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April 5, 2011
House FY 2012
Budget Unveiled This Morning
While Congress continues to seek an agreement on a long-overdue
Fiscal Year 2011 (FY11) Budget, House Budget Chairman Paul Ryan
(R-WI) is attempting to shift the debate to the country's long-term
fiscal outlook.
The budget rhetoric has heated up in recent weeks as negotiations
between House Republican and Senate Democrat leaders attempt to avoid
a government shutdown while meeting the both demands of their
constituencies and their parties.
The shift of focus from FY11 to FY12 and beyond may help ease the
tension as congressional leaders continue to work on a tentative deal
with the White House that would result in $33 billion in cuts from
Fiscal Year 2010 being enacted over the remainder of FY11, which
expires on September 30. However, a deal remains elusive.
House Speaker John Boehner (R-OH) emerged from a meeting with the
White House an hour ago indicating that an agreement has not yet been
reached. There are currently two sticking points. The
first appears to be Democrats desire to include changes in mandatory
programs to arrive at the $33 billion target while Republicans are
demanding $33 billion in discretionary spending cuts. Democrats
are reportedly seeking $10 billion in mandatory cuts.
The second sticking point is a number policy-related provisions that
could prevent an agreement, particularly one that would restrict the
Environmental Protection Agency's ability to regulate greenhouse gas
emissions.
Yesterday, the House Appropriations Committee passed a one-week
FY11 continuing resolution to avoid a government shutdown in case an
agreement cannot be reached by Friday's deadline. Many
Republican Members' have recently come out in opposition of
additional continuing resolutions, resulting in appropriators
adopting a more aggressive $12 billion spending cut strategy for the
one-week measure.
Of the $6 trillion in proposed spending cuts
by Mr. Ryan, one of the key savings is a $1 trillion restructuring of
Medicaid, the federally-supported, state-run program that provides
medical benefits for low-income individuals and families.
Regardless of Mr. Ryan's intent, the provision is sure to spur
political attacks from Democrats and will be a central issue in next
year's election.
If you have any questions concerning these issues,
please contact Chris Wagner at 202.772.0924 or cwagner@clarkhill.com.
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