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Congress Approves FY2002 Budget

After a week-long delay, Congress approved the conference report for the FY2002 budget resolution (H. Con. Res. 83). The budget passed both chambers, with the House voting, 221-207, on May 9, and the Senate voting, 53-47, on May 10.

Overall, the budget resolution provides for $661.3 billion in discretionary spending for FY2002, a 4 percent increase over FY2001 and the same amount requested by the President and approved by the House. The Senate had approved an 8.4 percent increase in spending over last year.

Additionally, the budget provides for a $1.35 trillion tax cut over 11 years. Of that amount, $100 billion is provided for a tax cut in FY2001 and FY2002. The President had requested a $1.6 trillion tax cut, and the House-passed budget resolution would have provided $1.64 trillion. The Senate-passed version would have provided $1.19 trillion.

Under the final budget, Medicare spending is increased by $313.7 billion over 10 years. Of that amount, $300 billion is reserved for a prescription drug benefit and $13.7 billion is for Medicare payments to home health agencies. The resolution also provides for a $2.8 billion increase in funding for the National Institutes of Health.

Education spending is set at $44.5 billion for FY2002, an 11.5 percent increase over last year and the same amount requested by the President and approved by the House. The Senate-passed version would have provided an additional $249 billion over 10 years for education spending.

FY2003 advance appropriations are limited to $23.16 billion and may be provided only for certain programs outlined in the budget resolution, including the Child Care and Development Block Grant, reading excellence, education for disadvantaged children, school improvement, Head Start, special education, and vocational and adult education.

The budget also establishes a number of reserve funds. One reserve fund will provide $300 billion over 10 years for a Medicare prescription drug benefit. Another reserve fund will provide $7.867 billion over 10 years for expanded Medicaid coverage for disabled children. Another reserve fund will provide $28 billion in FY2002 through FY2004 for legislation to provide health insurance for the uninsured. The fourth reserve fund will provide $5.6 billion to the Appropriations Committees for emergencies. A House-passed provision that would have established a reserve fund to allow additional spending for the Individuals with Disabilities Education Act (IDEA) was not included in the final budget resolution.

The final measure also includes a number of nonbinding resolutions. One resolution expresses the sense of the Senate that the budget include a $200 million increase in FY2002 and a $500 million increase in FY2003 to help “the neediest countries cope with the burgeoning costs of prevention, care and treatment of those affected by HIV/AIDS and associated infectious diseases.”

Another sense of the Senate expresses support for a 100 percent increase over five years for consolidated health centers. A third sense of the Senate expresses support for making education a priority and devoting additional funds to Head Start, IDEA, education for the disadvantaged, impact aid, state assessment tests, Pell Grants, reading improvement programs, school construction, and teacher and classroom quality programs.

Finally, the budget agreement includes a sense of the Congress that there should be a significant expansion of Individual Development Accounts in order to allow low-income and working families to better save. Another sense of the Congress states that appropriate funding has been provided for graduate medical education at children’s teaching hospitals and that health spending “should also reflect the importance of the Ryan White CARE Act to persons afflicted with HIV/AIDS.” Both resolutions were included in the House-passed version.

House and Senate debate highlighted key party differences on spending and tax cuts. Republicans touted the final agreement as a victory for the President and Americans, while Democrats charged that the spending blueprint fell short on several priorities, including education.

“In its current form, the conference report is, at best, misguided, and, at worst, a sham,” argued Rep. Louise Slaughter (D-NY). “The Republicans are not presenting us with a budget; they are conducting an elaborate shell game, a shell game where working families lose on every score,” added Rep. David Bonior (D-MI).

Rep. John Sununu (R-NH) responded, “This reflects a compromise… but it also reflects a budget that we should all be proud of that sets the right priorities for the country and continues the process of retiring debt and keeping our economy strong.”

Sen. Kay Bailey Hutchison (R-TX) agreed, saying, “The people of this country are hard working. They are productive. They should be able to keep as much of their money as we do not need for Government, to spend as they wish on their families.” She added that it was a “wonderful budget” that would spend money in “high-priority areas.”

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