(April, 2009). On April 2, 2009, the House and Senate, on strong party line votes, adopted FY 2010 Budget resolutions. Though the bills differ modestly in spending authority, they both offer President Obama an endorsement of much of his spending and policy plan for the year.

In the compromise measure that will be worked out over the next two weeks, Congress is expected to trim Obama’s discretionary spending increase by roughly eight percent. The focus of this increased spending will be education, healthcare and energy.

Both versions of the resolution contain a “deficit neutral reserve fund” – really just a statement – suggesting that Congress make improvements to the financial aid programs. These reserve funds do not require any further action. The House version of the resolution has a “reconciliation instruction” that tells the House Education and Labor Committee to develop and approve legislation saving $1 billion in the programs under its jurisdiction over the next five years. The Senate version of the resolution does not have this provision.

Reconciliation is the complicated, yet unresolved aspect of the budget debate. Though the Senate did not include reconciliation instructions in its resolution and specifically prohibited this process—a legislative maneuver employed to overcome the 60 votes required to prevent filibusters—for energy reform, it remains a possibility in the student loan and healthcare debate.

If the final resolution has a reconciliation instruction, it is likely to be used as a way to eliminate or modify the FFEL Program. Perkins changes may be part of the same legislation, but it is in no way a certainty.

There is nothing in these resolutions that dictates what will happen to the Perkins Loan Program. In fact, Perkins is mentioned in nether resolution, which is simply an outline of Congress’s broad plans for funding federal programs in Fiscal Year 2010, which begins October 1, 2009. A positive for Perkins funding is that the budget plans call for more discretionary spending, which may include Perkins funding if appropriators later decide to do that.

Congress heads into a two-week recess for the holiday, but staff will be meeting for informal negotiations during that time. Upon Congress’ return, conferees are expected to meet to work out the particularly thorny differences between the two resolutions.

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