FY 2010 Congressional Budget Resolution

Congress adopted on April 29 its conference agreement (PDF) on the $3.5 trillion budget resolution for fiscal year 2010 which outlines spending and tax priorities for the year. House and Senate action followed the release by President Obama of his budget proposal in late February. The budget resolution, which outlines spending and tax priorities for the year, is not binding on Congress. The process now moves to the relevant appropriating and tax committees in Congress to set funding levels for all of the federal departments and programs and enact substantive tax and other legislation specified in the budget.

Click here for a summary of the FY 2010 budget resolution.

Highlights of the FY 2010 Congressional Budget Resolution:

• The Big Picture: The $3.5 trillion budget resolution for fiscal year 2010 provides for $529.6 billion in non-defense discretionary spending, which includes funding for nearly every government agency and program not designated for defense or mandatory initiatives. The funding level in the resolution is $10 billion less than the President had requested, but is an increase of about $45 billion over the current year. The resolution projects a deficit of $1.7 trillion in 2009, which would then drop to $1.27 trillion in 2010, and ultimately to $523 billion in five years in 2014.
  
  
• Impact on Charitable Deduction: The resolution does not contain the president’s proposal to limit the value of charitable and other itemized deductions for upper-income taxpayers, but this does not preclude Congress from incorporating the President’s proposal or similar language to offset the costs of any legislative measure.
  
  
• Health Care Reform: The resolution creates a deficit neutral reserve fund for the purpose of health care reform, but leaves it to the relevant committees to determine how to pay for the reforms. The resolution also contains language that provides for the consideration of health care reform legislation under a special procedure, known as “reconciliation,” that would preclude use of a filibuster to block action.
  
  
• Estate Tax: The estate tax is currently set to expire in 2010 and then return to 2001 levels in 2011, unless Congress takes action this year. The budget resolution just adopted by Congress calls for extending the estate tax permanently at 2009 levels (an individual exemption of $3.5 million/$7 million per couple, and a tax rate of 45 percent). The issue is far from settled, however, since the Senate narrowly approved an amendment to its original version of the resolution by Senators Lincoln (D-AR) and Kyl (R-AZ) that would have weakened the estate tax significantly. The Lincoln/Kyl amendment, which was supported by ten Democratic Senators, would raise the individual exemption to $5 million ($10 million/couple) and lowering the tax rate to 35 percent. Independent Sector has and will continue to oppose any effort to weaken the estate tax below the 2009 estate tax levels. Learn more about the estate tax.
  
  
• Charitable Giving Incentives: The budget resolution calls for extending for two years a package of tax provisions, including the IRA rollover and other charitable giving incentives. Learn more about the IRA charitable rollover.
  
  
• Pay-As-You-Go Budget Rules: Although the budget resolution call for significant tax changes, including making the estate tax permanent and extending giving incentives, Congress may enact pay-as-you-go (paygo) rules that could shift the debate on these and other provisions. Under paygo, legislation must be revenue neutral, meaning that any tax cuts must be paid for with corresponding tax increases or reductions in spending.
  

Last Updated: May 5, 2009

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