Federal government budget and appropriations mechanisms have reached a turning point. In simple terms, one can say that the "budget request" phase ended with the passing of the Joint budget resolution on June 5 for $3 trillion in spending, 1% over the President's February request. Now we enter the "appropriations" stage, where multiple appropriations sub-committees in the House and Senate debate and mark-up multiple bills in order to authorize spending. Normally, this happens through individual bills (keep track of them here), although Congress solved this issue in FY2008 with an Omnibus Spending bill.

The path forward may be challenging, however. First of all, the legislative calendar is shortened due to the election. Congress hopes to adjourn by September 26. Also, it has scheduled recesses for July 4 (June 30 - July 4) and the Summer District Work period (Aug. 11 - Sept. 5) leaving nine weeks in 2008 to get this done. Next, President Bush has threatened to veto appropriations measures that exceed his overall discretionary spending request of $991.6 billion. Again, according to the House Appropriations Committee 302(b) sub-committee allocations, the House is working with initial targets just 2% higher at $1,012.7 billion. Even so, Congressional Quarterly is reporting that Congressional Democrats may respond by debating and marking up appropriations bills before adjournment in September but pocketing them until January, when they hope increased Democratic majorities in Congress and a Democratic White House will push forward a new spending agenda, most likely through an Omnibus bill.

Both the House and the Senate have scheduled appropriations activity in the coming weeks, with House committees hoping to have bills ready for floor consideration by August. Homeland Security initially seems to be making the most rapid progress. Interestingly, Defense appropriations may uncharacteristically lag in this cycle. The $162 billion War Supplemental Spending Bill passed by the House on Thursday provides funding for the war that should last well into FY09 if not until Sept. 30, 2009, reducing some of the urgency to fund the military through normal appropriations activity. Thus, Congress may fund the Pentagon via continuing resolution, allowing the war to be debated during the election without cutting off funding to the troops.

The bottom line is that despite the recent flurry of legislation and activity, election season politics may prevent passage of FY09 appropriations by the end of the fiscal year.