| PublicationDate: 1/11/96 Summary: WELCOME BACK! Author: CSB - SFA Customer Support Branch January 11, 1996 WELCOME BACK! After the longest federal government shutdown in U.S. history (21 days) & the third worst blizzard this century, we return to work under a CR (continuing resolution) that runs until January 26. The current CR sets forth exactly the same conditions as the previous one (which ended December 15). In addition to providing funds for operating the Department until January 26, the CR allows spending on education programs to continue at the level of the House-passed appropriations bill *or* last year's appropriation (fiscal year 1995), whichever is lower. If this produces an amount less than 75 percent of the fiscal year 1995 level for a particular program, that program would instead be funded at 75 percent of last year's appropriation. Since the Department's annual appropriations bill for fiscal year 1996 (HR 2127) is still stalled in the Senate, it is not clear when -- or if -- that bill will be finalized. Funding for the Education Department could end up in an extended (perhaps for the rest of the year) Continuing Resolution negotiated at new levels. OVER THE PAST WEEKEND, the President responded to the Republicans' proposal to balance the budget with his own balanced-budget plan. His plan would continue to protect Medicare, Medicaid, education, & the environment. On Monday, Republicans presented their revised proposal in response to the President's. While the two sides have made progress in negotiations, they are still a considerable distance apart, not only on budget figures but in terms of policy approaches. Negotiations are expected to resume some time next week. Highlights of SAVINGS that would result from each proposal (to balance the budget in 7 years) are shown in the chart below. ---------------------------------------------------------------- SAVINGS (in billions) Clinton GOP (Jan.6 proposal) ^^^^^^^ Total 7-Year Savings: $602 billion (not available) Medicare: $102 billion $168 billion Medicaid: $ 52 billion $ 85 billion Student Loans: $ 0 (not available) Annually Approved General Gov't Spending, Including Defense: $295 billion $349 billion Welfare, Including Earned Income Tax Credit for the Working Poor: $38 billion $60 billion Closing Corporate Tax Breaks: $60 billion (not available) Farm Programs: $0 (not available) Savings from Lower Interest Payments as Federal Deficits Go Down: $57 billion (not available) Tax Cuts (cost to fed.gov't): $17 billion* $177 billion * The President's $87 billion tax cut would grow to $147 billion if the economy performs as well as the White House believes it will. ----------------------------------------------------------------- |