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Each of these items is meaty enough to be served as an entrée. But why pick just one when you can graze from all of the fiscal finger food that's available?

What's Good For The Goose...

When it comes to the federal budget process, you have to be impressed with the Bush administration's ability to see only what it wants to see.

The White House has been actively criticizing Democrats for months about the Senate not passing a fiscal 2003 budget resolution, but it has said virtually nothing about the House not moving ahead with the 2003 appropriations. It certainly hasn't blamed the Republican leadership for the lack of action - even though the House has traditionally insisted that it has to act first on all spending bills, so the blame for the limited progress lies squarely there.

With less than a week to go before the start of the fiscal year, the full House has basically stopped working on appropriations - even though it is clear that a number of bills are ready to be debated.

...Can Lead To A Lame Duck

The continuing resolution remains unresolved. The House and Senate still have no plan for how they will deal with their lack of action on appropriations.

As "Budget Battles" goes to print, it appears that Congress will consider a continuing resolution to keep all federal departments and agencies whose appropriation has not been enacted (in other words, all of them) operating until Oct. 4 or 11. But because few of the appropriations are expected to be completed during this period, another CR will be needed at that point. There is absolutely no agreement on how long that one will last.

There is a great deal of talk about Congress passing a CR that will keep the government funded until March. However, the House and Senate Appropriations committees, whose members always prefer individual appropriations to omnibus bills, are adamantly against this.

The ability to get a long-term CR also will depend on the overall spending levels in the bill. The White House continues to insist that the $759 billion in the president's budget is its absolute line in the sand, but representatives and senators from both parties are readily stepping over it. That will make the agreement difficult to come by.

As a result, several shorter continuing resolutions and a heaping serving of lame duck may be on the menu this fall after all.

No One Knows The Cost Of A War With Iraq

All of the talk over the past few weeks about the impact on the budget of a war with Iraq should be ignored. No one has a clue how the fiscal 2003 budget will be affected.

We do know most of the moving pieces; we just don't know the direction in which they will be moving. The budget impact cannot be determined until we know what type of military action will be taken, the number of troops involved, whether the effort will take one or more years, how quickly the depleted supplies will be replaced, and whether a continued U.S. military presence will be needed after the hostilities are over. We also need to know when in the fiscal year the actions will begin to determine how much the 2003 bottom line will change.

In addition, we need to know whether other federal programs will be reduced or taxes will be raised (neither of which is being discussed right now) to offset the higher military spending. The impact on the price of oil will be important, both because the military will be using a great deal of it and because a spike will have a negative effect on the U.S. economy. And finally, there's the effect of the hostilities on the stock market, which has had an increasing impact on federal finances in recent years. The reaction there is equally difficult to predict.

When Everything Old Is New Again

The Treasury reported last Friday that through the first 11 months of the fiscal year, the 2002 deficit was slightly more than $200 billion. Since the government traditionally runs a surplus in September, and since Sept. 1 falling on a Sunday pushed some September spending into August, the deficit ultimately will probably fall below this exalted level. The Office of Management and Budget is estimating that the deficit will be $165 billion; the Congressional Budget Office is saying $157 billion. Neither figure is quite as eye-catching as $200 billion, but either would make the 2002 deficit the highest since 1995.

As is typical at this time of year, most of the focus is no longer on the 2002 results but rather on what is likely to happen on 2003. The betting there is that, contrary to the official estimates, the deficit will approach or exceed $200 billion. The federal deficit has exceeded $200 billion only eight times, most recently in fiscal 1994.

Question Of The Week

Last Week's Question. Last week there seemed to be a slim chance that one of the fiscal 2003 appropriations could have been signed into law. That would have meant that a winner to last week's question, which asked you to name the first appropriation that would be enacted, could have been selected. Unfortunately, as noted above, none of the 2003 appropriations has yet made it to the president's desk - so no winner of the now famous (or is it infamous?) "I Won A 2002 Budget Battle" coffee/tea/hot chocolate mug can be announced... yet. Stay tuned.

This Week's Question. Unless there is a shutdown, at some point this week Congress will pass a continuing resolution to keep the government operating. The question: On what day and time will this bill be adopted? The winner of the fabulous "I Won A 2002 Budget Battle" mug will be the person who comes closest to the day and time the second chamber passes the bill in its final form. Because of the legislative schedule, your response must be received a day earlier than usual - by FRIDAY, SEPT. 27, 2002. Send your response to scollender@nationaljournal.com.

You must include your mailing address with your entry so the mug can be mailed if you win. If there are duplicate correct answers, the winner will be selected at random from those responses.

Darth Deficit?

Last January, National Journal, Government Executive and Fleishman-Hillard joined together to present "Three-Ring Budget," a half-day executive briefing on the 2003 budget debate presented by "Budget Battles" writer Stan Collender that used the sights and sounds of the circus to illustrate what was going to happen and why. Next January's briefing, "Houston, We Have A Budget," will use what Star Trek used to call "the final frontier" to bring the fiscal 2004 budget debate to life. The only real question will be whether there is a federal budget equivalent of "the force."

There will be substantial discounts for early registration, group discounts will be available, and a special venue in Washington is being negotiated. The details are almost ready to be revealed, but please contact Beverly Campbell (campbelb@fleishman.com or 202-828-9712) with any questions in the meantime.

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