This week was the first for the 112th Congress as new members of the House and Senate were sworn in.

Republican Rep. John Boehner of Ohio was of course elected the new Speaker of the House and former Speaker Nancy Pelosi was elected as minority leader (19 Dems voted “present” or for someone else). Republicans chose to spend yesterday having members read parts of the Constitution (leaving out sections that have been amended such as the three-fifths compromise and prohibition), even as two of their members voted without being properly sworn in which may mean a reset. They also replaced PAYGO with a new ‘Cut as You Go” rule that requires new spending to be balanced out with only other spending cuts and not tax increases. Today, the new Republican majority will approve a procedural vote to repeal the health care reform law. In doing so, they are violating promises they made to have open rules (no amendments were able to be offered on the repeal bill) and in exempting this bill from their new CUTGO policy (the CBO estimates repealing the Affordable Health Care for America Act will add $230 billion to the deficit and they are also backing away from a pledge to cut $100 billion from the budget in their first year. Can’t wait for the debt limit debate!). A vote will happen next week and will likely succeed, but repeal is going nowhere in the Senate. This is a symbolic vote for the base, though Republicans will try to attack it through funding and committee hearings.

On the Senate side, a more interesting debate on reforming the filibuster is taking place. Senate Democrats are united behind reform and since this is still the beginning of the session (specifically the first day, but Senate Majority Leader Harry Reid is extended this “day” by not adjourning), a reform package will only take a simple majority to pass. A vote is expected in the next few weeks as support builds around specific reforms. Sens. Tom Udall, Jeff Merkeley, and Amy Klobuchar are pushing reforms that include prohibiting a filibuster on opening debate, ending “secret holds” entirely, and making Senators who wish to filibuster actually be present in the chamber to do so. While this would not end the 60 vote hurdle in the end, it would make the process quicker and more transparent as Senators would have to enact more of a “real filibuster.’ Sen. Al Franken is also proposing to put the onus on the minority to come up with 41 votes instead of the majority to get 60. This seems like a small technicality, but for instance, the initial blockage of the DADT repeal would not have succeeded under this “reverse cloture” rule, as only 38 Senators voted not to proceed.

Reid has also said the Senate will tackle tax reform this year.

Rep. Steny Hoyer, the 2nd highest ranking Democrat in the House of Representatives, is giving some straight talk (that will likely garner him much criticism in an election year from both parties) on the need to raise taxes – and not just on the rich - to lower the deficit:

Tax cuts that benefit the middle class should not be “totally sacrosanct” as policymakers try to plug the nation’s yawning budget gap, House Majority Leader Steny Hoyer (D-Md.) said Monday, acknowledging that it would be difficult to reduce long-term deficits without breaking President Obama’s pledge to protect families earning less than $250,000 a year.

Hoyer, the second-ranking House Democrat, said in an interview that he expects Congress to extend middle-class tax cuts enacted during the Bush administration that are set to expire at the end of this year. But he said the extension should not be permanent. Hoyer said he plans to call for a “serious discussion” about the affordability of the tax breaks.

“We’re lying to ourselves and our children if we say we can maintain our current levels of entitlement spending, defense spending and taxation without bankrupting our country,” Hoyer says in remarks released in advance of a Tuesday speech sponsored by Third Way, a Democratic think tank.

Currently, those “fiscally conservative” Republicans want to extend all the Bush tax cuts (which primarily benefitted the wealthiest Americans) at a cost of $3 trillion over the next decade, whereas the Obama administration only wants to extend the cuts for those that make less than $250,000 a year. But that would still add at least $1.4 trillion to the deficit by 2020. Now it’s primarily the passage of those tax cuts and the Republicans’ refusal to pay for the Medicare prescription drug program and the wars in Iraq and Afghanistan when they were in charge that have lead us to the deficit crisis we now face. Unfortunately, it’s politically difficult to reverse them for the middle class, especially when people are still tightening their belts in a troubled economy. But at some point we all have to be willing to pay for the things we need in this country.

There’s simply no way to balance the budget through spending cuts alone, no matter what Republicans say (and their own recent proposed cuts amount to less than %1 of the budget). Lest Republicans think that Democrats are completely unwilling to reduce spending though, Hoyer also targets defense spending (which the GOP is generally unwilling to touch despite the fact that, next to entitlements, it’s the biggest federal expense):

Hoyer also indicated he plans to support an effort by Defense Secretary Robert M. Gates to eliminate wasteful spending at the Pentagon. “Any conversation about the deficit that leaves out defense spending is seriously flawed before it begins,” he says in the speech.

Hoyer also says House leaders are preparing a one-year budget resolution that would cut 2011 spending deeper than Senate Democrats have proposed and would reaffirm that the House will vote on any deficit-reduction plan that wins approval from the bipartisan commission appointed by President Obama. Sounds like a start, but this worries me:

The overarching point in Hoyer’s remarks is the need for a bipartisan plan that includes spending cuts and tax increases, in the tradition of deficit-reduction deals cut under former presidents George H.W. Bush and Bill Clinton. Drafting such a plan would require a reexamination of tax cuts enacted in 2001 and 2003, Hoyer says — cuts that benefited most taxpayers.

Given how successful recent “bipartisan” efforts have been, how likely is it that Republicans will go along with this, particularly if they win control of the House? If Hoyer is serious about this, he needs to make sure Democrats take the oppurtunity to limit the extension of those tax cuts now. No matter what the political risk, the risk to our country’s fiscal future in not taking action is much greater.

The House of Representative by a vote of 152-4 approved and sent to the Senate a bill that would ban junk food in schools and require new and healthy nutritional standards to be developed for food sold in all school cafeterias and vending machines.

The Senate rejected a proposed comission to tackle the deficit, largely because it would have required Congress to either completely accept or reject its recommendations without the ability to make changes. President Obama has issued an executive order to create something similiar, however. The Senate did accept pay-as-you-go limits on federal spending and to raise the debt ceiling without a single Republican vote on either. The Senate also confirmed (with a bipartisan mix of votes) Ben Bernanke for a second term as chairman of the Federal Reserve.

As for health care reform? Who the hell knows.

Great article in the NY Times:

The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.

You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.

The first category — the business cycle — accounts for 37 percent of the $2 trillion swing. It’s a reflection of the fact that both the 2001 recession and the current one reduced tax revenue, required more spending on safety-net programs and changed economists’ assumptions about how much in taxes the government would collect in future years.

About 33 percent of the swing stems from new legislation signed by Mr. Bush. That legislation, like his tax cuts and the Medicare prescription drug benefit, not only continue to cost the government but have also increased interest payments on the national debt.

Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

So, no, our fiscal nightmare isn’t President Obama’s fault, and conservatives should stop lying and saying it is. They don’t give a damn about out of control deficit spending until it’s Democrats doing it. On the other hand, as the article also points out, the Obama administration doesn’t (yet) have a serious plan to fix this. However, it is clear they recognize the problem and are beginning to take some steps. The Obama administration recently announced its desire to see “pay as you go” legislation in Congress. House Majority Leader Steny Hoyer has said he’ll introduce a bill soon as early as next week. It’s not enough, but it’s a start.

Of course, those “fiscal conservative” Republicans oppose it.

UPDATE: Good follow-up article from The New Republic.

After he banned gimmicks used by the Bush administration to make the federal deficit look smaller than it actually was, President Obama plans to outline steps in his budget proposal this coming week to halve that deficit it in four years, primarily through tax increases on the rich and corporations (whereas 95% of Americans are about to get their taxes cut) and cutting spending on the wars in Iraq and Afghanistan:

Even before Congress approved the stimulus package earlier this month, this year’s deficit was projected by Congressional budget analysts to approach $1.2 trillion, or 8.3 percent of the overall economy, the highest since World War II. With the stimulus and other expenses, some analysts say the annual gap between federal spending and income could approach $2 trillion when the fiscal year ends in September.

Obama proposes to dramatically reduce those numbers by the end of his first term, cutting the deficit he inherited in half, said administration officials, speaking on condition of anonymity because the budget has yet to be released. His budget plan would keep the deficit hovering near $1 trillion in 2010 and 2011, but shows it dropping to $533 billion in 2013 — still high in dollar terms, but a more manageable 3 percent of the overall economy.

To get there, Obama proposes to cut spending and raise taxes. The savings would come primarily from “winding down the war” in Iraq, a senior administration official said. The budget assumes that the nation will continue to spend money on “overseas military contingency operations” throughout Obama’s presidency, the official said, but that number is significantly lower than the nearly $190 billion the nation budgeted for Iraq and Afghanistan last year.

Obama also seeks to increase tax collections, primarily by making good on his promise to eliminate the temporary tax cuts enacted in 2001 and 2003 for wealthy taxpayers, whom Obama defined during the campaign as those earning more than $250,000 a year. Those tax breaks would be permitted to expire on schedule for the 2011 tax year, when the top tax rate would rise from 35 percent to more than 39 percent.

Obama also proposes to maintain the tax on estates worth more than $3.5 million, instead of letting it expire next year. And he proposes “a fairly aggressive effort on tax enforcement” that would target tax havens and corporate loopholes, among other provisions, the official said.

Overall, tax collections under the plan would rise from about 16 percent of the economy this year to 19 percent in 2013, while federal spending would drop from about 26 percent of the economy, another post-war high, to 22 percent.

That’ll deliver on three campaign promises right there… but wait, let’s not forget about health care:

The budget also puts in place the building blocks of what administration officials say will be a broad restructuring of the U.S. health system, an effort aimed at covering some of the 46 million Americans who lack insurance while controlling costs and improving quality. Many lawmakers said they had expected a health care overhaul to be pushed off while Obama deals with the economic crisis, but administration officials stressed they intend to forge ahead with comprehensive reform…

Administration officials and outside experts say the most likely path to revamping the health system is to begin with Medicare, the federal program for retirees and people with disabilities, and Medicaid, which serves the poor. Together, the two programs cover about 100 million people at a cost of $561 billion in 2007. Making policy changes in those programs — such as rewarding physicians who computerize their medical records or paying doctors for results rather than procedures–could improve care while generating long-term savings, expert say. It also could prod private insurers to follow suit.

Obama’s budget request would create “running room for health reform,” the official said, by reducing spending on some health programs so the administration would have money to devote to initiatives to expand coverage. The biggest target is bonus payments to insurance companies that run managed-care programs under Medicare, known as Medicare Advantage.

The Bush-era program has attracted nearly a quarter of Medicare beneficiaries to private health insurance plans that generally cover a package of services such as doctor visits, prescription drugs and eyeglasses. But the government pays the plans between 13 and 17 percent more than it pays for traditional fee-for-service coverage, according to the Medicare Payment Advisory Commission, which advises Congress on Medicare financing issues. Democrats have long complained about the cost, and eliminating the extra payments would save about $35 billion over the next five years.

Administration officials also are debating whether to permit people as young as 55 to purchase coverage through Medicare. That age group is particularly vulnerable in today’s weakened economy, as many have lost jobs or seen insurance premiums rise rapidly. The cost would depend on whether recipients were offered a discount or required to pay the full price of coverage.

As with the stimulus package, this show this is no small-thinking administration.