I’m at an event on economic stimulus and financial regulation sponsored by the Committee for a Responsible Federal Budget. The group is projecting a staggering $1 trillion deficit for fiscal year 2009, driven largely by the cost of reviving the slumping economy: bailouts for financial firms, diminished tax returns and an economic stimulus package.
The irony is that, while government spending as a whole is skyrocketing, individual agency budgets may not see that much of an increase.
That’s because much of the new spending is either handed out directly in a stimulus package â€” to states, businesses and taxpayers â€” or controlled by an individual agency, like the small cadre of Treasury employees who handle the Troubled Asset Relief Program.
This is setting up a potentially huge battle come January 20: Can the president-elect find a way to increase agency budgets to pay for big new initiatives, like universal health care, “green energy” investments and stronger environmental protections? Or will the mounting deficit keep agency budgets tight?