized these proposals as major unjustified changes in federal support for local community development and housing activities.

p President’s 2004 Education Budget Proposal Falls $6 Billion Short of His "No Child Left Behind" Initiative. The proposed 2004 budget would significantly reduce funds for educational reforms enacted only a year ago with much fanfare. This touted urban policy initiative to aid the poorest children would get $6 billion (or 30 percent) less than amounts Congress called for last year. States have filed plans as required for boosting student achievement, but federal funding earmarked for such measures as providing "highly qualified" teachers in every classroom is insufficient. The President’s legislation enacted last year specifies competency levels, training requirements, and degrees needed for both established teachers and alternative certificate programs as well as content knowledge of courses taught, but funding support is needed.

p Federal Judge Imposes Personal Fines on Justice Department Attorneys in Indian Trust Fund Litigation. Judge Royce Lambert ordered five Justice Department lawyers be fined personally for filing a "frivolous" motion resulting in the waste of time and resources for plaintiffs’ attorneys in a class action. The judge’s sanction arises out of litigation filed in 1996 on behalf of over 300,000 Indians who claim they have been cheated out of $137.2 billion because of Interior Department incompetence and negligence in administering Indian Trust Fund accounts over a 115-year period. For years, the federal government either ignored or disputed Indian claims about its failure to distribute amounts received for sale and lease of tribal lands and provide detailed accounting of how much money actually went into the Trust Fund from sale of oil, mineral, and timber rights, and grazing leases of Indian lands.

p House Republicans Reduce Ethics Restrictions. House ethics rules amended to allow lobbyists to cater meals to member offices and charities to pay for member travel and lodging expenses for "educational" trips, some held at plush resorts that include free golfing. This reversed stringent restrictions imposed when Republicans took over the House in 1995. How perspectives change with tenure. The revisions were tucked away in House rules adopted at the start of each Congress, approved by a 221–203 party-line vote. Common Cause, a public interest group, called it a return to influence peddling. To water down the $50 limit on meal gifts in Washington (and a yearly $100 limit from any one source), a new "pizza rule," allows costs to be divided by the number of persons offered the meal. The Republican Ethics chair was troubled by and objected to the changes, but said he was overruled. Although he felt no one could really be "bought" for a pizza, he said it gave an "appearance of evil."

p Action by Twelve California Jurisdictions for Damages Caused by Guns Dismissed Against Manufacturers and Industry Associations, Leaving Only Dealers and Wholesalers Facing Trial. Despite an affidavit from a former official of an industry trade association that those in the industry knew some dealers illegally diverted weapons to criminals and teenagers, a state court dismissed action by cities and counties including San Francisco, Los Angeles, and San Diego, against all but the dealer and wholesaler defendants. The affidavit also noted industry attempts to silence those in its ranks who attempted to stop the illegal diversions. The suit is among those brought by some thirty cities and counties nationally against the gun industry on a public nuisance theory arguing the industry deliberately distributed guns in a way that allows easy access by juveniles and criminals despite state laws prohibiting such sales. Suits continue in Chicago, Cincinnati, Cleveland, and Newark. Judges in some states dismissed damage actions on grounds the prohibited distribution was too far removed to hold manufacturers liable. Lawsuits in Atlanta and New Orleans were each terminated by state legislation giving immunity to the gun industry. Bills have also been introduced in Congress to grant gun makers and dealers immunity.

p Senate Democrats Maintain Filibuster over D.C. Circuit Court Nominee. A month-long filibuster by Democrats on the nomination of Miguel Estrada to the court of appeals twice has survived cloture votes by Republicans attempting to obtain sixty votes to cut off debate and obtain a vote on the conservative, Honduran-born lawyer who once served in the Solicitor General’s office. Despite only obtaining fifty-five votes to cut off debate, four of whom were Democrats, Bush responded that "I will stand by Miguel Estrada’s side until he is sworn in as a judge." Estrada would be the first Hispanic to serve on that court. Democratic opponents cite his failure to answer questions on his judicial philosophy and have demanded memos he wrote when in the Justice Department. At issue is just what the scope of inquiry in the confirmation process should be regarding nominee positions on controversial issues, the extent to which such opinions must be surfaced, and their relevance to Senate exercise of its consent powers. Further efforts to reopen hearings to resolve open questions or to invoke cloture can be expected.

p Adding Too Many Embarrassing Special Tax Breaks Caused GOP to Withdraw Military Benefits Bill. Objections of Republican House Members to a number of parochial tax breaks inserted by the Ways and Means Committee caused House leaders to pull the bill originally intended to provide some $482 million in tax breaks for military personnel, including activated reservists. Chair Bill Thomas (R-Calif.) had told his committee they could add other tax provisions so long as none individually exceeded $100 million. Targeted tax breaks to repeal the excise tax on fishing tackle boxes, to exempt weather-related sale of livestock, and to reduce taxes on foreigners who realized winnings on horse betting were among the provisions added. When the bill got pulled to strip off such provisions, Rep. Barney Frank (D-Mass.) quipped that Republicans had gotten "religion," noting that "You can’t have a Christmas tree during Lent."