Unfinished spending measure complicates release of fiscal 2008 budget

President Bush will release his fiscal 2008 budget on Monday, while Congress is still working on appropriations for the current fiscal year. This complicates matters for the White House's Office of Management and Budget, which developed the proposal, and for congressional staff, agency officials, and reporters, who want to know how much of an increase or decrease the president is seeking for each federal program.

It isn't an issue for the Defense and Homeland Security departments, which got appropriations bills enacted, but the rest of the government is asking: What's the current funding level? That nitty-gritty question won't be answered for a while, since Congress took up a bill this week to fund the government for the rest of the year.

At the macro level, there's another question hovering over the budget: Who cares? With Bush a lame duck, and with Democrats in control of Congress, the familiar phrase "dead on arrival" hangs in the air.

Budget experts, such as Stan Collender of Qorvis Communications, say that Bush's 2008 budget is still the basis for Congress to make decisions about routine funding of federal agencies, even if his policy proposals are rejected. "Ninety-five percent of what is in the president's budget request will be accepted without controversy," Collender said.

Against this backdrop, OMB Deputy Director Stephen McMillin discussed the new budget shortly before the Democratic leadership in Congress unveiled its proposed continuing resolution for the rest of this fiscal year. Edited excerpts from that interview follow.

NJ: How does the current state of uncertainty complicate the process of producing a budget request?

McMillin: The first level of complication is simply workload -- trying to track what's going on in the appropriations [process]. We had a couple of short lame-duck sessions at the end of last year, and then [tried] to get a handle on how the new Congress would engage on completing the '07 cycle. We want to make sure that they are aware of all the challenges and latest information we've got in making those final funding decisions.

[Also, there is] a significant challenge that is being created by the way the leadership is planning to bring the [continuing resolution] to the floor. Normally, you have a markup: People see what's in there, members of the committee can offer amendments, there is a report that explains what the committee meant when it was doing all of these things, you have a little bit of lag time. And from what I can tell, in the House at least, they are planning on a very different approach. [The House released a continuing resolution on January 29 and passed it intact two days later.]

They certainly have been doing a lot of consulting, and they have been open to hearing our input. But there is a lot of money here and a lot of accounts being dealt with, and I just hope that somewhere along the way there is an opportunity to look where there might be some shortcomings or they might have made an unintentional error, so they can find a way to correct it.

NJ: The administration last week announced the 2008 budget request for oceans issues, and it described the funding as an increase over the '07 budget request. But the '07 budget request is inoperable.

McMillin: It may prove to be an inadequate or inappropriate comparison in a couple of weeks when we know what the final funding levels are. The other thing we've tried to do is -- for a rollout like that, where you are talking about a very specific program -- up until the moment that a bill is presented to the president that allocates otherwise, we are going to be advocating our '07 request right up to the very end.

But we know that Congress always makes adjustments to the account level in our request, and by the time the appropriators are marking up and drafting their ['08] bills and coming up with their comparison tables, then they'll have an '07 enacted bill that they can compare to, and that will clarify things a little bit.

NJ: Given the political circumstance and the delays in the budget cycle, what meaning can we find in an '08 budget issued by a Republican president in the first of his lame-duck years with a Democratic Congress? It just seems that this budget document may be hollow.

McMillin: I think if you look at some of the specifics, it starts to cut away at that assumption. There will certainly be a lot of rhetoric to that effect in the aggregate. But let me just give you three examples out of the '07 budget, things that the president made a big deal about: funding for global AIDS; the American Competitiveness Initiative; and the advanced energy initiative last year.

Those are three things that he made a big push on a year ago, and it would be very easy for someone to assume that in a new, hostile Congress, he's going to have a hard time. Well, those were very bipartisan initiatives. I don't have inside information at this point, but from the conversations we've had, even with the Democrats writing the bill, we're expecting that they will be receptive to something along the lines of the president's request. [Democrats did add funding in these areas in their continuing resolution, but only the AIDS initiative received all of the money the White House was seeking.]

NJ: And what about once you get beyond the State of the Union-level agenda items -- what about the rest of the document?

McMillin: In the discretionary world there will be a variety of things we succeed on, a variety of things we fail on. But that's not all that different than under Republican Congresses. I think we'll see when we get to their budget resolution and their subcommittee allocations just how much they want to demonstrate different priorities than us.

I worked on the Hill when Republicans were in charge and President Clinton was in office, and there would be certain proposals that administrations tend to make regardless of party and that Congress, regardless of partisan control, tends not to be in favor of. And some things took on a more partisan tone, but those things were on the margins.

Basically, if the Clinton administration came in with a request for the FBI, that would be taken seriously and vetted seriously and given due deference. I think it will be the same for security- and law enforcement-related things -- have we proposed the right level of resources for them to deliver on their mission? For the vast majority of appropriated accounts, it is that type of a nonpartisan discussion that you get in appropriations, rather than a big showdown.

NJ: In March or April do you start again and say, "OK, here's where we were, here's where we really ended up. Let's rejigger all of our numbers and reoffer the request"?

McMillin: I would say that, by and large, there won't have to be a lot of major adjustments. There might be a case where something is sufficiently off that we need to make a formal adjustment. But for the most part, if you were going to hire 50 more people in this organization in '07 and you only got authority to hire 20, you can move some dollars around there and sort of handle that informally. I don't think it will be that big a deal, frankly.

NJ: Is there a major difference in the president's ability to drive the agenda for the '08 budget because he's a lame duck? Have you been diminished in your ability to set this agenda because agencies can go to a sympathetic Congress and seek support?

McMillin: I've seen no signs that our agencies are in every-man-for-themselves mode. In terms of working together to create a budget that reflects the president's priorities, the team is still very unified. In terms of working with the Democrats in Congress, a Democratic Congress will certainly have different funding priorities than a Republican Congress. It may be that when there are disputes, the mechanism for working things out might be different.

It was more common in the first years of the administration that if something wasn't going our way, that bill would stay in conference until it got worked out. That may not happen now. It may be that there are more-obvious confrontations as we work out our spending differences -- [but] I'm not predicting any specific confrontation.

There are some proposals we made that didn't fare so well in the Republican Congress, and some proposals -- like the funding we'll be seeking for No Child Left Behind -- where we not only get what we want, but we have people suggesting they want to go even further than we want.